Personal Finances A Self-Study To begin this self-study, complete the ‘Personal Money Savvy’ Survey. You will find this survey in the same place you located this Power Point presentation. Print out the form and complete it.
Question: What assumptions about personal finances does the survey make? List your answers below on this slide … Assumption #1 – Assumption #2 – Assumption #3 – Any other assumptions that you can think of? Go to next slide for the Savvy Survey assumptions
Savvy Survey Assumptions That having a spending plan and following it is essential. That credit cards – in and of themselves – are not bad. Using them to live beyond one’s means is. Paying bills off in full and on time saves a lot of money. Spending all that I earn every month on my living expenses is a mistake. Setting aside money for tithing, emergencies, purchases and planning for retirement is essential.
How do your assumptions (slide #4) about the survey compare with the survey’s assumptions (slide #5)? Which are the same? Which are different?
With the assumptions that are different, do you believe that your assumptions or the survey’s assumptions will result in better long term financial stability? Jot down your answer and your reasoning on this slide here.
Assumption #1 - Having a spending plan and following it is essential
If you have a spending plan and are following it … great!
If you don’t know what a spending plan is … here’s one definition:
A spending plan is a predetermined strategy – based on my regular take home pay – that identifies every expense and amount (like tithe = $200, morning coffee = $30, rent = $550, savings = $100, groceries = $300, etc) I have for the pay period.
There are many ways to develop a spending plan (Microsoft Money and others have great formats). Or, you can simply make one yourself using Excel or Word or the use the old fashioned way, with pen and paper. The important thing is that you make a plan and follow it.
Assumption #2 - Credit cards – in and of themselves – are not bad. Using them to live beyond one’s means is . If you answer ‘yes’ to one or more of the following questions, it’s time to sit down with a credit/debt professional with the goal of weaning you off the use of credit cards as a source of income:
If I stopped using my credit card(s) today, I would not be able to meet my monthly financial obligations.
If I stopped using my credit card(s) today, it would take more than six months to pay off the entire balance.
My regular credit card(s) debt equals more than 10% of my annual salary.
Assumption #3 - Paying bills off in full and on time saves a lot of money.
Given my regular take home pay, how much can I charge on my credit card(s), pay all of my bills and pay the credit card(s) off in full each month?
How do my current credit card(s) charges compare with the answer to #1 above?
Assumption #4 - Spending all that I earn every month on my living expenses is a mistake.
If you answer ‘yes’ to one or more of the following questions, it’s time to consult a financial planner.
At the end of every month my bills total more than my regular take home pay.
I don’t really have a good handle on where all my money goes.
I feel that I’m entitled to do what I want with my money without answering to anyone else.
Assumption #5 - Setting aside money for tithing, emergencies, purchases and planning for retirement is essential. If you answer ‘no’ to one or more of the following questions, it’s time to consult a financial planner. I tithe a regular percentage every month. I set aside a regular percentage of my income for savings. I am involved in a 401, Roth IRA or another type of retirement instrument. If I loose my job, I have savings sufficient to carry me through at least six months at my current level of expenses.
You are finished! No matter how you scored on the survey, it’s my hope that you either confirmed that you are proceeding in a healthy way or have discovered that the need to change your current approach, including seeking out professional financial assistance with the resources God has blessed you with. It’s also my hope that the other on-line financial resources have been helpful. Please send me an e-mail at [email_address] with suggestions for how to improve this self-study. Peace and Joy! Steve Henderson PS – Go to the next slide for a list of helpful resources.
Defusing the Time Bomb: A Christian Call to Get Out of Debt (Kindle Edition) by Pamela Magnuson Making Change: A Transformational Gide to Christian Mooney Management by S. Hemphill (Paperback - Jun 2006) Money Management for College Students by Larry Burkett and Todd Temple (Paperback - Jan 1, 1998 Family Money Management God’s Way by Mahlon L. Hetrick (Paperback - Jan 1, 2009) Master Your Money by Ronald Blue (Paperback - Oct 15, 1997) Your Money Counts by Jr., Howard L. Dayton (Paperback - Mar 3, 1997)