3. Zero Based Budgeting
Debt Snowball
Building Wealth
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4. Debt has been marketed to us in so many forms
and so aggressively since the 1960s that it is hard
to imagine living with out it.
It requires a PARADIGM SHIFT.
• Saving must be a PRIORITY
• You must pay yourself FIRST
• Saving money is about EMOTION and CONTENTMENT
• Money is AMORAL
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5. Personal Cash Flow (aka Budgeting)
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6. “You will either learn manage money
or the lack of it will always manage
you!” – Dave Ramsey
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7. • Money is Active
– That’s why we call it Currency
• You must do a WRITTEN cash flow
plan every month.
• You have to balance your bank
account
• Overdrafts is CRISIS LIVING
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Budgeting Basics
8. Why We Don’t Do Budgets
Why we hate the “Budget” Word
• It has “Bread” and “Water”
Connotation
• You never had a budget that
really worked
• Paralysis from FEAR of what they
will find
Why They Have Not Worked
• LEAVE things OUT
• You OVERCOMPLICATE your plan
• You don’t DO them
• Don’t actually LIVE on it
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9. Why We Should Do Cash Flow Plan
Build the Four Walls For Your Family
1. Food
2. Shelter
3. Basic Clothing
4. Utilities and Basic
Transportation
MANAGED MONEY WILL FEEL LIKE
GETTING A RAISE!
An Active Written Plan Will
• Remove money fights
– #1 Reason for divorces
• Will remove GUILT, SHAME, and
FEAR of buying necessities.
• Identify OVERSPENDING
• Will give YOU the POWER and
CONTROL over your money
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10. Zero Based Plan
“Zero –Based” does not mean your bank
account should hit Zero. Keep a pad or
buffer of around $100 in your account to
catch any little budget missteps.
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11. April 27, 2016 Darren Huff - Financial Peace University - Smart Money Week 12
v
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Being on Budget DOES NOT
mean you can’t have fun
and enjoy life.
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https://www.everydollar.com/
15. Dumping Debt
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Just as the rich rule the
poor, so the borrower is
servant to the lender.
17. • People spend 12-18% more when using credit cards instead of cash.
• McDonald’s reports its average ticket is $7 when people use credit cards versus
$4.50 for cash.
• More than 100 Million Americans carry a credit card balance
• Contrary to popular belief, you can rent a car and make online
purchases with cash…Debit Card
• Teens are the biggest target of credit card companies.
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Credit Cards
18. • New vehicles lose about 60% of it’s value in the first 4 years
• Most any thing with a motor will go down in value
• Leasing is the most expensive way to finance a vehicle
• The shop and finance office are the most profitable areas of a dealership
• Buy a reliable used car and pay cash
• Rule of thumb:
• The combined value of all your cars, motorcycles, boats and other vehicles
should NOT be more than half your annual income.
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Vehicles
19. • Home equity loans should never be used for emergencies.
• Don’t go into debt for emergencies
• Debt consolidation saves little to no money because you are typically
throughing low interest loans into the deal.
• Smaller payments typically mean longer time in debt
• Debt consolidation is a CON
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Lending
26. “Money is like manure: Left in one
pile it stinks—spread it around and it
will make things grow!”
– Dave Ramsey
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27. You Should be Debt Free
(excluding mortgage)
Have 3-6 Months of
Living Expenses Should
Be in place
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A Plan to Building Wealth-Before You Start
28. • Diversify – lower your risk
– Good growth mutual funds
• Invest 15% of your household income*
1. Start with Employer match and max
2. Roth IRA
3. Go Back to your employers plan
4. Other
*=Before doing any investing, check with a licensed financial planner.
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A Plan to Wealth
29. • Example of Diversification
– 25% Growth and Income Funds
– 25% Growth Funds
– 25% International Funds
– 25% Aggressive Growth Funds
• Always use tax favored qualified plans
*=Before doing any investing, check with a licensed financial planner.
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A Plan to Wealth
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Building Wealth
Building Wealth
Building Wealth
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“If you want something you’ve never
had, you must be willing to do
something you’ve never done!”
–Thomas Jefferson