1. Module 1.1 Develop Your Spending Plan

2. Learning Objectives Define SMART Financial Goals
Identify current financial situation by completing a budget
Predict future requirements
Complete the following sections in their financial spending plan
Net Worth Statement - Indebtedness Summary
Income Statement - Action plan / Goals
Savings & Expenses - Daily Expense /Spend Plan
Develop a post-service, 12-month transition spending plan

4. Spending Plan Characteristics
Guide & servant
No need to account for each penny
Easy to understand
Reflects wants & needs
Based on current income/expenses
Practical & realistic
Flexible
Provides for necessities and fun

5. Why a Spending Plan is Important
Live within your income
Realize personal goals
Maintain good credit history
Get more for your money
Reduce financial stress
Enjoy financial freedom

6. The Financial Planning Worksheet
Net Worth Statement
Income Statements
Savings & Expenses
Indebtedness Summary
Action Plan / Goals
Daily Expense Tracker
12 Month Post Separation Budget

7. Elements of a Budget

8. The Financial Planning Worksheet
Assets:
What You Own
Liabilities:
What You Owe
Resources for estimating net worth:

9. Complete the Net Worth (tab 1)
on the worksheet

10. Total pay + allowances =
Income Definitions
Total pay + allowances =
Gross Income
Gross income – tax deductions – additional deductions such as allotments=
Net Income
You can think of “net income” as the amount of money you “take home” from each paycheck.

11. E-5 over 8 years w/dependents
Net Income
E-5 over 8 years w/dependents
Total compensation
Base Pay $2,994.55, BAS $367.92, BAH $1,509.00
(A)
$4,871.47
Total tax deductions
SGLI (self/family/spouse), TSGLI, AFRH, federal taxes,
FICA (social security/medicare)
(B)
$351.29
Total additional deductions
Monthly savings $200, monthly investing $163.83
(C)
$363.83
Net Income (A-B-C)
$4,156.35
2015 Pay Rates and SGLI of $250,000

12. E-7 over 20 years w/dependents
Net Income
E-7 over 20 years w/dependents
Total compensation
Base Pay $ , BAS $367.92, BAH $
(A) $
Total tax deductions
SGLI (self/family/spouse), TSGLI, AFRH, federal taxes,
FICA (social security/medicare)
(B)
$926.28
Total additional deductions
Monthly savings $200, monthly investing $225
(C)
$425
Net Income (A-B-C) $
2015 Pay Rates and SGLI of $400,000

13. Complete the Income (tab 2, 3 & 4)
on the worksheet

14. Savings Exercise List all of the money you save in the remarks section
List any monthly amounts contributed to
Savings funds
Investments (TSP, SDP, 401K)
Mutual funds, stocks, other
Total

15. Complete the Savings (tab 5)
on the worksheet

16. Savings

17. Living Expenses

18. Track Spending Track spending for 2-4 weeks Record all expenses daily
Group expenditures by category
Review past statements

19. Spending Log

20. Calculate the Living Expenses (tab 5)
on the worksheet

21. Debt Management Example
A Transitioning Service Member borrowed $15,000 at 16% interest for 5 years. He paid What if he had 6% interest for 5 years? What if he had 6% interest for 3 years?

22. Calculate the Indebtedness (tab 6)
on the worksheet

24. Debt-to-Income Ratio

25. The Action Plan

26. Write the Action Plan and Goals (tab 7)
on the worksheet

27. Improving a Spending Plan

28. Sources of Help

29. Review Net Worth Income Statements Expenses Debt Savings
Action Plan/Goals
Daily Expense Tracker
12 Month Post Service Budget

30. 12 Month Post Service Budget
MONTHLY EXPENSES
MEMBER AND SPOUSE'S NAME
TAKE HOME PAY
SAVINGS
ACTUAL
PROJECTED
REMARKS
GOAL: 10% OF NET INCOME
For comparison purposes only
EMERGENCY FUND (1-3 MONTHS)
RESERVE FUND
"GOAL-GETTER" FUND
INVESTMENTS/IRAS/TSP/ETC
PAY PERIOD SAVINGS AND INVESTMENTS (10%)
LIVING EXPENSES
HOUSING
MORTGAGE/RENT
MAINTENANCE/REPAIRS
FURNISHINGS
TAXES/FEES
UTILITIES
CABLE/SATELLITE TV/INTERNET
CELLULAR/PAGES/PHONE CARDS/TELEPHONE
ELECTRICITY
NATURAL GAS/PROPANE
WATER/GARBAGE/SEWAGE
OTHER
FOOD
DINING OUT
GROCERIES
LUNCHES
VENDING MACHINES
MEAL DEDUCTIONS
TRANSPORTATION
GASOLINE
MAINTENANCE/REPAIRS (INCL. SAVINGS FOR FUTURE)
OTHER TRANSPORTATION (TAXI/BUS FARE, PARKING)
OTHER (TAXES/REGISTRATION/LICENSING)
INSURANCE
AUTOMOBILE
HOMEOWNERS/RENTERS
HEALTH/LIFE/LTD/DENTAL
WARRANTIES/OTHERS
HEALTHCARE
DENTAL
EYE CARE
HOSPITAL/PHYSICIAN
PRESCRIPTIONS
SUBTOTAL (PAGE 1) OF MONTHLY LIVING EXPENSES
MONTHLY EXPENSES (PAGE 2)
CLOTHING
LAUNDRY/DRY CLEANING
PURCHASES ($50 MONTHLY PER PERSON)
CHILD CARE
ALLOWANCES
DAYCARE
CHILD SUPPORT
DIAPERS/WIPES, ETC
PET CARE
FOOD/SUPPLIES
VETERINARIAN/SERVICES (BOARDING/GROOMING)
PERSONAL
BEAUTY SHOP/NAILS/BARBER SHOP
CIGARETTES/OTHER TOBACCO/LIQUOR/BEER/WINE
HEALTH CLUB/ORGANIZATIONAL DUES
PERSONAL SPENDING FUNDS
OTHER (TOILETRIES, SUPPLEMENTS, ETC)
EDUCATION
BOOKS & SUPPLIES
FEES (OTHER/ROOM & BOARD)
TUITION/MGIB/POST 9/11
LEISURE/HOBBIES
ATHLETIC EVENTS/SPORTING GOODS
BOOKS/MAGAZINES
COMPUTER PRODUCTS (SOFTWARE/HARDWARE)
DVD/VIDEO GAME RENTALS
DOWNLOAD MOVIES/MUSIC
DVDs & CDs
ENTERTAINMENT
LESSONS
TOYS & GAMES
TRAVEL/LODGING
CONCERTS/CLUBS/THEATER/OTHER
CONTRIBUTIONS
CHARITIES (CFC/NMCRS)
SOME CHARITABLE CONTRIBUTIONS ARE ALLOTMENTS DON’T COUNT TWICE
RELIGIOUS
GIFTS
HOLIDAYS/BIRTHDAYS/ANNIVERSARIES
MISCELLANEOUS
DEPLOYMENT & TEMPORARY DUTY EXPENSES
ATM FEES/STAMPS/ETC
SUBTOTAL (PAGE 2) OF MONTHLY LIVING EXPENSES
GRAND TOTAL OF MONTHLY EXPENSES (70%)
Activity:
Create your own 12-month post service budget. Be sure to use the projected column.

31. Module 1.2 Analyze Your Credit Report and Scores

32. Learning Objectives Understand a credit report and its uses
Interpret a credit report
Obtain a credit report and score
Analyze the impact of your credit score
List ways to correct your credit report and increase your score

33. Analyzing Your Credit Report & Score
Lenders use your credit report to determine your interest rate, financial terms, and funding amount.
Companies use your credit report when determining hiring decisions.

34. Credit Reporting Agencies

35. Credit Report Components
Personal Identification
Name
Address
Date of Birth
Social Security Number
Employment Information
Payment History (Trade Lines)
Credit Accounts
Inquiries
List of everyone who accessed your credit report within the last two years
Public Record Information
Public records Wage attachments
Liens Bankruptcies
Judgment Foreclosures

36. Who Can See Your Credit Report

37. Fair Credit Report Act
Provides protection to the consumer by regulating the collection, dissemination and use of consumer information. It does this by:
Giving you the right to know what is in your credit report and given a chance to dispute
Not having incorrect or outdated information remain on your credit report.
Consent must be given for credit reports to be provided to most.
Ability to seek damages if there is a misuse of the credit report.

38. FACT Act Provisions
One free copy of your report from each CRA each year
Right to a copy of your credit score for a reasonable fee
One-call fraud alerts
Active-duty alerts
Trade-line blocking

40. Credit Reports www.annualcreditreport.com
Spend Responsibly, Protect Your Credit!
Free FICO score provided by FINRA Investor Education Foundation
(scroll through banner to free credit score and analysis tool)
FINANCIAL EDUCATOR CODE:
Valid Thru:

41. What to Expect You will need to provide and validate: Name Address SSN
Date of birth
Current & previous address (if moved in last 2 years)
Other information listed on your file

42. How Do I Influence My Score?
Credit Scores
What is a Credit Score?
Why Should I Care?
How Do I Influence My Score?
Three digit number generated by a mathematical algorithm based on information in your credit report
FICO – Most common
FICO Range :
Influences what credit products will be available to you and the cost of those products
Lower scores = overall higher cost; or even inability to obtain credit
65% based upon payment history and amount owed
Pay on time
Keep balances well below credit limit
Check your report and correct errors

43. Credit Score Components

44. Improving A Score

45. Correcting A Report

46. What’s Worth Knowing?
Your credit report and score can effect your financial future and impact many aspects of your life.
Watch out for credit monitoring companies that say it is free but they sign you up for a monitoring fee or some other fee.

47. Student Loan and Bankruptcy
Student Loan = Loan
Ways to manager and lower payments:
Loan consolidation, Income-based payments, graduated payments, public service loan forgiveness
For more information go to:

48. Where to get a score

49. Summary Credit Report Credit Score Fair Credit Reporting Act
Obtain a credit report
Interpret a credit report
Credit Score
Obtain your score
Understand the impact of your score
Fair Credit Reporting Act
Credit-based background checks
Correct Your Report
Increase Your Score