Young, Gifted, Successful and
Financial Services Plenary Session:
Organize, Assess and Evaluate Your Debt,
and Create an Affordable Financial Plan to
Protect the Value of Personal Economy
Your Human Capital
Your Degree, Career Earnings and Goals
Leon Johnson, Jr., MBA, DEd
President & CEO EAS Group, LLC/MEDebt Solutions
APTA National Student Conclave (NSC)
Gait House Hotel
1:00 PM – 3:30 PM
Saturday, March 23, 2013
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC.
No reproduction, in whole or in part, without written permission.
One Degree Difference Between Broke
and Financial Comfort
Thee One in Sixty Rule
One in Sixty Rule states that a trajectory which is deviated by 1 degree off course will
place an object off of the intended destination by 1 mile for every 60 miles (57.3 to
be exact) of travel.
This rule illustrates the immense impact that a very minimal change can have on the
outcome in conjunction with other variables.
For example, while changing trajectory by 1 degree when traveling by foot for one
hour we will note a very minimum impact on the destination point, but the same
change in a jet airplane will take us to a point 1 mile away from the intended. In some
cases this would mean that instead of landing on a strip at an airport you would land
into the ocean or the mountains – neither of which will be particularly a pleasant
experience.
How would you like to be in a 747 landing 1 mile off – all it takes is 1 degree?
One Degree Difference Between Broke and
Financial Comfort
Uninformed and Improperly Managed Debt, Especially Student Loan Debt May Be
the Most Harmful and Devastating Threat to the Success of Physical Therapy
Students and Graduates
You must empower yourself to make better decisions about your finances with an
eye toward your future (40+ years) and future goals (your destination).
You must become financially literate.
You must understand the relationship and impact of informed money knowledge,
your money attitude & habits and your lifestyle decisions and how this relationship
impacts your net worth, credit, debt, security, goals & happiness.
YOU MUST TAKE CHARGE AND PLAN YOUR LANDING IF YOU DO NOT WANT TO
CRASH (FAIL TO MEET YOUR GOALS)!
Why is this workshop
important?
Workshop Objectives
•To empower you to make better financial decisions with
an eye toward your goals that will require using and
managing your money: earned and unearned money,
saved money, invested money and borrowed money.
•To bring “financial literacy, planning and the principles of
the science and art of finance” to the management of
student loan debt, all debt and income.
•Explore your attitude, knowledge and skill about managing
money and how your attitude, knowledge and money
IQ influences your life decisions and ability to achieve
your goals.
•Provide some basic money management information and
tools to help you protect your personal economy and
achieve your personal and professional goals.
Workshop Objectives
Using your unique individual financial details, you will be
guided through an instructional self help debt
management and budget affordability assessment exercise
that will provide personalized “budget indexes” that will
measure and provide:
• Loan Repayment Budget Stress and
Manageability Indexes.
• Financial Responsibility Affordability Stress Scores.
• Overall Debt Manageability Score.
Workshop Objectives
• This workshop will demonstrate how the financial
decisions you make today significantly impacts your
quality of life for the rest of your life.
• The session is designed to aid APTA members take
immediate control of your finances and future and do the
unthinkable;
Manage debt, build wealth, achieve goals, and be
successful and happy.
• Failure to understand and informatively manage these
elements is a near certain plan for personal and
professional disappointment, anguish, unhappiness and
financial catastrophe; aka – THE UGLY LIFE!
What is the Ugly Life?
• As an old football coach defined the Ugly Life:
“The Ugly Life is one where you feel that you
have an: Ugly Job, Ugly Boss, Ugly Car, Ugly
House, Ugly Furniture, Ugly Spouse, Ugly
Children, Ugly Neighbors – every thing in
your life looks and feels UGLY!”
If you choose not to read the
directions…
If you choose not to read the
directions…
A WARNING!!!!
• Warning this presentation may cause acute
fear, anxiety, pain and stress to some, perhaps
many and possibly most if not all in this room
because finding out what you don’t know
about financial matters; finance, money, debt,
particularly your student loans can be harmful
to every aspect of your current and devastating
to your future life; physically, psychologically,
and fiscally.
AN OPPORTUNITY!!!
• This intervention strives to inform, educate, possibly
inspire and bridge the knowledge, behavior and
attitude divide between financial matters; goals, debt,
credit, money reality, money mystic, saving, investing
and ignorance as well as help you understand basic
core principles of finance, manage all forms of debt,
particularly student loans and ENCOURAGE and URGE
you to Protect The Value of Your Education and Your
Future Self from the ravages of not being informed.
State of American Financial Literacy
• A study done by the National Council of Economic
Education found that one-third of Americans are
illiterate when it comes to personal financial
concepts and the status of the economy.
• 41 percent of U.S. adults, or more than 92 million
people living in America, gave themselves a grade
of C, D, or F on their knowledge of personal
finance.
Source: National Foundation for Credit Counseling, 2009 Financial Literacy Survey, April 2009
MEDebt Solutions - Informed Solutions For Student Loans, Debt, Money & Beyond
State of American Financial Literacy
• Parents often do a poor job teaching their kids about
finance.
• The 2011 National Foundation for Credit Counseling
financial literacy survey found that 42% of Americans
picked up their money habits from their parents.
• Yet 56% of those adults do not have a budget, 28% don't
pay their bills on time, 32% don't save for retirement and
33% don't save at all.
• Kids pick up on parents' financial actions, but it's not always
clear to them what they should be emulating or avoiding.
That has long-term financial consequences.
Source: National Foundation for Credit Counseling, 2009 Financial Literacy Survey, April 2009
Money & Debt
• Money and debt are “Tools” to be used to accomplish things
- build wealth and support goals, not merely to buy things.
• Like any tool you must hone your skills, practice and take
control/action if the tools are to work for you and become
productive, efficient and effective!
• Money is an intense personal issue, often difficult to
acknowledge and usually unspoken – the last taboo.
• We all see money in the relative, relative to our own money
experiences, rather than standard measures.
• People, most students and many professionals, who feel they
should know about money but don’t, find it less embarrassing
not dealing with the issue.
• Money is never just about money.
• Money and our relationship with money is
an emotional issue.
• Money and our relationship with money
are about power, dependency, control,
communication, conflict, resolution,
status, ego, comfort, security, fantasy,
escape, anxiety and freedom.
• Money is even about happiness.
• Money cannot buy happiness, but it plays
a critical role.
www.MEDebtSolutions.com
• Money Changes
Everything!
Money Changes Everything!
“When money speaks, the truth keeps silent.”
Russian Proverb
“If you want to know what a man is really like, take notice of how
he acts when he loses money.”
Simone Weil
“With money in you pocket, you are wise and you are handsome
and you sing well, too.”
Yiddish Proverb
“You can't force anyone to love you or lend you money.”
Jewish Proverb
Money Matters
• Money is a finite resource for each of us,
different amounts but finite.
• By its very nature, we constantly make
choices about our money and our choices
determine our experiences in life.
• Informed choices makes for better
experiences.
• Money Matters – Make it Count
http://www.youtube.com/watch?v=MZ1YC8_-3rE
Money Changes Everything
• Over and over again, studies show that health is linked to
wealth. It even matters where a person lives.
• In a new analysis of Medicare beneficiaries, Stephanie
Raymond and Kristen Bronner of Dartmouth College find that
the lowest death rates are in the wealthiest places.
• In San Francisco, with a per capita income of $57,796, just
4.16% of Medicare beneficiaries die each year.
• But in Tuscaloosa, Alabama, whose per capita income is
$24,257, the annual death rate was 5.97% - that’s a 43.5%
difference.
Source: The New York Times, January 3, 2007, A Surprising Secret to a Long Life: Stay in School by Gina Kolata
Money Change Everything
• If someone developed cancer, heart disease
or lung disease -– the household’s income
declined by an average of more that $37,000.
• And its assets – its wealth - fell by $49,000
over the ensuing eight years, even though
out-of-pocket medical expenses were just
$4,000.
•
Source: The New York Times, January 3, 2007, A Surprising Secret to a Long Life: Stay in School by Gina Kolata
Does Money Really Change Everything?
• Cosmopolitan magazine, citing an unnamed
online dating study, said that women would
“relax their standards of how tall they want
their mate to be” if the man earned enough
money.
• How much?
Does Money Really Change Everything?
• A man who is 5-foot-6 would need to make
$175,000 more a year to be considered as
desirable as a man who is 6 feet tall.
That’s a little over $29,000 per year per inch of height!
Financial literacy is needed
•
Isaac Bowers, a senior program manager for Educational Debt Relief and
Outreach at Equal Justice Works wrote in an online U.S. News & World
Reports article, Avoid Loan Delinquency and Default, commenting on
the report wrote:
A few lessons are clear:
• Student loan servicers, guaranty agencies, financial aid offices, and
other organizations should ensure student loan borrowers have the
information and counseling they need to avoid repayment problems.
• Students need to carefully consider the amount of debt they are able
to take on in order to finance their education. They also need to
understand and utilize repayment options—such as forbearance,
deferral, income-based repayment, and public service loan
forgivingness—to avoid delinquency and default.
• We should all reconsider the effectiveness and the equity of relying on
student loans to finance the cost of a higher education.
Source: http://www.ihep.org/assets/files/publications/a-f/Delinquency-The_Untold_Story_March_2011.pdf
Finance is a science
• Finance is a science of funds management and resource
allocation which includes saving money, investing money,
lending money, borrowing money, spending money and the
interrelatedness of time and risk.
• Only those who have been educated, trained and/or
experienced and committed to fiduciary principles in the
disciple have the ability to intelligently navigate and guide
others through this maze.
• Finance is NOT financial aid.
• Unless one is a trained experienced financial professional with
student loan expertise one would typically not know how to
best assess and manage student loan debt in combination
with a given salary, expenses and goals.
Your Values & Debt
• The way you spend reflects your values and what
you think is important in the world.
• Carrying an ongoing credit card balance is an
indicator that you cannot afford your life.
• According to Warren Buffett, “The only types of debt
that make any reasonable sense are student loan
debts, mortgage debt on a reasonable small home,
and car debt on your very first car. After that, you
should do everything in your power to avoid further
debt.”
An Investment in Knowledge Pays
the Best Interest!
- Benjamin Franklin
Academic Degrees & Intuition is Not Enough
When it Comes to Money & Finance
• MOST OF US ARE NOT AS SMART AS WE THINK WE ARE WHEN IT
COMES TO FINACIAL MATTERS UNLESS WE HAVE BEEN EDUCATED
AND TRAINED IN THE DISCIPLINE AND EVEN THEN MANY ARE NOT
AS SMART AS WE THINK WE ARE.
• OVERCONFIDENCE IS WHAT HAPPENS PRECISELY BECAUSE WE
THINK WE KNOW A LOT ABOUT THE SUBJECT, BUT IT CAN LEAD US
TO MISTAKES THAT IN HINDSIGHT WILL BE GLARINGLY OBVIOUS.
• THE TRICKY PART IS THAT WE DIDN’T KNOW IT AT THE TIME.
Source: Investing With the Heard, Carl Richards, Bucks, the blog about money at nytimes.com/bauks NYT, January 22, 2011
APTA – Member Benefit Education Finance Program
Reality check: Good news/bad news
Interesting Facts:
Ranking American families by income, the top 10
percent of households earned an average of
$349,000 in 2010.*
.
The average net worth of the same families was $2.9
million.*
90% of millionaires are college grads but only 5%
have law degrees and only 3% went to med
school.**
*Source: The New York Times, For U.S. Families, Net Worth Falls to 1990s levels, by Binyamin Appelbaum, June 12, 2012
**Source: Money Magazine, April 2011
Personal finance is about impulse control
• Personal finance almost always comes back
to impulse control. If you can’t control your
impulses and desires when it comes to
spending money, financial success will almost
always be elusive in your life. You won’t get
ahead if you can’t control yourself.
Building wealth, can be very easy!
• Take a blank sheet of paper and designate it
an amount of money you plan on starting your
saving.
$1,000.00
Building wealth!
Tear the sheet in half.
You now have $2,000
Building wealth!
Tear the sheet in half again.
You now have $4,000
Tear the sheet in half again.
You now have $8,000
Building wealth!
Tear the sheet in half again.
You now have $16,000
Tear the sheet in half again.
You now have $32,000
Building wealth!
Tear the sheet in half again.
Having started out with just one sheet of paper and never
adding another sheet of paper you now have 64 pieces of
paper.
Applying the Rule of 72 if the interest rate was 10% your
single $1,000 deposit final balance would be
$64,000
THIS IS THE POWER OF COMPOUNDING INTEREST.
in approximately 44 years – and all that was needed was to
start early and let time work for you.
Building wealth, is very easy!
Had you started with the single $1,000 and
added just $100 each month (about
$3.30/day) for deposits totaling $53,8000
your
Final Savings Balance:
?????
Building wealth, can be easy!
Had you started with the single $1,000 and
added just $100 each month (about
$3.30/day) for deposits totaling $53,8000
your
Final Savings Balance:
$ 1,027,730.94
Investing is about behavior, not skill.
• Investing is about behavior, not skill. Successful
investing is about how you behave. Buying high
and selling low is dumb.
• It’s important to remember that you could own a
“mediocre” mutual fund, and if you behave
correctly you can outperform 99 percent of your
neighbors.
• On the other hand, if you spend your whole life
searching for the “best” investment, you can ruin
your entire lifetime return in one single
behavioral mistake.
The Legend of Earl Crawley
• For more than 40 years, Earl Crawley, who struggles with
dyslexia has been a parking lot attendant, never earning
more than $20,000 a year.
• Without benefit of a college degree, listen to what Mr.
Crawley accomplished.
• http://link.brightcove.com/services/player/bcpid219243162?
bclid=174314760&bctid=1173345143
• Most of us could learn quite a lot from Mr. Earl. Be sure to
Goggle him and learn his story.
Men & Women are Different
• A growing body of research has found that men and women
invest differently, and in at least one important respect, women
may be better at it.
• The latest data comes from Vanguard , the mutual fund company.
Among 2.7 million people with I.R.A.’s at Vanguard, found that
during the financial crisis of 2008 and 2009, men were much
more likely than women to sell their shares at stock market lows.
Those sales presumably meant big losses — and missing the start
of the market rally that began a year later.
• Male investors, as a group, appear to be overconfident, said John
Ameriks, head of Vanguard Investment Counseling and Research
and a co-author of the study. “There’s been a lot of academic
research suggesting that men think they know what they’re
doing, even when they really don’t know what they’re doing,” he
said.
Source: How Men’s Overconfidence Hurts Them as Investors, The New York Times, Jeff Sommer, March 13, 2010
Men & Women are Different
• Women, on the other hand, appear more likely to
acknowledge when they don’t know something — like
the direction of the stock market or of the price of a
stock or a bond.
• Staying the course and minimizing costs — selling high
and buying low, if you trade at all — are the classic
characteristics of good long-term, buy-and-hold
investors. But during the financial crisis, a Vanguard
study showed, men were more likely than women to
trade — and to do so at the wrong times.
•
Source: How Men’s Overconfidence Hurts Them as Investors, The New York Times, Jeff Sommer, March 13,
2010
You Cannot Start Saving Too Soon!
An early accumulation of funds is more important than interest
rate and can be used to help finance some of your most
important and expensive goals such as a home, a
business/practice, retirement, kid’s education and philanthropic
endeavors.
MEDebt Solutions - Informed Solutions For Student Loans, Debt, Money & Beyond
You Cannot Start Saving Too Soon!
• Your specific investment choices matter less than the
simple fact you’re investing.
• So often, people put off investing because they’re afraid
of making a mistake and investing in the wrong thing.
• That, in itself, is a far bigger mistake.
• You’re far better off investing in a poorly-returning
investment than not investing at all.
• You’re better off starting the first possible day on your
retirement plan because it’s your investing dollars that
make the difference when you’re just starting out, not
the perfect investment.
Source: The Simple Dollar - The Simple Dollar - “Ten Things College Graduates Need to Know About Finances and Careers”
You Cannot Start Saving Too Soon!
• Even putting money in a savings account is a
form of investment (it’s a stable and highly
liquid investment with low returns).
• You’re far better off starting a savings plan
now than you are putting it off because you’re
not sure exactly where to put the money.
• If you don’t know how or where, put your
money in a savings account. You can always
move it later.
• Don’t let your uncertainty about the specifics
keep you from saving and investing money
now. If you don’t know for sure, just go as
simply as possible.
•
Source: The Simple Dollar - The Simple Dollar - “Ten Things College Graduates Need to Know About Finances and Careers”
Saving for retirement in your 40’s & 50’s versus
starting in your 20’s
• How much do you need to save so that you can retire at
age 65?
• People in their 40’s and 50’s spent a big chunk of their
adult life not having to save for retirement. This gave them
more flexibility with their money in their twenties and
thirties than people who were already saving for
retirement.
• On the other hand, people who start saving early don’t
have to save as much overall as people who start later on.
• Which approach is better?
•
Source: The Simple Dollar, “How Important Is It to Start Early?” November 3, 2011
Saving for retirement in your 40’s & 50’s versus
starting in your 20’s
• Let’s say you’re 20 years old right now.
• You want to have $2 million set aside for
retirement at age 65 and, magically, there’s
an index fund out there that will return 7% a
year (based on the 7% on what Warren
Buffett suggests is a good number to use for
average stock market returns going forward).
•
Source: The Simple Dollar, “How Important Is It to Start Early?” November 3, 2011
Saving for retirement in your 40’s & 50’s versus
starting in your 20’s
• If you start investing at age 20, you’ll need to put aside
about $510 a month to reach this goal.
• If you start at age 25, you’ll need to set aside about $725 a
month to reach this goal, but you don’t have to save
anything from ages 20 to 25.
• If you start at age 30, you’ll need to set aside about $1,050 a
month to reach this goal, but you don’t have to save
anything from ages 20 to 30.
• If you start at age 35, you’ll need to set aside about $1,530
a month to reach this goal, but you don’t have to save
anything from ages 20 to 35.
•
Source: The Simple Dollar, “How Important Is It to Start Early?” November 3, 2011
Saving for retirement in your 40’s & 50’s versus
starting in your 20’s
• If you start at age 40, you’ll need to set aside about $2,270 a
month to reach this goal, but you don’t have to save
anything from ages 20 to 40.
• If you start at age 45, you’ll need to set aside about $3,480 a
month to reach this goal, but you don’t have to save
anything from ages 20 to 45.
• If you start at age 50, you’ll need to set aside about $5,600 a
month to reach this goal, but you don’t have to save
anything from ages 20 to 50.
•
Source: The Simple Dollar, “How Important Is It to Start Early?” November 3, 2011
Saving for retirement in your 40’s & 50’s versus
starting in your 20’s
• As you read through those previous scenarios, you probably
thought that the amounts early on were quite manageable, but
when you got to age 50, you’re likely thinking that it’s bordering
on impossible.
• That’s the lesson here. You can forego the early retirement
savings, but catching up later on can be incredibly punishing and
the longer you wait, the more punishing it gets.
• Thus, the advice is to start saving for retirement right now, no
matter what age you are.
• Even if you can’t save very much, start by saving something.
• If you’re not saving, you need to be doing something else that’s
financially urgent with your money.
•
Source: The Simple Dollar, “How Important Is It to Start Early?” November 3, 2011
Saving for retirement in your 40’s & 50’s versus
starting in your 20’s
• For example, if you just save $100 per month starting at age
20 in the above retirement account, increase it to $200 a
month at age 30, $300 a month at age 40, $400 a month at
age 50, and $500 a month at age 60, you’ll have $720,000
saved for retirement.
• Double each of those numbers and you’re getting close to
where you need to be.
• There’s no greater important financial lesson than to Start
Saving Now, even if it’s just a little bit.
• Don’t burden your future self with crippling amounts of
retirement savings or employment until the very end of
your life.
Source: The Simple Dollar, “How Important Is It to Start Early?” November 3, 2011
• Saving for Retirement Must Come First.
• Without question, saving for retirement is a
major priority that’s placed before virtually all
other things.
• A goal of saving 20% of your take-home pay
may seem beyond reach at this time and it is
not easy however, it’s important to remember,
though, that some of that 20% refers to all
saving including retirement.
Retirement
• Without question, saving for retirement is a
major priority which requires starting early
contributions over longer periods of time – 30
– 40 + years.
• It is of great importance and priority and the
data confirms that you should take full
advantage of retirement funds and maximize
any and all employer matching.
Start Saving Early
•
•
•
•
Hazel and Bob both save $1,000 per year
($83.33 per month or $19.23 per week –
something everyone here can do).
The money each saves earns 10% interest
per year.
Hazel starts at age 22 and stops at age 30
(8-years).
Bob starts at age 30 and stops at age 65
(35-years).
Start Saving Early
Age
Hazel
Invests
Growth
Bob
Invests
Growth
22
1,000
1,100
0
0
23
1,000
2,310
0
0
24
1,000
3,641
0
0
25
1,000
5,105
0
0
26
1,000
6,716
0
0
27
1,000
8,487
0
0
28
1,000
10,436
0
0
29
1,000
12,579
0
0
MEDebt Solutions - Informed Solutions For Student Loans, Debt, Money & Beyond
Start Saving Early
Age
Hazel
Invests
Growth
Bob
Invests
Growth
30
0
13,837
1,000
1,100
31
0
15,221
1,000
2,310
32
0
16,743
1,000
3,641
33
0
18,418
1,000
5,105
34
0
20,259
1,000
6,716
35
0
22,285
1,000
8,487
36
0
24,514
1,000
10,436
37
0
26,965
1,000
12,579
38
0
29,662
1,000
14,937
39
0
32,628
1,000
17,531
40
0
35,891
1,000
20,384
www.MEDebtSolutions.com
Start Saving Early
Age
Hazel
Invests
Growth
Bob
Invests
Growth
40
0
35,891
1,000
20,384
41
0
39,480
1,000
23,523
42
0
43,428
1,000
26,975
43
0
47,771
1,000
30,772
44
0
52,548
1,000
34,950
45
0
57,802
1,000
39,545
46
0
63,583
1,000
44,599
47
0
69,941
1,000
50,159
48
0
76,935
1,000
56,275
49
0
84,628
1,000
63,002
50
0
93,091
1,000
70,403
MEDebt Solutions - Informed Solutions For Student Loans, Debt, Money & Beyond
Start Saving Early
Age
Hazel
Invests
Growth
Bob
Invests
Growth
51
0
102,400
1,000
78,543
52
0
112,640
1,000
87,497
53
0
123,904
1,000
97,347
54
0
136,295
1,000
108,182
55
0
149,924
1,000
120,100
56
0
164,917
1,000
133,210
57
0
181,409
1,000
147,631
58
0
199,549
1,000
163,494
59
0
219,504
1,000
180,943
60
0
241,455
1,000
200,138
Start Saving Early
Age
Hazel
Invests
Growth
Bob
Invests
Growth
61
0
265,600
1,000
221,252
62
0
292,160
1,000
244,477
63
0
321,376
1,000
270,024
64
0
353,514
1,000
298,127
65
0
388,865
1,000
329,039
Value at
Retirement
$388,865
Value At
Retirement
$329,039
Less Total
Contributions
$(8,000)
Less Total
Contributions
$(35,000)
Net Earnings
$380,865
Net Earnings
$294,039
• Hazel invested $8,000 total.
• Bob invested $35,000 Total - $27,000 more than Hazel ...and Bob never catches up.
• Hazel has $27,000 more than Bob to use for other important priorities and goals.
• Hazel has also net earning of $86,862 (26.53%) more than Bob.
www.MEDebtSolutions.com
How Much Do You Need To Save
According to Fidelity Investments guidelines:
Workers should save at least 8 times their final
salary to meet basic income needs in
retirement assuming living until 92.
•
You should have the equivalent of your
annual salary in savings by age 35 to meet
the benchmark;
•
To stay on pace you should have saved
twice your salary by 40;
•
Four times’ salary by 50, five times by 55
and six times by 60.
How Much Do You Need To Save
According to Fidelity Investments on a salary of
$60,000 you would need:
• You would need to have $240,000 in savings at
age 50 to be on track.
Although many will need more, especially at
higher pay levels, saving eight times’ income
by age 67 should provide most workers with
roughly 85% of their pre-retirement income in
retirement.
Fidelity’s 12 million account holders had an
average balance of about $73,000.
The Gender Gap
• The American Association of University Women (AAUW)
recently released a new study showing that just one year out
of college, millennial women are paid 82 cents for every
dollar paid to their male peers.
• Women are paid less than men are even when they do the
same work and major in the same field.
• The AAUW report, Graduating to a Pay Gap, also found
that 20 percent of women working full time one year after
graduation devote more than 15 percent of their earnings to
paying back college loans.
Understanding The Gender Gap
• “In our experiments, we found that with
ambiguous information, women set less
ambitious goals,” said Ms. Riley Bowles, an
associate professor at Harvard’s Kennedy School
of Government who ran the study. “They asked
for less in a competitive negotiation and got
less.”
• That theory also holds in other areas where there
aren’t set expectations, like executive bonuses
and stock options. “You get bigger gender gaps in
those less standard forms of pay,” she added.
•
Source: The New York Times – Your Money, A Toolkit For Women Seeking A Raise, Tara Siegel Bernard, May 15, 2010
Understanding The Gender Gap
• Experts say that many women, despite strides in
education and in the workplace, simply aren’t as
confident and knowledgeable about financial matters as
men.
• “Research has shown that women, even professional
women with good jobs and successful careers, tend to be
less financially literate than men,” said Annamaria
Lusardi, an economics professor at Dartmouth College.
• Not all women lack financial skills and many may simply
lack time. But studies show that women don’t find money
and investing as interesting as men.
•
Source: The New York Times – Your Money, Hot Topic for Women: Our Budgets, Ourselves, Tara Siegel Bernard, April 24,
2010
Understanding The Gender Gap
• According to a 2007 study on gender differences by
Tahira Hira of Iowa State and Cazilia Loibl of Ohio State
University, women are still less likely to be socialized in
financial matters, and they are more likely than men to
find investment decisions stressful, difficult and time
consuming.
• The study also found that it often takes a life event, like
getting married, to prompt women to save and invest,
whereas men were more likely to start investing
gradually.
•
Source: The New York Times – Your Money, Hot Topic for Women: Our Budgets, Ourselves, Tara Siegel Bernard, April 24,
2010
Understanding The Gender Gap
• Women also prefer to learn about money in person or in
groups with others in their situation, as opposed to
curling up with a book.
• While women may be less likely to enjoy investing, studies
show that they may inherently be better investors than
men.
• Females are less prone to risky behavior and unlike their
confident male counterparts, they’re more likely to fess up
to their own ignorance.
• “One reason that women might be better financial decision
makers, despite displaying, in general, lower literacy than
men, is that women know what they do not know,” said
Professor Lusardi, director of the Rand Financial Literacy
Center.
•
Source: The New York Times – Your Money, Hot Topic for Women: Our Budgets, Ourselves, Tara Siegel Bernard, April 24, 2010
Understanding The Gender Gap – 50% decrease in income
• “On average, women experience a 50%
decrease in income upon becoming
widowed and only a 20 percent decrease
in expenses.”
Maureen Mohyde, Director of Corporate Gerontology, Hartford Financial Services Group
Understanding The Gender Gap – the data
• According to the National Center for Women and
Retirement Research, as many as 9 out of 10 women will
be solely responsible for their finances at some point in
their lives. The consequences of such circumstances can
financially cripple many women. The numbers speak for
themselves:
• Over 75% of women are widowed at an average age of
56, and 1 in 4 of these women are broke within two
months of being widowed.
Source: Women and Investing: Take Charge of Your Financial Life, Kathleen Williams, August 2, 2009,
Women’s Media - http://womensmedia.com/
Understanding The Gender Gap – the data
•
Less than 15% of women who are married or
living with a significant other feel responsible for
planning retirement.
•
Only 41% of women participate in their employer’s
401(k) plan.
•
87% of poverty stricken elderly Americans are
women.
Source: Women and Investing: Take Charge of Your Financial Life, Kathleen Williams, August 2, 2009, Women’s Media http://womensmedia.com/
Some money moves for women
•
Some money moves women can make:
Get involve in managing the family’s finances. As a couple,
spend about 15 – 30 minutes per week discussing the family finances.
Make this a regular routine. Understand what is going on with the
investments. Review all bank and investments statements monthly.
Know where your money is. Keep organized records.
Be sure to have your own retirement account. Women often do
not have their own retirement accounts. Stay-at-home mothers
frequently use all of the household money for the children and food.
Nothing is put into retirement plans for these women. Meanwhile, the
husband’s account is racking up the dough. Then they divorce. Don’t
let this happen to you.
Get professional financial advice. Be sure to get financial advice
before you suddenly become single because of divorce or widowhood.
This will make your financial road smoother and will prepare you prior
to these life events.
Source: Investing Wisely: What Women Need to Know, Kathleen Williams, 24 April 2011 , http://www.womensmedia.com/money/274-investing-wiselywhat-women-need-to-know.html
Some money moves for women
• Plan your financial life as if you will be on your own someday.
Unfortunately the statistics are real. Half of all marriages end in
divorce. Women outlive men by seven years. Plan your life
with this in mind. Manage your finances together, have
separate credit cards in your name. Make sure that your name
appears on all investment accounts accumulated during the
marriage. Get adequate term life insurance coverage that will
cover all last expenses and replace at least 60% of joint
earnings.
Source: Investing Wisely: What Women Need to Know, Kathleen Williams, 24 April 2011 ,
http://www.womensmedia.com/money/274-investing-wisely-what-women-need-to-know.html
Some money moves for women
• Don’t use your 401(k) as an in-and-out fund. Many women use
their retirement accounts to rescue their families from tight
financial jams. This account should be used for retirement, not as
an emergency or vacation fund. Establish a money market account
for emergencies and leave your retirement funds for what they are
meant to be used for – your retirement.
• Write down your financial goals. Sit down and make a list of all
your financial goals. Knowing what you want helps to put you on
the road to financial success. Whether it’s learning to make wise
investments, or planning for retirement, you have to know what
you want in order to plan how to achieve it. The Certified
Financial Planner Board of Standards Research has found that
consumers who use professional financial advisors worry less
about their financial futures.
Source: Investing Wisely: What Women Need
to Know, Kathleen Williams, 24 April 2011 , http://www.womensmedia.com/money/274investing-wisely-what-women-need-to-know.html
Managing The Gender Gap
• A study from the Hartford Financial Services Group and
the MIT AgeLab found that couples who divide up
financials tasks, where one spouse handles day-to-day bill
paying and the other investment management, fare
better, being more likely to have more savings and to
develop a financial plan for the surviving spouse than
those who hand over the financial reins to one person
while the other takes a back seat.
Money & Debt Aptitude + Attitude = Success!
The rich know that wealth, economic security, financial
stability, assets and most financial obligations are build on
the savvy use of “good” debt, debt which is leveraged,
hedged and manageable when given access to favorable
rates.
Good debt is the informed intelligent use of OPM (Other
People’s Money) at favorable rates to buy value at today’s
prices and pay with tomorrow’s dollars.
Living Below Your Means (LBYM)
• Approach student life with an LBYM* attitude
• Aim for living on 70% of what is available to you
• Put the other 30% in an interest-bearing savings
account or money-market fund until needed—or
reduce how much you borrow
• Pick up cost-saving tips from Motley Fool’s “Living
Below Your Means” discussion board at:
www.fool.com
(Registration is required to use the Web site. It’s free, although some of Motley Fool’s
services are not free.)
*Living Below Your Means and LBYM are trademarks of The Motley Fool, Inc.
Higher Education’s Dirty Little Secrets?
Hint: It’s about financial aid!
Congratulations!!
Dirty little secrets
“It’s too easy for students to borrow the maximum loan
amount and too many students treat their financial aid
like lottery winnings”
www.MEDebtSolutions.com
Financial Aid’s
Dirty Little Secret
“Student loans debt is liken to tattoos:
They’re easy to get and people tend to
get them when they're young, and
they’re awfully hard to get rid of.”
Andy Winchell, Bankruptcy Lawyer, Summit, N.J.
Dirty little secrets
• Too many students think a job will make all their financial
problems disappear. They're wrong.
• Too many students have an unrealistic idea of how much
money they'll make when they enter the work force.
• Too many students forget that a healthy percentage of their
pay will be taken out for taxes, health insurance, Medicare,
Social Security and other deductions.
• Too many students let their loans become an afterthought
with no idea of how much they borrowed and how they are
going to pay it back.
• An overpriced degree or no degree can be financial suicide.
Dirty little secrets
• Schools have insufficient incentive to keep the cost of education
down thus with increasing cost comes increasing levels of
borrowing.
• Without institutional or government intervention student
unknowingly become responsible for figuring out whether they
can afford their student loans.
Dirty little secrets
“ At the time that people graduate from
school, almost every student who borrows,
although technically unlikely not able by
regulation, is literally bankrupt because they
have liabilities that exceed their assets.”
Shelly Repp, general counsel at the National Council for Higher Education Loan Programs
MEDebt Solutions/EAS Group
Debt is uniquely personal
• Because each individual presents a financial situation that is
uniquely personal (levels of debt, other debt, committed
financial obligations, financial assets and liabilities, money IQ,
goals, career plans, personal plans, tolerance for debt, money
personality), every financial plan must be personalized.
• In the case of personal financial planning and money
management, one size does not fit all; each person must be
comprehensively reviewed, evaluated and assessed.
• There are many pieces of each student’s and graduate’s
financial puzzle that may look alike in general but there is only
one YOU; and the plan must be specific to a level of debt,
income and goals.
MEDebt Solutions - Informed Solutions For Student Loans, Debt, Money & Beyond
Have a plan and be informed
• To protect the value of your education investment you
must keep your student loan debt manageable.
• To keep your student loan debt manageable you must
comprehensively understand your situation, in detail,
preferably before you agree to it. This seldom happens.
• Don’t be insulated from your loans; know what you are
borrowing: (type of loan, name of loan, amounts, interest
rates, terms, repayment options) and what resources and
options you will have to manage your loans.
MEDebt Solutions - Informed Solutions For Student Loans, Debt, Money & Beyond
Have a plan and be informed
• Your first defense against unmanageable debt is having a plan –
a comprehensive financially informed plan which is in harmony
with your goals, incorporates living within your means, preferably
below your means and emphasizes saving and investing that
begins no later than with the first post-grad pay check;
• Your plan begins with a clear articulation of your goals and an
informed counseled understanding/assessment of affordability –
not needs as with financial aid or wants.
www.MEDebtSolutions.com
Have a plan and be informed
• Your plan must include an affordability assessment which will
give you guidance in knowing the future implications of
borrowing, how much you should or are willing to borrow,
what sort of payback your borrowing will entail, and just how
little or how much your expenses will be covered after
saving/investing.
• Do you know what your monthly payments will be for your
student loans?
• Do you know what your monthly income will be and what
percentage of it will be required for loan repayment?
www.MEDebtSolutions.com
If you choose not to read the directions…
•Failure to comprehend the financial reality of your debt and not
understanding and taking control of your debt and money by
having an informed plan to manage your debt and money is a
near certain plan for personal and professional :
hardship, disappointment, anguish, unhappiness, failure,
bankruptcy or being eternally on the precipice of financial
catastrophe; just one paycheck, one illness, a disability or a
divorce away .
Uninformed debt is more than money
• Uninformed or improperly managed education debt is a
quiet killer of ambition and choice whose outwards signs of
difficulty are generally ignored until credit limits or earnings
fail to reconcile with cash flow availability. Not enough
money or credit to meet bills.
• Uninformed or improperly managed debt is as much an
impediment to graduates as any addiction yet student loan
debt is near effortlessly, unfettered and widely distributed
with virtually no training, instructions or regulations to
protect student borrowers from the abuse of “uninformed or
improperly managed debt.”
www.MEDebtSolutions.com
Uninformed debt is more than money
• There are very few nexus points more important to the future of
health care than the informed management of student debt.
• In increasing numbers the near unfettered access to student loans
represents far more than students and graduates can reasonably
understand how to manage and afford without access to financial
expertise – similar to the lending debacle to sub-prime borrowers
for mortgages – but for graduates it will be the value of the degree
and career earnings that will be seized.
• Uninformed or ill-informed managed debt may be the most harmful
and devastating threat to individual health professionals and health
care today and in the years to come.
MEDebt Solutions - Informed Solutions For Student Loans, Debt, Money & Beyond
Too Much Debt?
• Too much debt is where the borrower is over-leveraged and
payments cannot be reasonably made when due and
borrower's goals, ambitions and perceptions are altered based
upon money issues and concerns.
• It is unfortunate and shameful that the financial aid and student
loan process, including the institutions, student and graduate's
financial naiveté and student schedules and pressures do not
make it possible for students to recognize, calculate and
comprehend the critical importance of understanding and
managing money and debt, particularly in the early years of
their education and independent adult professional lives.
Too Much Debt?
• Another important measure of too much debt is any level of debt that
changes your perspective, goals and influences choices based upon the
amount of debt you are responsible for repaying.
• Most students and graduates do not want to be in a position where their
personal and professional choices are determined or highly influenced
by a salary and/or specialty choice.
• With an informed debt and money management plan which minimizes
debt and emphasizes living within and below your means even those
who still find themselves highly indebted and overleveraged can in a
relatively short time become financially stable and secure – but the
process must begin immediately
If you must borrow
• If you must borrow most of the cost of your
education, borrow only what you
absolutely need; basic not lifestyle.
• “Don't forget you're poor!"
• If loans make it possible for you to attend
school, you need to remember that “Your
life is a ‘Financial Illusion’ and that in
reality you're BROKE!”
• Because you're broke, you should act like
you’re broke and not spend and act like it's
all paid for from lottery winnings.
APTA – Member Benefit Education Finance Program
It’s not mission impossible
• Properly understood and addressed with expert consultation,
an overleveraged and financially unstable situation can often be
reconciled or restructured.
• The key to financial success and goal achievement is being
financially informed and responsible with an affordable debt
and money management strategy and plan in place.
• A strategy and plan which provides for simultaneous debt
management and emphasizes building financial assets through
early saving and investing.
• Maintaining and strengthening credit status is also a priority.
Failure to comprehend debt
MEDebt Solutions - Informed Solutions For Student Loans, Debt, Money & Beyond
Debt as an investment
• For example a graduate who averages $60,000
per year in salary will break-even (recoup the
$235,000 student loan expense - $100,000 @
6.8% repaid over 30-years - includes interest
and principal) in 3 years and 11 months.
• This is the same as paying $235,000 (including
interest) for a house and later selling it for
$1.8 million; it is a spectacular return on a
financial investment.
Debt as an investment
• For indebted students and graduates, taking
on additional unnecessary debt above the
“pure basics - I am talking survival – basic
needs” during school or early on following
graduation or during the early (7 – 10)
employment/practice years, even for what is
generally thought of as “good” debt like a
house substantially changes the financial
profile, balance sheet/net worth, break-even
point and long-term financial status and
stability.
Debt as an investment
• Adding a $140,000 house at a low 4.8 percent interest
will mean adding $264,000 in total payment obligations
(including interest) to the $235,000 of student loans
payment obligations.
• This now creates a total debt liability of $499,000.
• Given the same income scenario of $60,000/year postgraduation income over the next 30-years the PT’s BEP
becomes 8 years and 4 months years.
Debt as an investment
• The equity in the home for the graduate who buys the house after
graduation would depend mostly upon the appreciation if any in the
property value less non-home value expenses such as closing cost,
escrows and maintenance.
• Do remember that the early years of mortgage payments are applied
almost exclusively to interest payment.
• Hence, the graduate is largely dependent upon the appreciation of the
value of their house to increase the assets side of their net worth.
• In order to access equity value you would have to either sell the home
or borrow using the home as collateral.
MEDebt Solutions - Informed Solutions For Student Loans, Debt, Money & Beyond
Debt as an investment
•
As the scenarios demonstrated, the most questionable and potentially
financially threatening move an indebted new graduate, early career
practitioner or a student can make is to take on any additional debt Too Soon.
•
Do not take on any additionally debt beyond what is absolutely necessary to
graduate, become licensed and meet ‘basic’ living needs/expenses – Too Soon.
•
Students and graduates need to know how to rationally assess their situation
and know the exact parameters of what they can afford to spend, buy and most
importantly need to save and invest.
•
Or have access to experience trained professionals that can help them assess
their situation.
MEDebt Solutions/EAS Group
Credit Scores
• Credit scores are on a scale from around 300 to 850, with
850 being the highest credit score possible.
• The national average credit score is 692, only 13% of the
nation's population has scores above 800.
• Roughly 15% of the population has a credit score lower
than 550.
• In general, a good credit score is anything above 700.
• 58% of Americans have credit scores above 700. The
national average is only 692 because the average is being
pulled down by some very low credit scores.
Source: 2011 Money-Zine.com - http://www.money-zine.com/Financial-Planning/Debt-Consolidation/NationalAverage-Credit-Score/
Credit Score
Percentage of People in Range of Credit Score Rating:
•
•
•
•
•
•
•
•
499 or less – 2% of the population- Extremely Poor
500-549 – 5% of the population - Poor
550-599 – 8% of the population - Poor
600-649 – 12% of the population - Good
650-699 – 15% of the population - Very Good
700-749 – 18% of the population - Great
750-799 – 27% of the population - Excellent
800 or more – 13% of the population - Best
Source: ComplexSearch.com - http://www.complexsearch.com/blog/what-is-a-good-credit-score/
What’s In Your FICO® Score
•
Source: www.MyFico.com
Know Your Credit History and Score
•
Steve Rhode, president of Myvesta, a
nonprofit consumer-education organization
says, each time you open a store credit card,
20 points are taken off of your credit score.
•
Source: Bankrate.com
Changing Reality & Taking Control
Real change occurs most easily when there is an
emotional connection made, a new relationship
with someone or a group that inspires and
reinforces that change.
Source: Change or Die by Alan Deutschman
Default rate higher than reported
• The default rate is much higher than the government leads
us to believe. Officially, the default rate on federally insured
loans is running at 7 percent, up 55 percent from its low in
2003. But this only measures the loans that went into default
during their first two years.
• It doesn’t count loans whose payments are being deferred for
one reason or another — for example, financial hardship.
• Many of those borrowers will default as soon as payments
come due again.
•
Source: Jane Bryant Quinn,7 Things They Don’t Tell You About Student Loans http://moneywatch.bnet.com/investing/blog/make-money/7-things-they-dont-tell-you-about-studentloans/690/
MEDebt Solutions - Informed Solutions For Student Loans, Debt, Money & Beyond
EVIDENCE
• The recent sobering report by the Institute for Higher
Education Policy, "Delinquency: The Untold Story of
Student Loan Borrowing” which focused on the nearly 1.8
million student loan borrowers who entered repayment in
2005 during their first five years of repayment, found that
the low default rates as publicly reported paint an
incomplete picture of the severity of the impact of
student loan debt because they exclude borrowers who
have difficulty repaying their loans but avoid default.
• Since the study did not include private student loans, it’s
most likely the situation is even more horrendous and the
magnitude of the problem is vastly understated.
EVIDENCE
The report revealed:
• A majority of students (56%) struggle to
repay their loans
• Overall, the study found that of the 56% who
struggled to repay, an incredible 41% of these
borrowers became delinquent or defaulted.
• More than a quarter, 26 percent, became
delinquent but did not default.
• About 15 percent became delinquent and
defaulted.
Default
• You are in default on most student loans if you fail to make
even one loan payment or make alternative arrangements for
your loan payment in over 270 days—that’s almost 9 months!
• The entire loan balance becomes due once you default.
• Many would say that there is no excuse for loan default
because the student loan have so many alternative choices
available.
• If repayment options/choices and strategies are not known,
emphasized and understood by the borrowers or the borrowers
do not have access to the necessary expertise to counsel them
then the alternative choices may as well not exist.
Consequences of Default & Delinquency
• The government and collection agencies can beat you with tactics not
allowed for other types of loans - tools unavailable to the collection of
other kinds of unsecured consumer debts.
• For example, the federal government can suspend payments or
participation from other federal payment programs; they can seize
tax refunds, garnish up to 15 percent of your disposable income, and
seize part of your Social Security or disability payments if you
receive more than $750 a month — all without getting a court order.
• Defaulted loans when turned over to collection agencies, the liability
for collection and court costs are added – as much as an additional
25% or more.
• Many private lenders can go after a borrower's estate upon their
death.
•
Source: Jane Bryant Quinn,7 Things They Don’t Tell You About Student Loans - http://moneywatch.bnet.com/investing/blog/make-money/7-thingsthey-dont-tell-you-about-student-loans/690/
www.MEDebtSolutions.com
Consequences of Default & Delinquency
• Many states can also cancel your professional
licenses, such as those for teachers, lawyers,
and healthcare workers, making it impossible
for you to find the work you’re trained for.
• On federal loans, you can be dunned until you
die. States limit the period of time that private
lenders have to sue, but once they get
judgments they can come after you for years.
• One reader, a grandmother of six, tells me she
is still being harassed. Lenders almost never
negotiate a reduced payoff.
•
Source: Jane Bryant Quinn,7 Things They Don’t Tell You About Student Loans - http://moneywatch.bnet.com/investing/blog/make-money/7-thingsthey-dont-tell-you-about-student-loans/690/
www.MEDebtSolutions.com
Consequences of Default & Delinquency
• Debtors can shed credit card debt and other unsecured
obligations through bankruptcy but can get out of
student loans only if they can show “undue hardship.”
That term is not defined by the bankruptcy code and,
lawyers have said, judges often take a narrow view of its
meaning.
• “The cases are so harsh in measuring what an undue
hardship is that anybody who is working and
maintaining any kind of home life has very little chance
of discharging these things in bankruptcy,” said Cathleen
Cooper Moran, a bankruptcy lawyer in Palo Alto, Calif.
APTA – Member Benefit Education Finance Program
Default is costly
• Bankruptcy is virtually a non-existent option with the
exception of filing for Chapter 13 which as a last resort puts a
freeze on lender’s add-on and interest charges (which could
easily add on 25% of the balance or more) but does not
resolve the debt up to that point.
• Of the 72,000 federal student loan borrowers who filed for
bankruptcy in 2008, just 29 succeeded in getting part or all of
that debt discharged, according to the most recent data from
the Education Credit Management Corporation.
Consequences of Default & Delinquency
• Delinquency can lower borrowers' credit scores and their
ability to obtain future loans, such as mortgages and auto
loans, and the terms upon which those loans are offered;
which makes everything that one buys on credit more
expensive and lessens one’s ability to save for future goals.
Default is costly
• In essence what students and graduates don’t
know and understand about managing
educational and All debt (which is different
from just making payments) is costly and
destructive to the quality of personal and
professional life and goals for the rest of their
life.
This is what physical therapy students and graduates can expect life to be like if they
do not understand and execute a plan which emphasizes the “core principles of
financial proficiency” in assessing the affordability of their debt and management of
future earning.
The Ugly Life!
Learn More….
Form A Money Support Group (MSG) or Investment Club
Research is fairly strong in noting that the
people around you affect how you approach
and value important decisions such as
education, family and consumption; all
determinates of the ability to manage money
and create wealth.
MONEY magazine research reported 64% of
wealthy individual reported networking helped
them succeed.
MEDebt Solutions/EAS Group
Build Your Financial Team







Professional Financial Adviser/Planner
Attorney
Professional Accountant (CPA)
Banker
Professional Insurance Advisor
MEDebt Solutions Advisor/Coach
Financial Aid Professional while in school
MEDebt Solutions/EAS Group
Protecting the Value of Student Physical Therapist’s and Physical
Therapist Prime Assets
• Not exercising an informed financial plan immediately upon
graduation and preferably earlier (with or before the first
paycheck) will result in long-term financial hardship, often
demonstrated by living pay check to pay check, carrying
balances on credit cards, paying higher interest rates at
less desirable terms, being late or missing payments and
making personal and financial decisions based upon
money; all signs of financial instability and distress.
• These living a lifestyle that cannot be afforded indicators
are also conditions that lead to personal and career
dissatisfaction and by extension a decline in patient and
community health care.
Richer and Happier!
Adopting good money management
habits rather than poor ones can
make you feel as much as 50 percent
richer and happier.
– Jean Chatzky, Today Show, October 2, 2003
MEDebt Solutions - Informed Solutions For Student Loans, Debt, Money & Beyond
Age Old Wisdom
“For age and want, save
while you may; no
morning sun lasts a
whole day.”
-Benjamin Franklin
http://www.earlyamerica.com/lives/franklin/portrait.html - Portrait of Benjamin
Franklin Engraved by J. Thomson, 1805. From an Original Picture by J.A.
Duplessis
New Age Wisdom
Keep your mind on
your money and
your money on
your mind
Snoop Dogg
Calvin Cordozar Broadus, Jr.
Take Control of Your Debt
The financial decisions you make as students makes going
forward as professionals, particularly regarding the use and
repayment of credit cards, student loans and salary will have a
huge impact and influence on the quality of your life for many
years to come.
By understanding money management, money behavior, money
habits, money decisions, money attitudes and student loan
repayment options you will be better prepared to take control
and make money change things for the outcomes you want.
MEDebt Solutions
Students Affordability Metrics / Rules of Thumb Index
Student Loan Payments are considered manageable when kept to no more than
12% of Gross Monthly Income and preferably below 10%.
Monthly Committed Expenses should be 50% - 70% of total remaining
income/financial aid (after all payments due school have been deducted).
Monthly Selected Wants should be 10% - 30% of total remaining
income/financial aid (after all payments due school have been
deducted).
Savings/Investment Goals should be $500 - 10% of total remaining income/financial
aid (after all payments due school have been deducted).
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in
part, without written permission.
www.MEDebtSolutions.com
MEDebt Solutions
Students Affordability Metrics / Rules of Thumb Index
Home Debt, rent/mortgage payments, related taxes and insurances, and other
related cost should be kept to no more than 32% of total remaining income/financial
aid (after all payments due school have been deducted).
Total Debt, home debt, credit card debt, auto loans and any other money owed
should not climb above 40% of total remaining income/financial aid (after all
payments due school have been deducted).
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part,
without written permission.
MEDebt Solutions - Informed Solutions For Student Loans, Debt, Money & Beyond
Every Student is Unique When it Comes to
Affordability Metrics / Rules of Thumb Index
• Each individual can and should decide how they wish to divide
up their Monthly Committed Expenses and Monthly Selected
Wants. Decide how to allocate your available funds (income
Less Total Deductions & Expenses Due the School) by
percentages and then work out the details. It is critically
important that you borrow as little as possible, do not run a
deficit and have at least a $500 cushion as an emergency fund.
• The key to student financial success and goal achievement is
being financially informed and responsible with an affordable
debt and money management strategy and plan in place for
simultaneous debt repayment and building financial assets (net
worth) through saving and investing. Maintaining and
strengthening credit history and credit scores is also a priority.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in
part, without written permission.
Every Student is Unique When it Comes to
Affordability Metrics / Rules of Thumb Index
• Successful goal achievement is the result of informed intelligent borrowing –
borrowing less, at low rates and only to pay for “basic education and living
necessities” and proficient credit management.
•
Borrowing too much, which is far too easy to do via financial aid and credit
cards, can easily turn an excellent investments like your education into an
unmanageable over-leveraged (not enough income to meet debt payments),
over-priced “bad” investment that will consume excessive amounts of future
income that would be better used for more productive purposes like saving
and investing for your goals.
• As a very wise financial planner often said, “As a student, live like a student
so you will not have to live like a student when you are a 45-year old
professional and your own kids are students.”
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part,
without written permission.
MEDebt Solutions
Affordability Metrics / Rules of Thumb Index for Graduates
Student Loan Payments are considered manageable when kept to
no more than 12% of Gross Monthly Income and preferably
below 9%.
Monthly Committed Expenses should be 40% - 60% of Net Monthly
Income.
Monthly Selected Wants should be 10% - 30% of Net Monthly Income.
Monthly Savings/Investment Goals should be 10% - 20% of Net Monthly
Income.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in
part, without written permission.
Affordability Rules of Thumb Index for Graduates
Student Loan Payments are considered manageable when kept to no
more than 12% of Gross Monthly Income and preferably below 10%.
Home Debt, rent/mortgage payments, related taxes and insurances,
and other related cost should be kept to no more than 31% - 35% of
Gross Income.
Total Debt, home debt, credit card debt, auto loans and any other
money owed should not climb above 36% - 43% of Gross Income.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part,
without written permission.
MEDebt Solutions - Informed Solutions For Student Loans, Debt, Money & Beyond
A Completed 5-Step Financial Worksheet is
REQUIRED to Develop a Personalized Debt Evaluation and Financial Plan
Step 1. Priority Goals Next 5 – 10 Years
Step 2.
Year Goals
1. ___Own a house_________________
2. ___Have a wedding_______________
3. _______________________________
4. _______________________________
5. _______________________________
6. _______________________________
7. _______________________________
8. _______________________________
9. _______________________________
10. _______________________________
FEDERAL LOANS:
In regard to the wedding it is contingent on finding
the right man to marry. I am not currently
engaged and moving forward I am hopeful to
find someone in the next 10-years who is debt
free. The company I work for is a for profit.
•
•
•
•
•
Salie Mae $88,967____
_______ ____________
_______ ____________
_______ ____________
_______ ____________
Step 3.
All Other Outstanding Loans & Revolving Credit:
Federal & Private/Alternative Student Loans:
Lender Name
Loan Type/Name
Loan Amt. $
Interest Rate %
( i.e. Stafford, PLUS)
1
2
3
4
5
Various
______
______
______
______
Staf, GPLUS, Consol__
__________________
__________________
__________________
__________________
_$121,188___
____________
____________
____________
____________
__5.75 – 8.5%____
________________
________________
________________
________________
PRIVATE/ALTERNATIVE STUDENT LOANS:
Lender Name Loan Amt. $
Interest Rate % Interest Type Repayment # of Years
(Fixed/Variable)
_4.0 – 8.25%
____________
____________
____________
____________
__VAR ______
____________
____________
____________
____________
________________
________________
________________
________________
________________
MONTHLY LOAN PAMENT DETAILS:
Name of Loan/Account
Interest Rate %
(Purpose: car, credit card, etc.)
1
2
3
4
5
_Best Buy_________
______________
_________________
_________________
_________________
____0%_______
_____________
______________
______________
______________
Minimum Required
Balance
Monthly Payment
_____$65_______________ _$1,100___
__________________________________
_______________________ _______
_______________________ _______
_______________________ _______
*Personalized Financial Planning Cannot Be Conducted Without a Completed Financial Worksheet. The quality of the data /information
determines the accuracy and quality of your plan.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
A Completed 5-Step Financial Worksheet is
REQUIRED to Develop a Personalized Debt Evaluation and Financial Plan
Select Graduate or Student*
Step 4. GRADUATE – Annual Income Resources & Expenses
Step 4. STUDENT – Annual Income Resources & Expenses
Available Annual Funds/Income:
Gross Salary – Before Deductions
Cash/Savings ($6,500)
Investments
All Other Sources
Total Gross Annual Income -
Available Funds/Income – Annual (12 months):
$__62,000_____
$______0_____
$______0______
$______0______
Financial Aid
Contributions to Education Expenses
From Personal Cash/Savings/Investments
Scholarship(s)
All Other Sources
Deductions & Expenses – Annual (12 months):
Deductions (Federal, State, Local Taxes,
Social Security, Medicare, Health Insurance,
Others – If actual deductions are unknown,
Estimate 25% or 30% of Gross Income)
Retirement Contributions
Tuition, Fees & Related Education Cost
Due School + Books
Taxes/Social Security/Medicare
Retirement Contributions
Employer Matching Retirement
Contributions
$______________
$______________
$______________
$___62,000____
Annual Deductions & Expenses:
Total Deductions & Expenses
$______________
$__18,600______
$__3,720_______
$__22,320______
Total Deductions & Expenses Due
School
Available Funds/Income Less Total
Deductions & Expenses Due School
$______________
$______________
$______________
$______________
$______________
$____930______
Monthly Funds Available for Saving
and Spending
$______________
*Graduate = Has graduated and received degree or will do so in less than 12 months. If amounts
*Student = Will continue in school with more than 12 months before receiving graduation and receipt of
are unknown than use your best estimate; estimating high for expenses and low for
degree.
income.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
A Completed 5-Step Financial Worksheet is
REQUIRED to Develop a Personalized Debt Evaluation and Financial Plan
Step 4. Monthly “Must Committed Have” Expenses
Rent/Mortgage
Insurance Premiums
Car Payments & Related Expenses*
Utilities
Basic Food Needs/Groceries (Dine-In)
Student Loan Payments That Are Not
Deferred/Postponed
Child Care
Child Support and/or Alimony Payments
Ongoing Contractual Obligations (i.e.
credit cards, medical bills)
Other
Total
$____
$____
$____
$____
$____
Step 4. Monthly “Selected Wants” Expenses
0_______
0_______
0_______
0_______
0_______
$___686_______
$____ 0_______
$____ 0_______
$_____65______
$____ 0_______
$____751______
Cable TV/Internet
Nonessential Food Purchases
Car Payments & Related Expenses*
Utilities
Dining Out
Child Care/Babysitting
Personal Care
Cell Phone
Entertainment/Recreation
Presents/Gifts
Travel/Vacation
Subscriptions/Memberships
Other
Total
$____ 0_______
$_____________
$___100_______
$_____________
$_____50______
$_____________
$_____________
$_____________
$_____50______
$_____________
$_____25______
$_____________
$_____________
$___225_______
*Car Payments and Related Expense is a “Must Have” expense only if public/alternative transportation is not a viable, lower cost, reasonable and safe option. Otherwise it
is a “Selected Want”. Automobile ownership for the purpose of status, convenience or perceived freedom is not considered a “Must Have Committed Expense”.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part,
without written permission.
NET WORTH - Assets less Liabilities
Assets
House
Furnishing
Jewelry
Clothes
Auto
Equipment
Books
Appliances
Collectibles
Musical Instrument
Real Estate
Fed Loan
Pri Loans
Credit
Other
TOTAL
Liabilities
All That I Own/$ Value
$
$
1,200.00
$
500.00
$
2,000.00
$
$
$
$
$
$
$
$
$
$
$
$
$
3,700.00
NET WORTH
Value All That I Owe/Balance
$
$
$
$
$
$
$
$
$
$
$
$
121,118
$
88,967
$
1,100
$
$
$
211,185
($ 207,485)
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in
part, without written permission.
A Completed 5-Step Financial Worksheet is
REQUIRED to Develop a Personalized Debt Evaluation and Financial Plan
Step 4. Monthly Saving/Investing
Step 5. Credit Status & History
Non-Deductible & Deductible
Retirement Contributions (IRA, ROTH
IRA, SEP, etc.)
•
•
Savings (Insured Saving Account, CDs,
Money Market Account, etc.)
Investments (Stocks, Bonds,
Mutual Funds & Other Securities)
College Savings Accounts
Payments in Excess of Monthly
Minimums to Lower High Interest
Debt
Irregular Expenses (Auto, Medical,
Home Repairs, Maintenance
Spare of the Moment/Just Because
Other
Total
$___214_______
•
$___500_______
•
$_____0_______
$_____0_______
$_____0_______
$_____0_______
$____20_______
$_____0_______
$____734______
If known, what is your credit score? 705
Have you been 30, 60 or 90 days late on any loan payment? Yes_
No X If yes when?
Have you ever defaulted on a loan, been a party to foreclosure or
bankruptcy? Yes_ No X If yes when?
Have you reviewed a copy of your free annual credit report for
accuracy within the last four months? Yes X No_
CONGRATUALTIONS,
THAT’S IT, YOU’RE DONE!!!!
You now have an organized comprehensive record of your
finances which puts you ahead of most people and
provides the basis for you to make informed decisions
about your finances and goals.
Be sure to secure this information and bring it with you to
the Personalized Group Financial Literacy and Planning
Workshop.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
REPAYMENT CALCULATORS
FEDERAL STUDENT AID REPAYMENT COMPARISON CALCULATOR
http://studentaid.ed.gov/repay-loans/understand/plans/standard/comparison-calculator
FEDERAL DIRECT CONSOLIDATION LOANS – ONLINE CALCULATOR
https://loanconsolidation.ed.gov/loancalc/servlet/common.mvc.Controller?controller_task
=startCalculator
FEDERAL STUDENT AID INCOME-BASED REPAYMENT CACULATOR
http://studentaid.ed.gov/repay-loans/understand/plans/income-based/calculator
BANKRATE.COM LOAN CALCULATOR AND AMORTIZATION
http://www.bankrate.com/calculators/mortgages/loan-calculator.aspx
Federal Student Loan
Lender Name
Student Loan
1,2,3 New Federal Consolidation or Direct
Consolidation Consolidation Loans
4 US Dept of Federal Subsidized and Unsubsidized
Ed
Stafford Loans
5 US Dept of Federal Subsidized and Unsubsidized
Ed
Stafford Loans
6 US Dept of Federal Subsidized and Unsubsidized
Ed
Stafford Loans
7 US Dept of Federal Subsidized and Unsubsidized
Ed
Stafford Loans
8 US Dept of Federal Subsidized and Unsubsidized
Ed
Stafford Loans
9 US Dept of Federal Subsidized and Unsubsidized
Ed
Stafford Loans
10 US Dept of Federal Subsidized and Unsubsidized
Ed
Stafford Loans
11 US Dept of
Federal Graduate PLUS Loans
Ed
12 US Dept of Federal Subsidized and Unsubsidized
Ed
Stafford Loans
13 US Dept of Federal Subsidized and
Ed
Unsubsidized Stafford Loans
14 US Dept of
Federal Direct Graduate PLUS Loans
Ed
15 US Dept of Federal Direct Subsidized and
Ed
Unsubsidized Stafford/Ford Loans
16 US Dept of Federal Direct Subsidized and
Ed
Unsubsidized Stafford/Ford Loans
Subtotals
Loan Balance
Interest Rate
$ 11,625
5.750 %
$ 2,750
6.0 %
$ 1,000
6.8 %
$ 5,750
6.8 %
$ 4,000
6.8 %
$ 7,000
6.8 %
$ 12,000
6.8 %
$ 8,500
6.8 %
$ 17,303
8.5 %
$ 8,500
6.8 %
$ 12,000
6.8 %
$ 21,560
7.9 %
$ 8,500
6.8 %
$ 700
6.8 %
$ 121,188
Federal Loans Affordability Assessment
Repayment Options Calculations
Standard Plan
Monthly Payment
Total
Interest
Interest
Rate
$ 97
$ 31/ $50*
$ 12/ $50*
$ 66
$ 46/ $50*
$ 81
$ 138
$ 98
$ 215
$ 98
$ 138
$ 260
$ 98
$ 5,751
$ 914
$ 381
$ 2,191
$ 1,524
$ 2,667
$ 4,572
$ 3,238
$ 8,441
$ 3,238
$ 4,572
$ 9,693
$ 3,238
5.750 %
6.0 %
6.8 %
6.8 %
6.8 %
6.8 %
6.8 %
6.8 %
8.5 %
6.8 %
6.8 %
7.9 %
6.8 %
$ 8/ $50*
$ 267
6.8 %
$ 1,384 / $1,488
$ 50,686
* Minimum payments $50/month. Numbers may vary slightly due to rounding.
Repayment Plan
# Years
15
10
10
10
10
10
10
10
10
10
10
10
10
Years
Years
Years
Years
Years
Years
Years
Years
Years
Years
Years
Years
Years
10 Years
Federal Loans Affordability Assessment
Repayment Options Calculations
Extended Repayment
Monthly
Payment
Total Interest
Interest
Rate
$ 97
$ 18/ $50*
$ 7/ $50*
$ 40/ $50*
$ 28/ $50*
$ 49/ $50*
$ 83
$ 59
$ 139
$ 59
$ 83
$ 165
$ 59
$ 5/ $50*
$ 5,751
$ 2,565
$ 1,082
$ 6,223
$ 4,329
$ 7,576
$ 12,987
$ 9,199
$ 24,496
$ 9,199
$ 12,987
$ 27,933
$ 9,199
$ 758
5.750 %
6.0 %
6.8 %
6.8 %
6.8 %
6.8 %
6.8 %
6.8 %
8.5 %
6.8 %
6.8 %
7.9 %
6.8 %
6.8 %
$ 891/ $1044*
$ 134,284
* Minimum payments $50/month. Numbers may vary slightly due to rounding.
Repayment Plan
# Years
15
25
25
25
25
25
25
25
25
25
25
25
25
25
Years
Years
Years
Years
Years
Years
Years
Years
Years
Years
Years
Years
Years
Years
25 Years
Federal Loans Affordability Assessment
Repayment Options Calculations
Combined Consolidation
Monthly
Payment
Total Interest
$ 816
$ 172,740
Repayment Plan # Years/
Interest Rate
30 Years
7.125%
MEDebt Solutions
Loan Repayment Budget Stress/Manageability
Assessment (BSMA)
Student loan payments are considered manageable when kept to no
more than 12% of Gross Monthly Income and preferably below 10%
of Gross Monthly Income.
FEDERAL LOANS ONLY
Gross Annual Income - $62,000
Gross Monthly Income - $5,167
Standard Plan (10-yrs)
Extended Repayment (25-yrs)
Consolidation (30-yrs)
$ 1,488
$ 1,044
$ 816
BSMA – 28.80%
BSMA – 20.20%
BSMA – 15.80%
IBR REPAYMENT CALCULATOR
FEDERAL STUDENT AID INCOME-BASED REPAYMENT CACULATOR
http://studentaid.ed.gov/repay-loans/understand/plans/income-based/calculator
Income-Based Calculator Results
Based upon gross income of $62,000 and Adjusted Gross Income of $52,600.
Your Information
Estimated Total Adjusted
Gross Income:
$52,600
Your Estimated Total
Student Loans:
$121,188
Your Estimated Average
Interest Rate On Your
Student:
7.125%
Where You Live:
Family Size:
Outside of Alaska
and Hawaii
1
Your Results
According to the information you provided, it appears
that you are eligible for the Income-Based Repayment
plan with a monthly payment amount of approximately
$448.
Some Important Notes Regarding IncomeBased Repayment:
•INTEREST PAYMENT BENEFIT — If your monthly IBR payment amount does not cover the
interest that accrues on your loans each month, the government will pay your unpaid
accrued interest on your Subsidized Stafford Loans (either Direct Loan or FFEL) for up to
three consecutive years from the date you began repaying your loans under IBR.
•25-YEAR CANCELLATION — If you repay under the IBR plan for 25 years and meet
certain other requirements, any remaining balance will be canceled.
10-YEAR PUBLIC SERVICE LOAN FORGIVENESS — If you work in public service, on-time,
full monthly payments you make under IBR (or certain other repayment plans) while
employed full-time in a public service job will count toward the 120 monthly payments
that are required to receive loan forgiveness through the Public Service Loan Forgiveness
Program. Through this program, you may be eligible to have the remaining balance of
your Direct Loans forgiven after you have made the 120 qualifying as described above.
The Public Service Loan Forgiveness Program is available only for Direct Loans. If you
have FFEL loans, you may be eligible to consolidate them into the Direct Loan Program to
take advantage of the Public Service Loan Forgiveness Program. However, only the ontime, full monthly payments made under IBR or certain other repayment plans while you
are a Direct Loan borrower will count toward the required 120 monthly payments. For
more information about this program, review the Department’s Public Service Loan
Forgiveness Program Fact Sheet - http://studentaid.ed.gov/sites/default/files/public-service-loanforgiveness.pdf
IBR Example - Assumptions
ASSUMPTIONS: All income and expenses remain the same for
25 years. This assumption is unrealistic but is shown to
demonstrate possible early career options to make student loan
payments more manageable and permit the start of a
savings/investment program immediately upon the receipt of the
first paycheck. Starting a saving/plan early on so as to allow and
maximize the power of compounding to take effect is the most
important personal financial move one can make.
For more information on IBR and the Fed’s IBR Calculator
visit www.studentaid.ed.gov - http://www.studentaid.ed.gov/ - or call 1800-4-FED-AID. You can also learn more about other student loan
repayment options and find advice on paying loans off more quickly
using the Consumer Finance Protection Bureau's http://www.consumerfinance.gov/students/repay/
Private Student Loans
Lender Name *
Loan
Amount *
Interest Rate
(%) *
Sallie Mae 1
27000
5.50
Var
20
Sallie Mae 2
24830
4.00
Var
15
Sallie Mae 3
25000
5.25
Var
15
Sallie Mae 4
11250
Total
8.25
$88,967
* Minimum payments $50/month. Numbers may vary slightly due to rounding.
Interest
Type
Var
Repayment #
of Years
15
PRIVATE LOAN AFFORDABILITY ASSESSMENT CALCULATION
Lender
Name
1 Sallie
Mae Excel
2 Sallie
Mae
Signature
3 Sallie
Mae
Signature
4 Sallie
Mae
Signature
Loan
Amount
Standard Plan
Monthly
Total
Payment
Interest
Repayment Interest
Plan #
Rate (%)
Years
$27,887
$ 192
$ 18,152.47
20 Years
5.50
$24,830
$ 184
$ 8,229.61
15 Years
4.00
$25,000
$ 201
$ 11,174.50
15 Years
5.25
$11,250
$ 109
$ 8,395.34
15 Years
8.25
$88,967
$ 686
$ 45,951.92
Combined Consolidation
Lender
Name
Loan
Amount
Monthly
Payment
$ 711
Total
Repayment
Interest
Interest Plan # Years Rate (%)
$166,897.03 30 Years
Private loan rate based upon credit history/score of borrower and co-signer.
•Continuous variable rate highly unlikely.
•Credit based rate assumed at 7.0% - availability unlikely.
•Numbers may vary slightly due to rounding.
7%
MEDebt Solutions
Loan Repayment Budget Stress/Manageability
Assessment (BSMA)
Student loan payments are considered manageable when kept to
no more than 12% of Gross Monthly Income and preferably below
10% of Gross Monthly Income.
PRIVATE LOANS ONLY
Gross Annual Income - $62,000
Gross Monthly Income - $5,167
Standard Plan:
Years 1 – 15
Years 16 – 20
$
$
686
192
BSMA – 13.28%
BSMA – 3.72%
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
MEDebt Solutions
Loan Repayment Budget Stress/Manageability Assessment (BSMA)
Student loan payments are considered manageable when kept to
no more than 12% of Gross Monthly Income and preferably
below 10% of Gross Monthly Income.
FEDERAL & PRIVATE* LOANS COMBINED
Gross Annual Income - $62,000
Gross Monthly Income - $5,167
Standard Plan (Fed + Private)
Years 1 – 10
Years 11 – 15
Years 16 – 20
$
$
$
Fed Extended & Pri Standard
Year
1 – 15
Year 16 - 20
Years 21 – 25
$ 1,730 BSMA – 33.48%
$ 1,236 BSMA – 23.92%
$ 1,044 BSMA – 20.20%
Fed Consolidation & Pri Standard
Year
1 – 15
Year 16 - 20
Years 21 – 30
2,174 BSMA – 42.07%
686 BSMA – 13.28%
192 BSMA – 3.72%
$ 1,502 BSMA – 29.07%
$ 1,008 BSMA – 19.51%
$ 816 BSMA – 15.79%
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
MEDebt Solutions
Loan Repayment Budget Stress/Manageability Assessment (BSMA)
Student loan payments are considered manageable when kept to no more than 12%
of Gross Monthly Income and preferably below 10% of Gross Monthly Income.
Gross Annual Income - $62,000
Gross Monthly Income - $5,167
IBR SCENARIOS
$62,000 Income – Individual Federal Tax Return – AGI $52,600 – IBR Payment $448
Federal Loans Only
Federal IBR 25-yrs (AGI $52,600)
$ 448
BSMA - 8.67%
Federal & Private Loans
Federal IBR 25-yrs (AGI $52,600) + Private Standard 15 - 20-yr:
Years 1 – 15
Years 16 – 20
Years 21– 25
$ 1,134
$ 640
$ 448
BSMA – 21.95%
BSMA – 12.39%
BSMA – 8.67%
Note: Private loans are Variable Rate. These BSMA calculations assume a continuous variable rate which is highly unlikely over the projected period.
Borrower must monitor situation carefully and be sure to have funds available to meet the required payments or pay off the loan as the rates change.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
Federal Loans Repayment Options Stress Test *
Lender Name
Student Loan
Loan Balance
Direct
Federal Direct
Consolidation Loans
Direct
Interest
Rate
Based on a $62,000 annual gross salary.
$ 11,625
5.750 %
Federal FFELP
Stafford Loans
$ 2,750
6.0%
Direct
Federal FFELP
Stafford Loans
$ 67,950
6.8 %
Direct
Federal Grad
PLUS Loans
$ 17,303
8.5 %
Direct
Federal Grad
PLUS Loans
$ 21.560
7.9 %
Standard Plan
$ 121,188
Subtotals
Monthly
Payment
Total Interest
Interest
Rate
$ 1,488
$ 50,686
5.75 –
8.5%
Repayment Plan
# Years
10
*28.80%
Combined Consolidation
Extended Repayment
Monthly
Payment
$ 1,044
*20.20%
Total Interest
$ 134,284
Interest
Rate
5.75 –
8.5%
Repayment
Plan # Years
25
Monthly Payment
Total Interest
$ 816
$ 172,740
Repayment Plan # Years
30 Years
*15.79%
Income Based Repayment - $52,600 AGI – Single – Family Size - 1
Monthly Payment
Total Interest Forgiven
Repayment Plan #
Years
$ 442
$ 145,827
10 Years
7.125%
*8.55%
$ 120,107
25 Years
7.125%
*Student loan payments are considered manageable when kept to no more than 12% of gross monthly income.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
7.125%
0
62,000
Budget Planner For Graduates
Budget Planner For Graduates
Available Funds/Income – Annual (12-months)
Amount
Salary (Gross Before Deductions)
Cash/Savings (Cash/Savings of $6500 deliberately left to serve as a
financial cushion/margin)
Investments
All Other Sources
Total Gross Annual Income:
$ 62,000
Deductions & Expenses - Annual
Amount
Deductions (Federal, State, Local Taxes, Social Security, Medicare,
Health, Others
$18,600
25% 30%
Enter Percentage
Retirement Contributions
$ 3,720
Total Deductions : $ 22,320
Employer Matching Contributions** :
$ 930
Available Annual Funds/Income Less Total Deductions $ 39,680
Monthly Funds Available for Saving, Investing & Spending $ 3,307
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
Budget Planner For Graduates
MONTHLY MUST HAVE COMMITTED EXPENSES
Rent/Mortgage
0
Medical/health Insurance
0
Dental Insurance
0
Life Insurance
0
Personal Disability Insurance
0
Car Payments and Related Expenses*
0
Utilities
0
Basic Food Needs/Groceries (Dine-In)
0
Taxes (property & other)
0
Student Loan Payments (Private)
686
Child Care
0
Child Support and/or Alimony Payments
0
Ongoing Contractual Obligations (i.e. credit
cards, medical bills)
Charitable Giving/Philanthropy
65
0
$ 751
Subtotal
MEDebt Budget Financial Responsibility Affordability Stress Test Score: 22.71%
Below 35.00% for Monthly Committed Expenses is
OUTSTANDING
Note: Student loan payments are for Private Student Loans only. Federal Student Loans are considered in forbearance.
This Affordability Stress Test Score is made possible by living at home and not incurring major living expenses such as rent.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
Budget Planner For Graduates
MONTHLY SELECTED WANTS
Cable TV/Internet
$ 0
Nonessential Food Purchases
$ 0
Car Payments and Related Expenses*
$100
Dining Out
$ 50
Childcare/Babysitters
$ 0
Personal Care
$ 0
Cell Phone
$ 0
Entertainment/Recreation
$ 50
Presents/Gifts
$ 0
Vacations/Travel
$ 25
Magazine Subscriptions
$ 0
Other
$ 0
Subtotal
$ 225
MEDebt Budget Financial Responsibility Affordabilty Stress Test Score: 6.80%
Below 15.00% for Monthly Selected Wants is 6.80
OUTSTANDING
Note: Nothing was entered for professional certification/education/membership. Again, this Affordability Stress Test Score is made possible
by living at home and not incurring major living expenses such as rent.
*Car Payments and Related Expenses is a "Must Have" expense only if public/alternative transportation is not a viable, lower cost,
reasonable, safe option. Otherwise it is a "Selected Want." Automobile ownership for the purpose of status, convenience or perceived
freedom is not considered "Must Have Committed Expenses."
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
Budget Planner For Graduates
MONTHLY SAVINGS/INVESTMENT GOALS
Non-Deductible and Deductible Retirement Contributions
$ 214
Emergency Fund Savings
$ 500
Taxes for Loan Forgiveness
$
0
Kid's College Savings
$
0
Saving/Equity Investments
$
0
Payment In Excess Of Monthly Minimums To Lower High
Interest Debt
$
0
Irregular Expenses (Auto, Medical, Home Repair,
Maintenance)
$
0
Spare of the Moment/ Just Because
$ 20
Subtotal
$ 734
MEDebt Budget Financial Responsibility Affordability Stress Test Score: 22.20%
20.00% or higher for Monthly Savings/Investment Goals is considered
OUTSTANDING
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
Budget Planner For Graduates
Monthly Loan Payment Details
Interest
Rate (%)
Monthly
Payment
Amounts
Car Payment
0
Credit Card 1
19.99
Credit Card 2
0
$
0
Other Loans
0
$
0
Other Loans
0
$
0
Subtotal
$
0
$ 65
$ 65
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
Budget Planner For Graduates
Budget Summary
Monthly Funds Available for Saving,
Investing & Spending
$ 3,307
Total Monthly Expenses
$ 1,710
Difference - Surplus/(Deficit)
$ 1,597
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
Budget Planner For Graduates
Budget Summary
Committed Expenses
(40% - 60% of Monthly
Funds Available for Saving,
Investing & Spending)
OUTSTANDING
22.71%
Selected Wants (10% 30% of Monthly Funds
Available for Saving,
Investing & Spending)
OUTSTANDING
6.80%
Savings/Investments
(10% -20% of Monthly
Funds Available for Saving,
Investing & Spending)
OUTSTANDING
22.20 %
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
Budget Planner For Graduates
Each individual can and should decide how they wish to divide up their
Monthly Committed Expenses and Monthly Selected Wants. Decide
how to allocate your income by percentages and then work out the
details. The key to financial success, economical security and goal
achievement is the long term consistent commitment to
saving/investing 15% - 20% of income.
The remaining 80% - 85% can be used as you see fit as long as it
does not involve carrying credit card balances/deficit spending, the
accumulation of additional consumer debt especially the accumulation
of high interest, unmanageable and/or over-leveraged "bad" debt for
depreciating or over-priced goods, services or products.
The key to financial success and goal achievement is being financially
informed and responsible with an affordable debt and money
management strategy and plan in place for simultaneous debt
management/repayment and building financial assets through saving
and investing. Maintaining and strengthening credit history and credit
scores is also a priority.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
MEDebt Solutions – Budget Stress Manageability Assessment &
Affordability Metrics / Rules of Thumb:
• Student loan payments are considered manageable when
kept to no more than 12% of Gross Monthly Income and
preferably no more than 10%:
Below 4%
5% - 7%
8% - 10%
11% - 12%
13% or >
Outstanding
Great Shape
OK / Good
Borderline
Caution - RED FLAG
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
MEDebt Solutions – Budget Stress Manageability Assessment &
Affordability Metrics / Rules of Thumb:
• Home debt, mortgage payments, property taxes,
homeowner’s insurance and other home- related cost should
be kept to no more than 28% and under some higher cost of
living situations 31% - 35% of Gross Income:
Below 20%
20% - 25%
26% - 28%
29% - 31%
32% or >
Outstanding
Great Shape
OK / Good
Borderline
Caution - RED FLAG
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
MEDebt Solutions – Budget Stress Manageability Assessment &
Affordability Metrics / Rules of Thumb:
• Total debt obligations including home debt, credit card debt,
auto loans and any other money owed should not climb
above 36% and under some higher cost of living situations
up to 43% of Gross Income:
Below 28%
29% - 33%
34% - 39%
40% - 43%
44% or >
Outstanding
Great Shape
OK / Good
Borderline
Caution - RED FLAG
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
MEDebt Solutions – Budget Stress Manageability Assessment &
Affordability Metrics / Rules of Thumb:
• MONTHLY COMMITTED EXPENSE
(40% - 60% of Net Monthly Income):
Below 35%
36% - 40%
41% - 50%
51% - 60%
61% +
Outstanding
Great Shape
OK / Good
Borderline
Caution – RED FLAG
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
MEDebt Solutions – Budget Stress Manageability Assessment &
Affordability Metrics / Rules of Thumb:
• MONTHLY SELECTED WANTS
(10% - 30% of Net Monthly Income):
Below 15%
16% - 20%
21% - 25%
26% - 30%
31% +
Outstanding
Great Shape
OK / Good
Borderline
Caution – RED FLAG
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
MEDebt Solutions – Budget Stress Manageability Assessment &
Affordability Metrics / Rules of Thumb:
• MONTHLY SAVINGS/INVESTMENT GOALS
(10% – 20% of Net Monthly Income):
20% +
15% - 19%
10% - 14%
5% - 9%
Minus 0% - 4%
Outstanding
Great
OK / Good
Borderline
Caution – RED FLAG
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
MEDebt Solutions
Debt Manageability & Affordability Index Scale:
Based upon the information submitted, MEDebt Solutions
applies the following criteria in determining the status of
debt manageability, affordability and compatibility with
goals:
1. Outstanding - All Budget Income and Expense
Benchmarks: Committed Expenses, Selected Wants and
Savings/Investments Goals meet the highest MEDebt
Solutions Financial Affordability and Strength benchmarks
and financial strength criteria for Outstanding.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
MEDebt Solutions
Debt Manageability & Affordability Index Scale:
Based upon the information submitted, MEDebt Solutions
applies the following criteria in determining the status of
debt manageability, affordability and compatibility with
goals:
2. Great Shape - All Budget Income and Expense
Benchmarks: Committed Expenses, Selected Wants and
Savings/Investments Goals meet the MEDebt Solutions
Financial Affordability and Strength benchmarks and
financial strength criteria for Great Shape or Outstanding.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
MEDebt Solutions
Debt Manageability & Affordability Index Scale:
Based upon the information submitted, MEDebt Solutions
applies the following criteria in determining the status of
debt manageability, affordability and compatibility with
goals:
3. OK / Good - Most Budget Income and Expense
Benchmarks: Committed Expenses, Selected Wants and
Savings/Investments Goals meet the MEDebt Solutions
Financial Affordability and Strength benchmarks and
financial strength criteria for OK / Good or better with no
more than one Borderline or Caution – RED FLAG.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
MEDebt Solutions
Debt Manageability & Affordability Index Scale:
Based upon the information submitted, MEDebt Solutions
applies the following criteria in determining the status of
debt manageability, affordability and compatibility with
goals:
4. Borderline - The Budget Income and Expense
Benchmarks: Committed Expenses, Selected Wants and
Savings/Investments Goals do not meet the MEDebt
Solutions Financial Affordability and Strength benchmarks
and financial strength criteria for OK / Good or better with
sufficient net surplus to improve any Caution – RED FLAGS
to at least a Borderline status.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
MEDebt Solutions
Debt Manageability & Affordability Index Scale:
Based upon the information submitted, MEDebt Solutions
applies the following criteria in determining the status of
debt manageability, affordability and compatibility with
goals:
5. Caution – RED FLAG - The Budget Income and
Expense Benchmarks: Committed Expenses, Selected
Wants and Savings/Investments Goals does not meet the
MEDebt Solutions Financial Affordability and Strength
benchmarks and financial strength criteria for Borderline
or better and are without sufficient net surplus to improve
the Caution – RED FLAGS to at least a Borderline status.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
MEDebt Solutions
Debt Manageability & Affordability Index Scale:
The overall Debt Manageability Score on the MEDebt
Solutions Index Scale of Debt Manageability, Affordability
and Compatibility with Goals for this example is:
1 – OUTSTANDING
WITH A MONTHLY SURPLUS OF INCOME OVER EXPENSES OF
$1,597 TOTALING $19,164 ANNUALLY.
THIS 1 - OUTSTANDING SCORE IS ACCURATE BUT MISLEADING
WITH CAVEATS. THE SURPLUS DOES NOT REFLECT THE
FINANCIAL IMPACT OF MAKING FEDERAL STUDENT LOAN
PAYMENTS.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
MEDebt Solutions
Debt Manageability & Affordability Index Scale:
USING THE STANDARD 10-YEAR PAYMENT OPTION WOULD
RAISE COMMITED EXPENSES TO $2,239 PER MONTH MAKING
THE BUDGET FINANCIAL RESPONSIBILITY AFFORDABILITY
STRESS TEST SCORE:
67.70% – 5 - CAUTION / RED FLAG.
THIS WOULD REDUCE THE MONTHLY SURPLUS TO $109 OR JUST
$1,308 ANNUALLY. THIS WOULD CHANGE THE OVERALL DEBT
MANAGEABILITY SCORE TO:
3 - OK / GOOD.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
MEDebt Solutions
Debt Manageability & Affordability Index Scale:
USING THE CONSOLIDATION 30-YEAR PAYMENT OPTION WOULD
RAISE COMMITED EXPENSES TO $1,567 PER MONTH MAKING
THE BUDGET FINANCIAL RESPONSIBILITY AFFORDABILITY
STRESS TEST SCORE:
47.38% – 3 - OK / GOOD.
THIS WOULD REDUCE THE MONTHLY SURPLUS TO $781 OR
$9,372 ANNUALLY. THIS WOULD CHANGE THE OVERALL DEBT
MANAGEABILITY SCORE TO:
3 - OK /GOOD.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
MEDebt Solutions
Debt Manageability & Affordability Index Scale:
USING THE EXTENDED 25-YEAR FEDERAL PAYMENT OPTION
MONTHLY COMMITTED EXPENSES WOULD RAISE TO $1,795
PER MONTH MAKING THE BUDGET FINANCIAL
RESPONSIBILITY AFFORDABILITY STRESS TEST SCORE:
54.28% – 4 - BORDERLINE.
THIS WOULD REDUCE THE MONTHLY SURPLUS TO $553 OR
$6,636 ANNUALLY. THIS WOULD CHANGE THE OVERALL DEBT
MANAGEABILITY SCORE TO:
3 - OK / GOOD.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
MEDebt Solutions
Debt Manageability & Affordability Index Scale:
USING THE CALCULATED IBR OPTION MONTHLY COMMITTED
EXPENSES WOULD RAISE COMMITTED EXPENSES TO $1,199
PER MONTH MAKING THE BUDGET FINANCIAL
RESPONSIBILITY AFFORDABILITY STRESS TEST SCORE:
36.26% – 1 - GREAT SHAPE.
THIS WOULD REDUCE THE MONTHLY SURPLUS TO $1,149 OR
$13,788 ANNUALLY. THIS WOULD CHANGE THE OVERALL
DEBT MANAGEABILITY SCORE TO:
2 - GREAT SHAPE, ONE NOTCH BELOW 1 -OUTSTANDING.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
Monthly deposit of $1,149 per year with an interest rate of 3.00%
compounded monthly with an initial starting balance of $1.00
Year
•
•
•
•
•
•
•
•
•
•
•
•
1
2
3
4
5
6
7
8
9
10
11
12
Balance
$ 13,980.20
$ 28,384.60
$ 43,227.12
$ 58,521.09
$ 74,280.23
$ 90,518.71
$107,251.10
$124,492.42
$142,258.15
$160,564.24
$179,427.13
$198,863.75
Year
•
•
•
•
•
•
•
•
•
•
•
•
•
13
14
15
16
17
18
19
20
21
22
23
24
25
Final Savings Balance: $512,465.10
Balance
$218,891.56
$239,528.52
$260,793.19
$282,704.64
$305,282.54
$328,547.18
$352,519.43
$377,220.82
$402,673.52
$428,900.40
$455,924.99
$483,771.56
$512,465.10
MEDebt Solutions
Debt Manageability & Affordability Index Scale:
IT IS VERY IMPORTANT TO RECOGNIZE THAT THE MANAGEABLE
ASSESSMENTS ARE DUE MAINLY TO THE FACT OF THE ABILITY
TO SUBSTANTAILLY REDUCE LIVING EXPENSES BY LIVING AT
HOME.
FOR EXAMPLE IF IN ADDITION TO THE FEDERAL STUDENT LOAN
PAYMENTS YOU WERE TO ADD $500 A MONTH FOR RENT, $50
PER MONTH FOR UNILITIES, $50 PER MONTH FOR AUTO
INSURANCE AND $200 PER MONTH FOR FOOD; ALL VERY
MODEST FIGURES BUT NECESSARY EXPENSES IF NOT LIVING AT
HOME FOR A TOTAL OF $800 YOUR BUDGET AFFORDABILITY
DYNAMICS WOULD BE AS FOLLOWS:
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
MEDebt Solutions
Debt Manageability & Affordability Index Scale:
USING THE STANDARD 10-YEAR PAYMENT OPTION, MONTHLY
COMMITED EXPENSES WOULD RAISE TO $3,039. MAKING THE
BUDGET FINANCIAL RESPONSIBILITY AFFORDABILITY STRESS
TEST SCORE:
91.90% – 5 - CAUTION / RED FLAG.
THIS WOULD CREATE A $961 MONTHLY DEFICIT $11,532
ANNUALLY AND CHANGE THE OVERALL DEBT MANAGEABILITY
SCORE TO:
6 - DANGER/DISASTER WHICH IS BEYOND 5 - CAUTION / RED
FLAG AND UNSUSTANABLE.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
MEDebt Solutions
Debt Manageability & Affordability Index Scale:
USING THE CONSOLIDATION 30-YEAR PAYMENT OPTION WOULD
RAISE COMMITED EXPENSES TO $2,367 PER MONTH MAKING
THE BUDGET FINANCIAL RESPONSIBILITY AFFORDABILITY
STRESS TEST SCORE:
71.57% – 5 - CAUTION / RED FLAG.
THIS WOULD CHANGE THE MONTHLY SURPLUS TO A MONTHY
DEFICIT OF $9 OR $108 ANNUALLY.
THIS WOULD CHANGE THE OVERALL DEBT MANAGEABILITY
SCORE TO:
5 - CAUTION / RED FLAG.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
MEDebt Solutions
Debt Manageability & Affordability Index Scale:
USING THE EXTENDED 25-YEAR FEDERAL PAYMENT OPTION
MONTHLY COMMITTED EXPENSES WOULD RAISE TO $2,595
PER MONTH MAKING THE BUDGET FINANCIAL
RESPONSIBILITY AFFORDABILITY STRESS TEST SCORE:
78.47% –5 - CAUTION / RED FLAG.
THIS WOULD CHANGE THE MONTHLY SURPLUS TO A MONTHY
DEFICIT OF $247 OR $2,964 ANNUALLY. THIS WOULD CHANGE
THE OVERALL DEBT MANAGEABILITY SCORE TO:
5 - CAUTION / RED FLAG.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
MEDebt Solutions
Debt Manageability & Affordability Index Scale:
USING THE CALCULATED IBR OPTION MONTHLY COMMITTED
EXPENSES WOULD RAISE TO $1,999 PER MONTH MAKING THE
BUDGET FINANCIAL RESPONSIBILITY AFFORDABILITY STRESS
TEST SCORE:
60.45% – 5 - CAUTION / RED FLAG.
THIS WOULD REDUCE THE MONTHLY SURPLUS TO $349 OR
$4,188 ANNUALLY. THIS WOULD CHANGE THE OVERALL DEBT
MANAGEABILITY SCORE TO:
4 - BORDERLINE.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
Monthly deposit of $349 per year with an interest rate of 3.00%
compounded monthly with an initial starting balance of $1.00
Year
•
•
•
•
•
•
•
•
•
•
•
•
1
2
3
4
5
6
7
8
9
10
11
12
Balance
$ 4,247.10
$ 8,622.35
$ 13,130.67
$ 17,776.12
$ 22,562.86
$ 27,495.20
$ 32,577.56
$ 37,814.51
$ 43,210.74
$ 48,771.10
$ 54,500.59
$ 60,404.35
Year
•
•
•
•
•
•
•
•
•
•
•
•
•
13
14
15
16
17
18
19
20
21
22
23
24
25
Final Savings Balance: $155,658.85
Balance
$ 66,487.67
$ 72,756.02
$ 79,215.04
$ 85,870.50
$ 92,728.41
$ 99,794.90
$107,076.32
$114,579.22
$122,310.32
$130,276.58
$138,485.13
$146,943.35
$155,658.85
MEDebt Solutions
Debt Manageability & Affordability Index Scale:
THE CHOICE TO LIVE AT HOME WAS A VERY
ASTUTE AND FINANCIALLY SAVVY LIFESTYLE
ADJUSTMENT WHICH WILL REAPT ENORMOUS
FINANCIAL BENEFITS.
PLEASE KEEP IN MIND THAT ANY CHANGES TO EXPENSES OR INCOME SHOULD BE
EVALUATED AND ASSESSED USING THIS BASE LINE ANALYSIS
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
Key to financial success and goal achievement
The key to financial success and goal achievement
is being financially informed and responsible with
an affordable debt and money management
strategy and a plan in place for simultaneous debt
management /repayment and building financial
assets (Net Worth) through saving and investing.
Maintaining and strengthening credit history and
credit scores is also a priority.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
Every Student is Unique When it Comes to
Affordability Rules of Thumb Index
• Each individual can and should decide how they wish to divide
up their Monthly Committed Expenses and Monthly Selected
Wants. Decide how to allocate your available funds (income
Less Total Deductions & Expenses Due the School) by
percentages and then work out the details. It is critically
important that you borrow as little as possible, do not run a
deficit and have at least a $500 cushion as an emergency fund.
• The key to student financial success and goal achievement is
being financially informed and responsible with an affordable
debt and money management strategy and plan in place for
simultaneous debt repayment and building financial assets (net
worth) through saving and investing. Maintaining and
strengthening credit history and credit scores is also a priority.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
Some Random Notes, Tips, Facts & Forethoughts
• Keep a spending journal to accurately track
your expense for at least two weeks and
preferably a month at least once a year and
then make appropriate adjustments to your
budget so as to be fully aware of where, why
and how you spend money.
• Keep your living expenses at a minimum –
LBYM – (Live Below Your Means).
Some Random Notes, Tips, Facts & Forethoughts
• SAVE!!! Saving is a fundamental principle in building a stable and
secure financial life. Start with a goal of saving 5 – 9% of your
household income; 14% in 2-years; 15 – 19% within 4-years and
20% within 6-years.
• Do everything possible to adjust your budget in an effort to
establish saving/investments as a high priority. Remember your
emergency fund should equal 9 – 12 months of basis expenses in a
fairly secure employment environment.
• An emergency fund is part of the 20% of household income goal
that goes to savings/investments of various kinds which based upon
your needs and goals.
• Emergency fund money should be kept in a federally insured
account with at least the first two months of emergency funds in
cash or cash equivalent accounts for quick access. The balance can
be placed in other low risk with higher rates insured investments
like CD’s that mature in a latter fashion in 3, 6 and 12-months
intervals.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
Some Random Notes, Tips, Facts & Forethoughts
• Share your MEDebt Solutions evaluation/assessment with
your parents, spouse, life partner and professional financial
advisors to show documentation of your current situation
and the basis of your financial plan to take control and
smartly management your debt and income and achieve
your goals.
• Before you consider buying a house you should use the
Interactive Graphic Rent vs. Buying Calculator: http://www.nytimes.com/interactive/business/buy-rentcalculator.html - to determine if financially it is a prudent
decision.
• MEDebt Solutions highly recommend that you begin your
education regarding buying a house with the CNN Money
articles, Tips for buying a house - The top 10 things you need
to know when buying a home http://money.cnn.com/magazines/moneymag/money101/l
esson8/index.htm.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
Some Random Notes, Tips, Facts & Forethoughts
• You never want to buy as much house as lenders are
willing to lend you.
• Buying too much house could mean giving up
other things you want: vacations, eating out, a
college fund for your kids, a sufficient retirement
kitty. Or it could mean ever more debt, as you
borrow to try to maintain your lifestyle.
• Mortgage payments, of course, are just part of
the costs of owning a house. Homeowners should
plan on spending at least 1% of their homes'
value each year on maintenance and repairs.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
Some Random Notes, Tips, Facts & Forethoughts
• It is recommended that first time borrowers limit their
principal, interest, taxes and insurance, or PITI to 25% of
total pretax income, which is the most comfortable level
for most people.
• A good idea when considering buying a house, figure out
how much more you'll be paying each month for your
new home -- and start living as if you were already
shelling out that amount. If you can pull this off
comfortably for six months or more, then you can
proceed with some confidence.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
Some Random Notes, Tips, Facts & Forethoughts
• On average, US couples spend $25,631 for their wedding.
However, the majority of couples spend
between $19,223 and $32,039. This does not include cost for
a honeymoon. Understanding wedding cost now can help you
with your wedding budget later.
• YOU WILL ALSO WANT TO READ:
–
THE USA TODAY ARTICLE,
Average couple spends $26,989 on wedding;
many break budget http://usatoday30.usatoday.com/money/perfi/basics/story/201208-09/wedding-costs/56921020/1 ,
– 10 Painless Ways to Dramatically Slash Your Wedding Costs http://www.dailyfinance.com/2012/08/13/10-painless-ways-todramatically-slash-your-wedding-costs/ - which appeared in the
DailyFinance.com
– Paying the Hidden Cost of a Destination Wedding http://www.nytimes.com/2012/09/09/fashion/weddings/freedestination-weddings-arent-totally-free.html?pagewanted=all – which
ran in The New York Times.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
Some Random Notes, Tips, Facts & Forethoughts
• In many ways, the wedding may be the easiest part of
marriage. Among other things, marriage is a financial
commitment just like any other business. Marriage is a
committed cost sharing relationship, a partnership, and both
partners need to agree on goals and how to achieve them. It
makes sense for one person in a committed cost sharing
relationship/marriage to be responsible for the day-to-day
work of paying bills or their share, checking the mail, and so
forth, but the bigger tasks such as evaluating joint major
purchases, setting joint long term goals, setting budgets, and
choosing among different priorities should be decided
together and openly discussed. If there is some feeling of
discomfort discussing matters like this, work through that
difficulty. You will need to be able to work through financial
concerns together.
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
Some Random Notes, Tips, Facts & Forethoughts
If you're thinking about getting married, it can be important to consider whether you
and your intended are financially compatible. The National Foundation for Credit
Counseling has identified some key issues for couples to discuss:
•
•
•
•
•
•How much debt does each of you have? Before you tie the knot, lay it all out for
your partner to see: "Don't hide anything, as that's really getting off on the wrong
foot," the foundation said.
•Review each other's credit scores and credit reports. "Each person has their own
report and score, but knowing who is in better shape financially can provide
direction when making large purchases down the road."
•Does your spouse-to-be approach to saving match yours? Discuss what you
consider worth saving money for. "It's fine to have your individual goals, but it's also
important to have family goals too," the foundation said.
•Consider your own and your partner's spending habits. Will each of you have your
own money to spend? How much can you spend without checking with your
spouse? Who will be responsible for household expenses? "It's important to be
honest and realistic, or any plan that you develop is sure to fail“.
•What will you do if relatives or friends ask for a loan? "This question is sure to
come up over the course of a lifetime together, so it's best to firm up the answer
prior to an emotional situation“.
•
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.
The Debt Evaluation & Budget Affordability Planner
• Do note that all calculations and figures presented in this report are
estimates and subject to the accuracy of the information provided.
•
THE DEBT EVALUATION AND BUDGET AFFORDABILITY PLANNER FOR GRADUATES AND FOR
STUDENTS IS CONFIDENTIAL AND PROPRIETARY FOR INFORMATIONAL USE ONLY BY MEDEBT
SOLUTIONS MEMBERS AND CLIENTS ONLY. THE INFORMATION REPORTED ARE ESTIMATES BASED
UPON AND SUBJECT TO THE INFORMATION SUBMITTED BY THE MEMBER ARE FOR THE SOLE AND
EXCLUSIVE USE OF THE MEMBER FOR WHOM THE REPORT WAS CREATED. MEDEBT
SOLUTIONS/EAS GROUP, LLC OR ITS STRATEGIC PROVIDERS AND/OR SPONSORS ASSUME NO
RESPONSIBILITY OR LIABILITIES FOR ERRORS, OMISSIONS OR INACCURACIES. IT SHOULD BE
NOTED THAT AS WITH ANY AND ALL IMPORTANT FINANCIAL DECISIONS, INDIVIDUALS AND
FAMILIES SHOULD CONSULT AND WORK WITH A TEAM OF EXPERIENCED, CREDENTIALED,
KNOWLEDGEABLE AND TRUSTWORTHY PROFESSIONAL ADVISORS.
•
The information in this e-mail/report/communication/presentation is privileged and confidential.
Access to this e-mail/report/presentation by anyone other than the intended address, individual
or organization is unauthorized. If you are not the intended recipient of this message/report,
presentation any review, disclosure copying, distribution, forwarding, retention or any action
taken or omitted to be taken in reliance on it is prohibited. If received it in error, please advise
the sender by reply email and immediately delete the report/communication and any
attachments without copying or disclosing forwarding, retention or any action taken or omitted
to be taken in reliance on the contents is prohibited.
Prepared by: Leon Johnson, Jr., MBA, DEd, October, 2013.
•
Because of this workshop, Young, Gifted, Successful &
I am going to ________________________________.
Good Luck and Continued Success!
Help and Information
www.MEDebtSolutions.com
Some Basics You Should Know And Understand About Successful
Saving & Investing Your Money
•
These MSN.Money financial literacy videos are exceptionally
well produced, informative, non-confrontational, fun pieces worth taking the few
minutes to watch and most importantly share with everyone you care about. It's even
better to watch and discuss with your financial partners, spouses, kids, parents,
family, friends and everyone you wish to give the gift of financial literacy, stability and
success.
•
By age 14, Damon Williams has built a portfolio worth $50,000. Damon was just 5
years old when he bought his first share of Nike stock, and his story is a perfect
illustration of one of the lesser-known applications of the phrase "time is money."
•
http://roadmaptoriches.moneycentral.msn.com/index.aspx?sectionid=3
•
•
For more than 40 years, Earl Crawley, who struggles with dyslexia has been a parking
lot attendant, never earning more than $20,000 a year. So how did he build a net
worth of more than $1 million?
http://www.youtube.com/watch?v=XD0svDGyLWU
•
Most of us could learn a thing or two from Damon and Mr. Earl.
•
•
Also learn the fundamentals of risk http://roadmaptoriches.moneycentral.msn.com/index.aspx?sectionid=4
Personal Finance Resources: Books
The Automatic Millionaire:
A Powerful One-Step Plan to Live and Finish Rich
by David Bach
The Millionaire Next Door:
The Surprising Secrets of America’s Wealthy
by Thomas J. Stanley and William D. Danko
The Wealthy Barber
by David Chilton
The Richest Man in Babylon
by George S. Clason
Making the Most of Your Money
by Jane Bryant Quinn
Personal Finance for Dummies
by Eric Tyson
Personal Finance Resources:
Television/Cable/DVD
• CNN series called “Millionaires in the Making” on
CNNmoney.com featuring savers, investors and entrepreneurs,
many of whom are 35 or younger.
• Award winning documentary, Maxed Out: Hard Times, Easy
Credit and the Era of Predatory Lenders (2006) is an
independent feature-length documentary film and (2007) book
that chronicles abusive practices in the credit card industry.
Written and directed by James Scurlock, the film and book use
interviews with creditors, debtors, academics, and others to
illustrate its story. Scurlock's purpose for the film and book was
to raise awareness of how credit and lending issues are affecting
society.
Personal Finance Resources: Magazines
Smart Money
www.smartmoney.com
Money
www.money.com
Kiplinger’s Personal Finance
www.kiplinger.com
Medical Economics
www.memag.com
Personal Finance Resources:
MONEY ATTITUDE AND BEHAVIOR BOOKS
Psychology and Consumer Culture Edited by
Tim Kasser, PhD, and Allen D. Kanner, PhD. provides an in-depth psychological analysis of consumerism that draws from a
wide range of theoretical, clinical, and methodological approaches. The
contributors to this edited volume demonstrate that consumerism and the
culture that surrounds it exert profound and often undesirable effects on both
people's individual lives and on society as a whole. Far from being distant
influences, advertising, consumption, materialism, and the capitalistic economic
system affect personal, social, and ecological well being on many levels. Authors
address consumerism's effect on everything from culture, ethnicity, and
childhood development to consciousness, gender roles, identity, work stress,
and psychopathology. Contributors provide a variety of potential interventions
for counteracting the negative influence of consumerism on individuals and on
society. The book makes a strong case that, despite psychology's past reticence
to investigate issues related to consumerism, such topics are crucial to
understanding human life in the contemporary age.
Personal Finance Resources:
MONEY ATTITUDE AND BEHAVIOR BOOKS
Money Changes Everything by Elissa Schappell and Jenny Offill – An anthology by 22
writers, tackle the last taboo with tales of sudden windfalls, staggering debts, and other
surprising turns of fortune. Although ours is a culture of confession, yet money remains a
distinctly taboo subject for most Americans. A host of celebrated writers explore the
complicated role money has played in their lives, whether they’re hiding from creditors or
hiding a trust fund. This collection will touch a nerve with anyone who’s ever been afraid to
reveal their bank balance. In these wide-ranging personal essays, acclaimed authors write with
startling candor about how money has strengthened or undermined their closest relationships.
Isabel Rose talks about the trials and tribulations of dating as an heiress. Tony Serra explains
what led him to take a forty year vow of poverty. September 11 widow Marian Fontana
illuminates the heartbreak and moral complexities of victim compensation. Jonathan Dee
reveals the debt that nearly did him in. And in paired essays, Fred Leebron and his wife
Katherine Rhett discuss the way fights over money have shaken their marriage to the core again
and again. As a society, we talk openly about our romantic disasters and family dramas, our
problems at work and our battles with addiction. But when it comes to what is or is not in our
wallets, we remain determinedly mum. This is the first anthology of its kind—an unflinching and
on the-record collection of essays filled with entertaining and enlightening insights into why we
spend, save, and steal, ranging from the comic to the harrowing, all revealing the complex,
emotionally charged role money plays in our lives by shattering the wall of silence that has long
surrounded this topic.
Personal Finance Resources:
MONEY ATTITUDE AND BEHAVIOR BOOKS
Green With Envy: Why Keeping Up With the Joneses Is Keeping Us in
Debt by Shira Boss. –Financially stressed Americans are the rule, not the exception
with more of our nation's families going through bankruptcy than divorce. This book
provides a compelling tell-all about what's really going on with the Joneses, offering a
whole new perspective on financial well-being and simple, practical steps for how we
can stop trying to keep up once and for all. As the silent struggle with our money is
raging across America, each of us is harboring secret financial desires and discontents,
but few dare confess. No matter how much we refuse to admit it, our contentment is
based not on the size of our bank account but on how we measure up to those around
us. Everyone, regardless of income, occupation, or net worth, wants to keep up with
the Joneses, even when it means making financial messes and covering them up. In this
myth shattering tour of America's mind-set about money, Shira Boss offers a tantalizing
mix of hard facts and juicy gossip as she peers into the lives and checkbooks of our
neighbors...and exposes the shocking gap between public image and what's really going
on behind closed doors.
Personal Finance Resources:
Web Sites
www.fpanet.org/public
The Financial Planning Association’s (FPA’s) site finds the names
of Certified Financial Planners in specific areas (or call toll-free
to 1-800-647-6340)
www.nfcc.org and www.debtadvice.org
National Foundation for Credit Counseling; provides consumer
counseling, debt and money management plans
Personal Finance Resources:
Blogs for Young Adults
Blogs have sprung up in recent years taking advantage of Internet anonymity
to reveal to strangers fiscal intimacies the authors might not tell their
closest friends in the belief that the exposure gives them discipline to
reduce their debt.
Online swapping tips on saving, investing and avoiding debt as well as
commiserating about financial difficulties:
• Young Professionals Financial Blog – (http://ypfb.blogspot.com/)
• StopBuyinCrap.com (http://www.stopbuyingcrap.com/)
• My 1st Million at 33- (http://www.1stmillionat33.com/2006/06/list-of-highyield-dividendstocks)
• Free the Drones- (http://www.freethedrones.com/)
www.MEDebtSolutions.com
Personal Finance Resources:
Blogs for Young Adults
• bloggingawaydebt.com Authored by Tricia, 29, does not talk to her
family or friends about her finances, and says she is ashamed of her
personal debt. She posts intimate details of her financial life, including
her net worth, the balance and finance charges on her credit cards,
and the amount of debt she has paid down since starting a blog about
her debt last year ($15,312).
• makelovenotdebt.com Make Love, Not Debt is authored by an
engaged couple with a negative $70,787.94 net worth. The feedback
from readers has not always been gentle being appalled by spending
$500 on a pair of shoes and their wanting a $25,000 wedding.
Personal Finance Resources:
Blogs for Young Adults
• (wereindebt.com) “We’re in Debt” was started by the self proclaimed King
and Queen of Debt as a way to talk to each other about their debt. They
owed $34,155.70 on their credit cards at the time, and an additional
$120,000, mostly in student loans. “My wife and I have good
communication skills in every avenue of life except finances,” said the King
of Debt, insisting on anonymity because, he said, “We don’t want our
parents to find out and kill us.” Starting the blog, he said, “was a way to
communicate.”
• thedebtdefier.blogspot.com was started by Tricia after reading the online
account of another woman, who said she had paid off her credit card debt
of $19,794.23 in a little more than a year.
Student Loan Management Help Resources:
Web Sites
•
•
•
•
StudentLoanJustice.org, founded by Alan Collinge, or ProjectOnStudentDebt.org,
and read the individual stories. There’s the $70,000 grad school loan that grew to
$102,000, and the $40,000 undergraduate loan now being billed at $152,000.
All of these borrowers made payments once upon a time. When hardship struck,
they used the various rescue programs — http://www.fsahelp.ed.gov/ payment
deferrals, forbearance, loan consolidation, and loan rehabilitation, paying extra
interest and fees. But as one New York borrower wrote, “In my 22 years of good
faith efforts to pay this thing, I’ve succeeded only in doubling its size with no end
in sight.”
When a loan defaults and goes to collection, the monthly charge can run up to 25
percent more than the principal and interest due, and this charge is paid before
any of your money goes toward reducing debt.
Source: Jane Bryant Quinn,7 Things They Don’t Tell You About Student Loans - http://moneywatch.bnet.com/investing/blog/make-money/7things-they-dont-tell-you-about-student-loans/690/
More Student Loan Management Help
Resources: Web Sites
•
•
•
The Feds and the states offer limited help to students who went to rip-off schools.
Part or all of the loan can be cancelled if you take various types of public service
jobs — for example, teaching in a low-income area. States have cancellation
programs, too. For a detailed and accurate list of your options, see the excellent
Student Loan Borrower Assistance Project - http://chronicle.com/article/ManyMore-Students-Are/66223/, run by the National Consumer Law Center http://www.nclc.org/. There’s an ombudsman - http://www.fsahelp.ed.gov/ at the
U.S. Education Department, but first you have follow certain steps http://www.fsahelp.ed.gov/resources/toolschecklists/selfresolution-checklist.html
to try to resolve the problem yourself.
Most borrowers, however, won’t get help. The Education Department is itself a
collection agent, Collinge says, so it’s generally not on your side. NCLC attorney
Deanne Loonin says that, when representing clients, “I constantly find it hard to
get the Department to recognize borrower rights.” In general, consumer groups
haven’t yet stepped up to the plate on this issue. Tens of thousands of lives are
being ruined, with Americans unaware.
Source: Jane Bryant Quinn,7 Things They Don’t Tell You About Student Loans - http://moneywatch.bnet.com/investing/blog/make-money/7-thingsthey-dont-tell-you-about-student-loans/690/
www.MEDebtSolutions.com
Personal Finance Resources:
Web Sites
www.morningstar.com
Good articles on aspects of mutual fund investing
www.vanguard.com
Teaches basics of mutual fund investing and
retirement planning
www.fidelity.com
Good mix of education about mutual funds, individual
stocks and bonds, annuities, and insurance
Personal Finance Resources:
Web Sites
www.fool.com
Educational, often humorous, look at the world of investing
www.nslds.ed.gov
The National Student Loan Data System (NSLDS) is the U.S.
Department of Education's central database for student aid; you
can use the Web site to make inquiries about most of your
federal loans through their entire cycle, from aid approval
through closure
www.bankrate.com
Offers an easy-to-use loan calculator, as well as other financialrelated calculators and information
www.consumer.gov
A resource for consumer information from the federal
government
Personal Finance Resources:
Television/Cable
• CNN series called “Millionaires in the Making” on
CNNmoney.com featuring savers, investors and
entrepreneurs, many of whom are 35 or younger.
• Melody Hobson, President of Ariel Capital ABC television
program "Unbroken: What You Need To Know About
Money" is a compelling, practical and entertaining
financial education tool that features celebrities like Will
Smith, The Jonas Brothers, and others http://abc.go.com/specials/unbroke/index.
Personal Finance Resources:
Web Sites
www.pbs.org/affluenza/
Information on how individuals can cut costs,
consumption, and waste
www.aspiringdocs.org
A campaign to raise awareness about the need for more
diversity in medicine and an interactive resource to
inspire and connect students with key information about
getting into medical school
www.finaid.org
Comprehensive annotated collection of information
about student financial aid on the Web
Personal Finance Resources:
Web Sites
www.annualcreditreport.com
Comprehensive source for information on credit reports (and
ordering your credit report) in addition to general information
about many aspects of personal finance (e.g., insurance, loans,
etc.)
www.fastweb.org
Complete listing of and tips for winning scholarships at the
national, local, and college-specific level; college profiles, parttime jobs and internship info (register to use)
www.foundationcenter.org
Online subscription search engine for grants
www.MEDebtSolutions.com
Personal Finance Resources:
Free Budgeting Tools And Software
Tracking one’s spending for several weeks; preferably a month is instrumental
to understanding your hidden money behavior and habits; like what
happens to the change when you break a $20 bill.
We are all unique financial being and there is no single budgeting/financial
planning system that’s universal therefore we often must trick ourselves
into budgeting or a least find a way that works specifically for us as
individuals. There is of course MS Money and Quicken, which you may or
may not have installed on your computer. If not, you will have to pay for
these programs. Before doing so, take a look at and try some of the free
budgeting tools that are available.
What’s important here is that you find something that works for you and that
you get started and don’t forget about the old fashion low-tech columned
paper and pencil.
Personal Finance Resources:
Free Budgeting Tools And Software
• Moneycenter.yodlee.com –
(https://moneycenter.yodlee.com/moneycenter/mfalogin.money
center.do?_flowId=mfalogin&c=csit_key%3ACUuTindspqBtjyKKb
HqaWTCfqd4%3D&l=_flowId:u ) - Initially just an account
aggregator, Yodlee now offers spending categories which can be
used to help you budget. Tracks bank accounts, credit cards,
investments, loans, frequent flier miles, real estate. Compatible
with many kinds of accounts and serves up the info in a very
direct way. This site is most comprehensive, about the facts.
Lacks of eye candy and it’s hard to find the info to help you
better manage your finances.
Source: Money magazine, December 2008
Personal Finance Resources:
Free Budgeting Tools And Software
• Mint.com – Tracks bank accounts, credit cards,
investments and loans. Attractive layout with
many ways to display info graphically. The
investment tools are comprehensive, comparing
personal rates of return with major indexes and
display asset allocation. The “way to save”
section is thinly veiled advertising. A Money
magazine top pick.
Source: Money magazine, December 2008
www.MEDebtSolutions.com
Personal Finance Resources:
Free Budgeting Tools And Software
• QuickenOnline.com – Tracks bank accounts,
credit cards, investments and loans. A polished
layout with enhanced budget-building features.
Quicken has strong customer support but will
not allow you to sync with old desktop Quicken
software and you’ll have to buy the software
($50 & up) if you want features such as
investment analysis.
Source: Money magazine, December 2008
Personal Finance Resources:
Free Budgeting Tools And Software
• Wesabe.com – Tracks bank accounts and credit
cards using simple interface. Wesabe lets you
store user names and passwords on your
computer (with others, your info is stored on the
site’s server). The program can’t track
investments (company says that will change
soon). User exchange of ideas is a key part, but
membership seems to skew young. It’s best for
young people who are just starting out.
Source: Money magazine, December 2008
www.MEDebtSolutions.com
Personal Finance Resources:
Free Budgeting Tools And Software
• • SimpleD - (http://dsbudget.sourceforge.net/) - An “open source
Windows application designed for personal or household financial
management.”
• • AceMoney Lite (http://www.mechcad.net/products/acemoney/index_lite.shtml) Freeware version of an offline personal finance management program. It
even downloads stock quotes from the internet.
• • PearBudget - (http://www.pearbudget.com/ ) - An Excel spreadsheet
that has definitely had a lot of time put into it.
• • Microsoft Office Accounting Express 2007 - (http://ideawins.com/)
Seems targeted at business, so this may be overkill for home budgets.
• • Stackbacks - (http://stackbacks.com/blog/stackbacks-automatedbudget-system/ - The “Stackbacks Automated Budget System” is more of
a budgeting setup guide than a tool.
Source: My Money Blog – (http://www.mymoneyblog.com/archives/2006/11/big-list-offreebudgeting-toolsand-software.html
MEDebt Solutions - Informed Solutions For Student Loans, Debt, Money & Beyond
Personal Finance Resources:
Free Budgeting Tools And Software
• Buddi - (http://buddi.sourceforge.net/en/) - An open-source personal finance and
budgeting program, which will run on any machine with Java installed.
• • Budget On Web - (http://www.budgetonweb.com/b.exe/) - Also more business
oriented, it is a “free online system that integrates project management with contacts
management and financial tools.” Free up to 5mb of storage, that is.
• • Moneytrack.in - (http://mo.neytrack.in/) - A “free online webapp that allows you to
track all your expenses and income.”
• • Grisbi - (http://www.grisbi.org/) Another offline open-source personal finance app.
• • MySpendingPlan - (http://www.myspendingplan.com/ ) - A free online budgeting
software system that works on the ‘”envelope” system.
• • PHPFIN - (http://www.phpfin.com/ ) - An open-source personal finance management
program. It seems like you have to install it on your own server?
• • GnuCash - (http://www.gnucash.org/ ) “Personal and small-business financialaccounting software, freely licensed under the GNU GPL and available for GNU/Linux,
*BSD, Solaris and Mac OS X.” Does OFX and QIF imports.
• • Budget Master - (http://www.gnucash.org/ ) - A free personal budgeting program that
offers charts and visual reports.
Source: My Money Blog – (http://www.mymoneyblog.com/archives/2006/11/big-list-offree-budgeting-toolsand-software.html
Personal Finance Resources:
Free Budgeting Tools And Software
FREE UNNAMED “HOMEGROWN” SPREADSHEETS:
• • Foxway Budget Tracker Spreadsheet (http://www.foxway.com/tracker.html) – Very simple budgeting
spreadsheet. Nothing fancy.
• • My Money Blog by Neil Rothman • (http://www.mymoneyblog.com/images/0611/budget_neil.xls) - A bit
more advanced with pull down menus and better layout.
• • Budget and Cash Flow • (http://www.mymoneyblog.com/images/0611/budget_unknown.xlt )
Another simplistic spreadsheet, author unknown.
• • Budget Worksheet (http://www.mymoneyblog.com/images/0611/budget_tony.xls)
• Submitted by user Tony B. Instructions on use are included.
Source: My Money Blog – (http://www.mymoneyblog.com/archives/2006/11/big-list-offree-budgetingtoolsand-software.html
www.MEDebtSolutions.com
Personal Finance Resources:
Free Budgeting Tools And Software
CLEAR CHECKBOOK - https://www.clearcheckbook.com/.
- Account updating through many mobile services.
- Personalized reminders and alerts.
- Set spending limits.
- Scratch pad for notes, goals, price comparisons, etc.
- Simple editing features.
GEEZEO - https://www.geezeo.com/.
- Geezeo Blog.
- Numerous 'learning' resources.
- Product marketplace - compare various financial offers.
- Provides access/linking to investment accounts as well.
- Social network/financial support group.
I-EXPENSE ONLINE - http://www.iexpenseonline.com/.
- Geared to detail-oriented individuals.
- One-click access to features.
- Test things with a guest account first.
- Tips section can be browsed for budgeting suggestions.
- Weekly progress chart.
MINT - http://www.mint.com/.
- Continually offering new and improved features.
- No bookkeeping required.
- Notifies you of account fees and finance charges.
- Provides solutions based upon personal spending patterns.
- Secure - uses same encryption banks use for data protection.
Personal Finance Resources:
Free Credit Score Simulators
Below are several free websites that will use various pieces of your
provided information in order to assist you in 'simulating' what your
credit score is. They claim to be pretty accurate - You be the judge.
In no particular order:
–
–
–
–
–
–
http://credit.com
http://www.freebiecreditreport.com/estimatecreditscore.php
http://www.freecreditanalyzer.com
http://www.bankrate.com/brm/fico/calc.asp
http://www.creditkarma.com
https://www.quizzle.com
Source: Dr. Oleson – Financial Tips powered by FeedBlitz, LLC
Personal Finance Resources
The National Foundation
for Consumer Credit
1-800-388-2227
Only You Can Protect the Value of Your
Personal Economy
For a copy of this presentation
email your request to
[email protected]
Please reference 2013 APTA - NSC
Copyright © 2013 MEDebt Solutions/Education Association Services (EAS) Group, LLC.
No reproduction, in whole or in part, without written permission.