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TheUltimateGuidetoPersonalFinance
Money
TableofContentsSection1–BacktoBasics:WhatisMoney?……………………………………………… 5
Section2–ClearingOuttheClutter………….……………………………………………… 17
Section3–WhereDoesAllMyMoneyGo?……………………………………………… 27
Section4–DebtFreedomandCreditBasics…………………………………………… 39
Section5–InsuranceBasics…………………………………………………………………... 52
Section6–Automobiles…………………………………………………………………………… 65
Section7–HomesandMortgages…………………………………………………………… 78
Section8–RetirementandWorkplaceBenefits……………………………………… 90
Section9–SavingandInvesting……………………………………………………………… 103
Section10–TaxBasics…………………………………………………………………………… 117
AdditionalResources……………………………………………………………………………… 133
AboutTheMoneyProfessorsThe Money Professors share a passion for the success of students in theirpersonal, financial, and professional lives. In 2009 the three of us beganworking together at East Carolina University.We were acutely aware of thegrowing need for financial literacy both on and off the campus. After beingsought after by outside organizations, reporters, and individuals for theirexpertadvice,weformedTheMoneyProfessors.
The Money Professors provide end-to-end resources for professional andfinancialsuccess.TheMoneyProfessorsconsistofspeakingandconsultingforhighereducationalprofessionals,corporateevents,collegestudentsandadultlearners. We also offer a broad range of solutions for educators, collegestudents,andparents.
Len Rhodes is Director of Technology, Information and Operations in theCollegeofBusinessatEastCarolinaUniversityandaTeachingInstructorintheDepartment of Finance. He is passionate about helping students acquire thefinancial decision-making skills they need to achieve their personal andprofessionalgoals.
Bill Pratt is the Business and Management Program Director and AssistantProfessor of Business at Piedmont Virginia Community College. He left thefinancial industry to focus on helping students become personally andfinanciallysuccessful.
MarkC.WeitzelisthefounderanddirectoroftheFinancialWellnessInstituteatEastCarolinaUniversity’sCollegeofBusiness.ThroughoutMark’scareerhehasadvocatedforincreasingthefinancialcapabilityofhisclientsandstudents.
3
IntroductionOriginally,wesetout towritea guide tohelpordinarypeoplewitheveryday
finances.Weweren’tlookingtodiscoverthe“nextbigthing”onWallStreetor
predict the future of the gold market. We just wanted to help people, like
ourselves,whowanted to learnmore aboutmoney.We realized therewere
manypersonal financebooks available, but very fewactually give thedetails
that you need tomake the right financial decisions foryou.We decided the
bestapproachtounderstandingpersonalfinanceswasbycreatingthisultimate
guide. This bookwill equip youwith the typeof real-life financial knowledge
aboutcreditanddebtthatwasnottaughtinhighschoolorcollege.
Whatreallygotusstartedintheworldofpersonalfinancewasourdistastefor
debt.We began studyingways to eliminate andminimize debt from literally
hundredsof sources. Ifyouhavea lotofconsumerdebt, thenyoushouldbe
encouraged toknow that there really is light at theendof the tunnel.While
everyone’s circumstances are different, most people (and we mean the
overwhelmingmajorityofpeople)shouldbeabletobefreeofconsumerdebt
in five (5) to seven (7) years, and be completely out of debt (including a
mortgage) in as little as seven (7) to ten (10) years. Toomany of us just go
through life with lots of debt, thinking that is just the way it has to be.
Hopefully,thepeoplewecanreachwiththisworkbookwillstartanewtrend
towardslivingalifeoffinancialfreedomandindependencefromcredit.
Introduction
4
Wehave tried touseeasy tounderstandexamplesandworksheets. Someof
theworksheetsaremore involved thanothers, so takeyour timewith them.
Youare even allowed touse a calculator if youwant! Don’t try tomake any
senseofthe“Factors”fromtheAppendicesintheback.Theyareusedtohelp
youcalculatewhatisimportantwithouthavingtodoanycomplexmath.With
that, good luckwith yourpersonal finances. Thisbook shouldprovidea solid
foundationforyoutobeginyourjourneytowardsfinancialindependence!
Beforeyoubeginyourjourneythroughthisguide,askyourselfthe
followingquestion:WhatdoIhopetogetoutofthisguide?How
willIbebetteroffwhenIamdone?
17
Section2
ClearingOuttheClutter
GettingOrganized
One of the keys to effectively managing your money and your life is
organization. The more organized you are, the less chance of forgetting
something (such as a payment that is due). Another key to making your
financiallifeeasierisbyplanning.Ifyoudon’tknowwhereyouaregoing,you
can’tgetthere.Planningyourfinancesismuchlikeplanningatrip.Youhavea
startingpoint,adestination,perhapsafewstopsalongtheway,andamapto
follow.Ifyouknowwhereyouaregoingandhowtogetthere,allyouhaveto
doissitbackandfollowyourplan.
Thefirststepinplanningistoknowwhereyouarenow(yourstartingpoint).In
thechartbelow,listyourassets(thingsyouown)andyourliabilities(whatyou
owe).
Section2–ClearingOuttheClutter
18
Assets $$ Liabilities $$House Mortgage Car(s) Carloan(s) 401(k) StudentLoan(s) IRA,otherretirement OtherLoan(s) Jewelry/Collectibles CreditCard(s) Other Other TotalAssets TotalLiabilities
NetWorth (TotalAssetsminusTotalLiabilities)
If youare in your20’s andhaveanegativeNetWorth,don’t feelbad, that’s
normal.Ifyouareinyour30’s(orolder)andhaveanegativeNetWorth,then
startworkingtowardsincreasingyourNetWorthbypayingoffsomedebtand
increasingyoursavings.
Next,listallofyoursourcesofincome(ifyoureceiveirregularincome,suchas
fromaseasonaljob,takethetotalamountyounormallyreceiveinayearand
divideby12).
Person1 Person2 TotalPaycheck1 Paycheck2 Paycheck3* Other* Other*
TotalMonthlyIncome *(Mosthouseholdsonlyhave2paychecksfromeachperson.However,somepeoplehavemorethanonejob,
ormorethanonesourceofincome)
OnthenextpageisaBillPaymentCharttokeepfrommissinganypayments.
MoneyMadeSimple:TheUltimateGuidetoPersonalFinance
www.TheMoneyProfessors.com©2016 19
BillPaymentChart
Date
Name
$$
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
Total Monthly Payments
$
TheBillPaymentChart isdesignedasaguide tokeepyou from forgetting to
payanyofyourbills,andtohelpyouremembertopaythemontime!
Tousethechart,simplyfillinthedayofthemonththebillisdue(oryoumay
want to fill in theday that youmust send in thepayment, suchas seven (7)
days in advance). Then enter the name of the creditor/service provider. You
canalsowritetheamountofthepayment(forbills thatchangemonthly,use
the average payment amount). Each month, after you pay the bill, place a
checkmarkoran‘X’intheboxforthatmonth.
Section2–ClearingOuttheClutter
20
Ifyouwanttoincludeyoursavingsaccount,simplywriteSavingsintheName
column and either write a pre-set amount in the $$ column or write in the
actual dollar amount in the Month column. You should also add the total
amount of payments (from the $$ column) so you know howmuch of your
incomeisgoingtowardmonthlypayments.
Belowisasamplechart:
Date
Name
$$
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
1st Rent 800 √√ √√ 1st Savings 100 110 12th Credit Card 75 √√ √√ 15th Car Loan 250 √√
GoalSetting
Nowthatyouknowwhereyoustand(NetWorth,Income,MonthlyPayments),
you can start planning your future goals. For this exercise you will establish
short-term(oneyearorless)andlong-term(morethanoneyear)goals.Wewill
saveretirementforanotherchapter.
Divide the totalamountneeded foryourgoalby thenumberofmonthsuntil
youwishtoreachthegoal.Example:$2,100/7(months)=$300permonth.
TotaltheMonthlySavingsNeededcolumns.Addtheshort-termandlong-term
Monthly SavingsNeeded to get TotalMonthly. That is howmuch youwould
havetosaveeachmonthtobeontracktoreachallofyourgoals.Ofcourseyou
MoneyMadeSimple:TheUltimateGuidetoPersonalFinance
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don’t have to save for everything at once. Perhaps you could save for one
short-termgoalatatime.
If you still have debt, you may also want to wait until you are out of debt
before focusing on some of your long-term goals, or youmaywant to delay
some short-term goals. In chapter 4 you will learn how to get out of debt
quickly.
List your short-term goals (One year or less) Examples: Cost Months
Until Goal
Monthly Savings Needed Go on a cruise Save for taxes due
Purchase a new TV
(Example) Buy a large screen TV $ 2,100 7 $ 300
Total
List your long-term goals (More than one year) Examples: Cost Months
Until Goal
Monthly Savings Needed Start a business Purchase a new refrigerator
Purchase a new car Establish an emergency Fund
Total Total short-term goal Total long-term goal Total Monthly
Section2–ClearingOuttheClutter
22
TrackingYourGoals
Like most people, you probably keep your money in a savings account. The
problemisthatwekeeponesavingsaccount,whilesavingformultiple items.
Belowisachart(plusasamplechart)soyoucantrackyourindividualgoalsina
singlesavingsaccount.
Date Account Goal 1 Goal 2 Goal 3 Goal 4 Transaction
(Totals) Vacation –
$1,250 New computer -
$1,200 Emergency Fund -
$2,500 DVD player –
$300 Balance Balance Balance Balance Balance
3/8/02 +75 75 +25 25 0 +50 50 0 3/22/02 +125 200 +25 50 +25 25 +50 100 +25 25
4/5/02 +125 325 +25 75 +25 50 +50 150 +25 50 4/9/02 -100 225 called plumber -100 50
4/19/02 +125 350 +25 100 +25 75 +50 100 +25 75
Recordyourtransactionwithabriefdescription(ifyouwithdrawanymoney).
Remember,youdon’thavetosaveforeveryoneofyourgoalsatonce.
Date Account Goal 1 Goal 2 Goal 3 Goal 4 Transaction
Balance Balance Balance Balance Balance
MoneyMadeSimple:TheUltimateGuidetoPersonalFinance
www.TheMoneyProfessors.com©2016 23
OrganizeYourFiles
Nowthatyouknowhowtoreachyourgoals,youneedtokeepyourfinancial
andotherimportantpapersorganizedincaseyouneedthemforemergencies.
Keepingimportantdocumentsorganizedcanalsosaveyoulotsofmoney.For
instance,ifyoucanfindyourwarrantyinformationwhenyouneedit,youmay
beabletohaveanitemfixedforfreeinsteadofpayingtheservicefeeyourself.
Also,youcanresteasierknowingthatintheeventofanemergencyyoudon’t
havetospendtimesearching.
Iwouldrecommendhavingafileforthefollowingcategories
BankSavings(onefileforeachaccount) BankChecking(onefileforeachaccount) Auto:Maintenance(onefileforeachvehicle)
Auto:Loan(onefileforeachvehicle) Insurance:Home&Auto
Insurance:Life&Disability MedicalInsurance(policyandexpensereceipts)
RetirementAccount(onefileforeachaccount)
OtherInvestments(onefileforeachaccount)
PayStubs(onefileforeachjob/person)
Workrelated(onefileforeachjob/person)
Estate&Wills(mostcurrentcopy)
House:Purchases&Maintenance(Additions,improvements,repairs)
House: Mortgage (mortgage contract, monthly statements, annualsummaries)
Section2–ClearingOuttheClutter
24
Taxes (State, federal, local and property taxes if you itemize your taxdeductions)
Warranties(keepthereceiptwiththewarranty)
Utilities(electric,gas,sewer,water,trash) Phone(mainphone-line,additionallines,cellphones)
Credit Card(s) (major credit cards, department store cards, gas cards,etc.)
Loan(s)(onefileforeachaccount–studentloans,personalloans,etc.)
Pet(s)(onefileforeachpet–medicalinformation,etc.)
School/ChildCare(onefileforeachchild)
TrashingtheClutter
Youshouldkeepallofyourpapersforatleastoneyear. Taxinformationshouldbekeptforsevenyears.
Housingdocumentsshouldbekeptuntilyousellthehouse.
Carmaintenancerecordsandthestatementthatindicatesyouhavepaidofftheloanonyourcarshouldbekeptuntilyousellthecar.
KeepingContact
Onthe followingpage isaProfessionalContactList. It isagood idea tokeep
any necessary emergency information together, somewhere that any family
membercanfindit.Youmaywanttomakeacoupleofcopiesifyouhavemore
contactsandkeeptheirinformationsomewhereyouwillremember.
MoneyMadeSimple:TheUltimateGuidetoPersonalFinance
www.TheMoneyProfessors.com©2016 25
ProfessionalContactList
InsuranceAgent:(Typeofinsurance)
Name:__________________________Company:______________________________
Address:________________________________________________________________
Phone:_________________________________Fax:____________________________
InsuranceAgent:
Name:__________________________Company:______________________________
Address:________________________________________________________________
Phone:_________________________________Fax:____________________________
FamilyDoctor
Name:__________________________________________________________________
Address:________________________________________________________________
Phone:_________________________________Fax:____________________________
Pastor/Priest/Rabbi
Name:__________________________________________________________________
Address:________________________________________________________________
Phone:_________________________________Fax:____________________________
Lawyer
Name:__________________________________________________________________
Address:________________________________________________________________
Phone:_________________________________Fax:____________________________
Accountant/CPA
Name:__________________________Company:______________________________
Address:________________________________________________________________
Phone:_________________________________Fax:____________________________
Other
Name:__________________________________________________________________
Address:________________________________________________________________
Phone:_________________________________Fax:____________________________
Section2–ClearingOuttheClutter
26
Whataresomegoalsthatyouand/oryourfamilywanttoachieve?
Listagoalamount,anddate foreachofyourgoals soyouknow
howmuchandwhenyouwanttoreachthegoals.
1
MoneyMadeSimple:ACompleteFinancialWorkbookisdesignedtoequipyouwithreal-lifefinancialknowledgeacrossabroadspectrumofpersonalfinancetopics.Theworkbookuseseasytounderstandexamplesandworksheets.
MoneyMadeSimpleprovidesyouanoverviewofallofthemajortopicsregardingyourownpersonalfinanciallife.Aftercompletingthisworkbook,youwillbemoreinformedwhenmakingimportantfinancialdecisions.Topicsinclude:
PlanningandOrganizing
SpendingandCashFlow
DebtFreedomandCreditBasics
InsuranceBasics
Automobiles
HomesandMortgages
RetirementandWorkplaceBenefits
SavingandInvesting
Andmore…
DownloadNowathttp://www.themoneyprofessors.com/MMS
129
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TheMoneyProfessorsUniversity
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Tolearnmoreaboutouronlinecourses,checkoutTheMoneyProfessorsUniversitybyclickinghereoremailusatuniversity@TheMoneyProfessors.comorgoto:
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CoachingByTheMoneyProfessors
Ifyouareseriousaboutgettingyourfinancesinorderandyouwantaspecificplantoeliminateyourdebt,someonetoholdyouaccountable,andpersonalguidance,[email protected].
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Budgetingguidance
Printablechartstomakeyourfinancessimple
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Wanttoknowwhatcreditreallyisandhowitisused?Page15
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