1. Welcome Why are you here?

2. Why This Workshop? You are here because... You want to help yourself You want to help your family

3. Our Resource: Three Simple Rules: Guaranteed to Improve Your Finances By Theo A. Boers www.threerules.org

4. Three Simple Rules Why this resource? Its really is simple. It works! It offers help for a lifetime Its small enough that even people who dont like to read wont mind giving it a try. Its free

5. A Case Study Who are Steve and Jessica They are a fictitious couple for our illustrative purposes They are people in your congregation They are young folks you care about who may not be part of your congregation They are all of us

6. Steve & Jessica: The story. Get comfortable and try to focus on the story.

7. Steve and Jessica: Their Questions What did we do wrong that got us into this mess? What do we have to do to get out of this mess?

8. Do any mistakes come to mind? Too much college debt Financing the honeymoon Leasing new cars Buying used cars that were too expensive & Financing 100% Giving is not a priority Buying a home too early Looking at houses they couldn't afford

9. more easy mistakes Buying a house that was 30% over their budget Thirty-year mortgage Borrowing from parents Buying furniture on credit Using a credit card to buy clothes

10. The Rules Rule OneSpend Less than you earn. If you are spending more than you earn, do you have the DESIRE to stop? Do you have the WILLINGNESS to make a DECISION to stop Do you have the DISCIPLINE to stop?

11. Rule Two Save Now! Buy Later A Savings plan for Emergencies A Savings plan for Short-term needs A Savings plan for Long-term needs

12. Rule Three Know Debt Credit Card Debt Consumer Debt Student Debt Mortgage Debt Managing Debt Inventory your debt Pay off your credit card every month

13. 4 Rules of Credit Use Rule One: You only need one general credit card Rule Two: Dont use your credit card to buy things impulsively Rule Three: Pay off your credit card bill every month Rule Four: If you dont pay off a card at the end of the month cut it up…plastic surgery.

14. Summary Spend less than you earn Save now! Buy later. Know debt How can you do all of this? Create a Personal Cash Flow Plan

15. It is important to commit to a plan of discipline I/we am committed to spending less that I/we earn To accomplish this goal I/we will do the following: ________________________________ ________________________________ ________________________________ ________________________________ ________________________

16. Being committed means… Being Committed to saving I/we are committed to saving __% of my/our gross income To accomplish this goal I/we will do the following: ________________________________ ________________________________ ________________________________ ________________________________ ____________________________...

17. It is important to commit to a plan of discipline that will deal with the debt I/we are committed to managing debt To accomplish this goal I/we will do the following: ________________________________ ________________________________ ________________________________ ________________________________ ________________________________ __________________________

18. The Personal Cash Flow Plan First, The Financial Physical (as expressed on a monthly basis ) Why? Stop the Bleeding How? By knowing what is really going on By following the plan

19. Knowing what is really going on Income List all family income on a blank Personal Cash Flow Plan form Expenses Three Categories This splitting of expenses into three categories is important as we shall see in time.

20. Category One These expenses are outside your control Giving Taxes Debt retirement Saving All of these are also known as unspendable income

21. Category Two Regular living expenses that recur on a weekly or monthly basis

22. Category Three These expenses occur on a quarterly, semi-annual, annual or sporadic basis.

23. The Worksheets Sheet # 1 Personal Cash Flow Plan Sheet # 2 Personal Asset and Debt Inventory

24. Part Three: Diagnosis and Prescription Surplus/Deficit If, after filling out the worksheet (PCFP), you have a surplus… great! If after filling out this worksheet, you have a deficit you are violating Rule #1 You are spending more than you earn

25. How do you stop the bleeding? Earn more / Spend less Earn More Can you get a raise in pay? Can you get a job that pays better? Can you work more billable hours where you are? Can you get a part-time job? All questions relate to both persons if you are partnered.

26. Stop the Bleeding…continued Spend less Cut up your credit Cards Reduce telephone expenses Reduce food expenses Reduce eating out expenses Reduce vacation expenses Reduce gift expenses Reduce cable/internet expenses Reduce cash expenses

27. No one said this was easy! Does this sound like it might hurt? When you need to stop the bleeding it is not an optional enterprise. If you happened upon an accident victim bleeding in front of you what is likely to happen to that person if you dont stop the bleeding? What is going to happen to your financial life if you dont stop the bleeding?

28. Still in a deficit? Steve and Jessica needed to: Reduce more expenses Reduce clothes expenses Reduce entertainment expenses Reduce lunch expenses

29. Still in a deficit? What options have you? Sell assets What assets did Steve & Jessica have? By selling an asset owned free and clear a debt could be paid off and the monthly cash flow would improve By selling something on which they still had a loan, they could retire the loan and improve their monthly cash flow

30. Still in a deficit? Increase Income Steve and Jessica decided Steve could use his accounting degree to do taxes and earn more toward their annual household income The increase let them Save more Give more Accelerate their debt reduction

31. Part Four: Living by the Rules The Paycheck Management System Emergency Savings Account Category Three Expense Account General Checking Account The Spending Management System Food Clothing Entertainment Vacation Gifts Cash expenses

32. Following Rule Two Save Now, Buy Later Decide how much to save Discipline to save

33. Following Rule Three Know Debt 1. Know how much debt you have 2. Know the different types of debt Credit card Debt Consumer Debt Student Loan Debt Mortgage Debt

34. Knowing different types of debt Credit card Debt Credit card debt should be $0 Consumer Debt should be less than 10% of income Student Loan payments should consume less than 5% of your income Mortgage Debt should consume less than 25% of income If you are below these benchmarks you have achieved level one. Congrats!

35. 3. Know the consequences of debt Debt reduces your future standard of living Debt reduces your ability to save Debt reduces giving Debt causes personal frustration and stress Debt causes marital problems

36. 4. Know the borrowing test If considering a debt purchase, Ask: Am I justifying my buying decision on the basis that everyone is doing it? Is the item I am about to buy likely to depreciate? Is my loan for this item longer than absolutely necessary? Is there a possibility that I may not be able to make the payments on this loan?

37. Asking yourself the ?s Will repayment of this loan threaten my ability to save? Will repayment of this loan threaten my ability to give? Will repayment of this loan threaten my ability to take care of my family? Am I Questioning whether taking out this loan is a good decision? Does my spouse have any concern about borrowing money for this purchase.

38. 5. Know how to get out of debt If you… Have the desire to get out of debt Make the decision that you will do whatever is necessary and Have the discipline to stick with it You will know the delight of living debt free.

39. Part Five Living By Gods Rules We are all here because we believe God cares about how we live and how we can live. Rule One: Spend Less Than You Earn Dont fall in love with money. Be satisfied with what you have. The lord has promised that [God] will not leave us or desert us. Heb. 13:5 CEV

40. Part 5: Gods rules, contd Rule Two: Save Now, Buy Later The wise man saves for the future, but the foolish man spends whatever he gets. Proverbs 21:20 (LBV)

41. Part 5: Gods rules, contd Rule Three: Know Debt The poor are always ruled over by the rich, so dont borrow and put yourself under their power. Proverbs 22:7(MSG) The rich rules over the poor, and the borrower is the slave of the lender. (NRSV) Or, in todays vernacular –I owe, I owe, so off to work I go.

42. We need to work… A slack hand causes poverty, but the hand of the diligent makes rich. Proverbs 10:4 (NRSV) A farmer too lazy to plant in spring has nothing to harvest in the fall. Proverbs 20:4 (MSG)

43. We need to Give God wants us to be generous The world of the generous gets larger and larger; the world of the stingy gets smaller and smaller. Proverbs 11:24 (MSG) Honor the Lord with your substance and with the first fruits of all your produce; then your barns will be filled with plenty, and your vats will be bursting with wine. Proverbs 3:9-10 (NRSV)

44. We need to be true God wants us to be honest. God cares about honesty in the workplace; your business is his business. Proverbs 16:11 (MSG) It is better to be poor than dishonest. Proverbs 19:22b (TLB) Its stupid to try to get something for nothing, or run up huge bills you can never pay. Proverbs 17:18 (MSG)

45. Strive to be content God wants us to be content Dont weary yourself trying to get rich. Why waste your time? For riches can disappear as though they had the wings of a bird. Proverbs 23:4-5 (TLB)

46. Things to think about A leech has twin daughters named Gimme and Gimme more. Proverbs 30:15a CEV Its better to live humbly among the poor than to live it up among the rich and famous. Proverbs 16:19 MSG

47. Thank you for coming Dont forget the resource is free from www.threerules.org In it are many more handy forms to help you and yours analyze your situation and strategize how to move forward. This PowerPoint is free from www.westminsteruc.com