Releasing the chains of debt

Releasing the Chains of Debt
The Path to Financial Freedom
April 27, 2016
Darren Huff - Financial Peace University - Smart Money
Week
1

Darren Huff
darrenhuff@gmail.com
April 27, 2016
Week
2

Zero Based Budgeting
Debt Snowball
Building Wealth
April 27, 2016
Week
3

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
April 27, 2016
Week
4

Personal Cash Flow (aka Budgeting)
April 27, 2016
Week
6

“You will either learn manage money
or the lack of it will always manage
you!” – Dave Ramsey
April 27, 2016
Week
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
April 27, 2016
Week
8
Budgeting Basics

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
April 27, 2016
Week
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
April 27, 2016
Week
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.
April 27, 2016
Week
11

April 27, 2016 Darren Huff - Financial Peace University - Smart Money Week 12
v

April 27, 2016
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April 27, 2016
Week
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Being on Budget DOES NOT
mean you can’t have fun
and enjoy life.

April 27, 2016
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15
https://www.everydollar.com/

Dumping Debt
April 27, 2016
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April 27, 2016
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18
Just as the rich rule the
poor, so the borrower is
servant to the lender.

• 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.
April 27, 2016
Week
19
Credit Cards

• 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.
April 27, 2016
Week
20
Vehicles

• 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
April 27, 2016
Week
21
Lending

•Finally
•I Am
•CASH
•Only
April 27, 2016
Week
22
FICO = “I LOVE DEBT SCORE”

April 27, 2016
Week
23
Staggering Statistic Debt Data – Source: Nerdwallet

April 27, 2016
Week
24
Gazelle Like Intensity

Stop
borrowing
Save
Sell
something
and
everything
Find a part
time job
April 27, 2016
Week
25
Debt
OUT of
Steps

April 27, 2016
Week
26

Building Wealth
April 27, 2016
Week
27

“Money is like manure: Left in one
pile it stinks—spread it around and it
will make things grow!”
– Dave Ramsey
April 27, 2016
Week
28

You Should be Debt Free
(excluding mortgage)
Have 3-6 Months of
Living Expenses Should
Be in place
April 27, 2016
Week
29
A Plan to Building Wealth-Before You Start

• 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.
April 27, 2016
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A Plan to Wealth

• 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.
April 27, 2016
Week
31
A Plan to Wealth

April 27, 2016
Week
32
Building Wealth
Building Wealth
Building Wealth

April 27, 2016
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33

April 27, 2016
Week
34
“If you want something you’ve never
had, you must be willing to do
something you’ve never done!”
–Thomas Jefferson

April 27, 2016
Week
35

Darren Huff
darrenhuff@gmail.com
April 27, 2016
Week
36

Releasing the chains of debt

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