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John DoeCertified Consumer Credit Counselor
Steps to Financial FreedomPRESENTED BY GREENPATH
How do you set financial goals?How do you create a budget?How do you use credit wisely?
STEP 1:YOUR MONEY PERSONALITY
Turn to page 2 in your workbook.
STEP 1:YOUR MONEY PERSONALITY
Turn to page 2 in your workbook.
1. List products and services you spend your money on
2. List ways are you a “good” spender
3. List changes you would like to make in your spending habits?
Discover your money personality:
How do I set financial goals?
STEP 2: SETTING GOALS
Turn to page 3 in your workbook.
• Specific• Measureable• Reasonable and Realistic
STEP 2: SETTING GOALS
Turn to pages 3-4 in your workbook.
STEP 2: SETTING GOALS
Turn to page 4 in your workbook.
1. What are some goals you would like to accomplish within the next 1 to 2 years?
2. What are some goals you would like to accomplish in the next 2 to 5 years?
3. What are some goals you would like to accomplish in more than 5 years?
List out your short, mid and long-term goals:
How do I create a budget?
STEP 3: BUDGETING
Turn to page 5 in your workbook.
1. IncomeA. Gross vs Net
2. ExpensesA. FixedB.VariableC.Periodic
3. Debts
STEP 3: BUDGETING
Turn to page 5 in your workbook.
Once you have created your budget, be sure to compare it to the financial guidelines financial experts recommend. Most people tend to underestimate their
expenses by about 25%.
STEP 4: SAVING TO ACHIEVE
Turn to page 5-6 in your workbook.
• Make it part of the budget
• Start with an emergency savings account
• Save to make most purchases
STEP 4: SAVING TO ACHIEVE
Turn to page 6 in your workbook.
Calculate your emergency savings
What are some ways I
can use credit wisely?
STEP 5: USE CREDIT WISELY
Turn to page 6-9 in your workbook.
• Good debt, bad debt
• Review your credit report
• Handling debt problems
STEP 6: HOME SWEET HOME
Turn to page 10-12 in your workbook.
• The American Dream
• How much can I buy?
• Qualifying ratios
STEP 6: HOME SWEET HOME
Turn to page 10-12 in your workbook.
Calculate your qualifying ratios:
If you don’t own a home: 1) How much house can you
afford?2) How’s your debt to income ratio?
If you own a home 1) How do your ratios look if you were to buy a house today?
Housing debt-to-income ratio = 28% of gross income
Monthly debt-to-income ratio = 36% of gross income
STEP 7: INVEST FOR YOUR FUTURE
Turn to page 12-13 in your workbook.
• Stocks, bonds, and cash
• Replenish emergency savings
• CD’s and saving bonds
• IRA, 403(b), 401(k), mutual funds
• Tax vs. tax-advantaged
STEP 8: TAKE ADVANTAGEOF TAX ADVANTAGES
Turn to page 14 in your workbook.
• Tax-free vs. tax-deferred
• Securities
• Home equity loans
• Pre-tax dollars
• Charity
STEP 9: INSURANCE
Turn to page 14-15 in your workbook.
• Life• Health• Auto• Disability
• Homeowners• Renters• Long term care• Umbrella policy
STEP 9: INSURANCE
Turn to page 14-15 in your workbook.
Questions to ask yourself:
• Do you have enough coverage?• Do you have too much coverage?• Are there any gaps?• What do you own of measurable value that you
can’t easily or economically replace without insurance?
Review your insurance plans and coverage annually!
STEP 10: KEEP GOOD RECORDS
Turn to page 16-17 in your workbook.
• Home files- Keep it simple
• Write a financial plan
GOOD ADVICE
Turn to page 17 in your workbook.
• Learn as much as you can on your own
• Communicate with family members
• Be smart, seek guidance
• Use available resources
• Have some fun
