LIFE SKILLS Program Budget Class
Week 4
Welcome Back!
Pray
Read Announcements
Questions before we begin?
Agenda for Today
Today’s Biblical Principle: Giving
Discuss Debt
New tool to introduce: Debt Sheet
Credit Report
Bible Lesson
Mark 12:41-44 (NIV): The Widow’s Offering
41Jesus sat down opposite the place where the offerings
were put and watched the crowd putting their money into
the temple treasury. Many rich people threw in large
amounts. 42 But a poor widow came and put in two very
small copper coins, worth only a fraction of a penny. 43 Calling his disciples to him, Jesus said, ‘I tell you the
truth, this poor widow has put more into the treasury than
all the others. 44 They all gave out of their wealth; but she,
out of her poverty, put in everything – all she had to live
on.’”
Discussion
Everything we have is a gift from God
• The very poor widow offered two copper coins
• She gave all she had
What is your reaction about the woman’s devotion to
giving?
What are we communicating to God when we give?
Discussion
“Stewardship” is the way we manage all our time, abilities,
and money. Nothing of value happens in human life
without these three currencies.”
• Do you believe that to be true?
We often only think of giving in terms of money
• What are ways we can give back to God with our other “currencies”
(time and abilities)?
*Cloughen, Rev. Charles. “One Minute Stewardship Sermons”. pg 2-3
Challenges to consider
1) If you aren’t giving of your money currently, start giving
to a cause this week
• Give even if it is only $2 (“two copper coins”)
• Consider increasing your giving over time
You will be blessed through your giving
2) Find a way to give of your time and/or abilities to help
someone in need this week
Financial House
Biblical Principles
Monthly Spending Plan
Info
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Go
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Actio
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Debt: Teaching Principles
The negative consequences of debt overwhelmingly shadow any value debt may have
In order to start to overcome the burdens of debt one must hold the following views:
Debt does not change your self-worth
Debt is a way to purchase something you cannot afford
Debt makes certain assumptions about the future that you have no control over
Debt creates a temptation not to give
Debt makes you a servant to your creditors which distracts you from your true master (God)
Debt Facts
Debt has become an all too common part of life
Some alarming facts:
• 80% of Americans are in debt* • Only 44% of those in debt have a mortgage*
• 4 out of 10 people have unpaid Credit Card balances* • 3 out of 4 people hold a credit card+
• The average person has 3.4 of them+
• 1 out of 3 people carry an Auto loan+
• Our country loves debt as well • The US National debt passed 19 trillion dollars in 2016 and is continually rising
*http://www.msn.com/en-us/news/money/a-whopping-80-percent-of-americans-are-in-debt/ar-BBllyhK
+http://www.gallup.com/businessjournal/188984/americans-big-debt-burden-growing-not-evenly-distributed.aspx
Taking on Debt While in the Program
While in the Life Skills Program, Love INC strongly
advises you to not take on any further debt
Please talk with your Life Skills Leader or teachers before
making any decisions regarding debt
Debt Sheet
To best address your debt you must know:
• what debt you have
• how much you owe
• the terms of the debt
The Debt Sheet helps you organize this information in
order to take action
DEBT SHEET
A summary of money owed to creditors / family / friends and bills that have a balance due.
(Include credit cards, medical bills, etc.)
Name:______________________________ Date Debt Sheet filled out:_______________________(Update as needed) Page 1 of 2
To Whom Owed (Creditor) Creditor's Address Total Amount
Owed
Monthly Payment Plan # of
Pay'ts
Left
Rate of
Interest Due Amount of
Date Payment
Debt: Examples of
• Home Mortgage or Past Due Rent
• Past due utilities
• Car loans
• Student Loans
• Credit cards
• Collection agencies
• Past due cable, internet or phone bills
• Loans from family/friends/coworkers/employers
• Past due property taxes or income taxes
• Retail store credit cards
• Lawyers
• Medical debts- dental, hospitals, doctors, eye doctors, ENT, etc.
• Past due Child Support
• Private school bills
• Furniture/appliance/equipment/game
rentals
• Payday/Cash advance loans
• Home repair bills
Secured Debt vs Unsecured Debt
Secured Debt:
• Debt backed by collateral
• Lender can repossess item(s) if agreed upon terms are not met by
the borrower
• Examples: Mortgage, Auto Loan
• Interests rates are typically lower
Secured Debt vs Unsecured Debt
Unsecured Debt
• Not backed by collateral
• Example: Credit Card
• Note: If you stop making payments the creditor can still take legal
action
• One Example: Collection Agencies
• Interest rates tend to be higher
Debt Sheet
You may know about a lot of the debts that you currently
have (mortgage, credit cards, student loans etc)
• One way to help you better understand your current debt situation
is to view your Credit Report
Note: Debt to family, friends, or individuals will not show up
on your credit report
Credit Report
Detailed report of an individual's credit/borrowing history
3 major credit reporting agencies
• Equifax
• Experian
• TransUnion
1 free credit report from each of these agencies per year
• Note: It is wise to order 1 at a time so you can order from the other
2 throughout the year
Credit Report: What is included?
1)Account Information
• Detailed account information
• Open Accounts – credit accounts with balance owed
• Closed accounts – credit accounts without a balance
owed
• Revolving Accounts – charge accounts that have a
credit limit and require a minimum payment each month
Credit Report: What is included?
2) Inquiries • List of companies that have requested to see your credit history.
3) Negative Information
• Bankruptcies, liens, garnishments, other judgments
• Remain on credit file for 7 years
• Records of collections
Credit Report: What is included?
4) Personal Information
• Personal data
• Addresses
• Employment history
5) Dispute File Information
• How to dispute information found on your credit report
• Summary of your rights
• Remedying effects of identity theft information
Credit Report
Will not include your Credit Score
Credit Scores are available from certain websites or some
credit card companies
Note: The best way to improve your Credit Score is a
history of consistently paying your bills on time
Credit Report
Your Credit Report may have an overwhelming amount of
information.
Don’t get discouraged if you are having trouble
understanding the information.
Ask questions
Go through the Credit Report with a highlighter and
highlight each open or revolving credit and circle the
balance due
Statement of Financial Condition
A tool used to calculate your net worth
• Why do we calculate net worth?
• It gives an indication of Financial health
On this form you will list your Assets and your Liabilities
• Assets: Things you own that are of value
• Liabilities: Things you owe on (debts)
Assets: Examples of
• Cash on Hand
• Checking Account
• Savings
• Stocks & Bonds
• Collectables
• Home
• Other real estate
• Accounts receivable
• Automobiles
• Recreational Vehicles
• Furniture
• Jewelry
• Other Personal Assets
• Retirement Savings
• Other Assets
Liabilities: Examples of
• Credit Card Debt
• Automobile Loan
• Home Mortgage
• Other Real Estate Mortgages
• Personal Debts to Relatives/Friends
• Business Loans
• Educational Loans
• Medical Bills
• Life Insurance Loans
• Bank Loans
• Other Debts & Loans
Statement of Financial Condition
To calculate your Net Worth:
Your Assets - Your Liabilities = Net Worth
As your total debts decrease (or your assets increase) your net worth will increase
Net Worth
- $0 +
Let’s take a look at an example of a completed statement
Gary and Lisa’s
Statement of Financial Condition
ASSETS (Present Value):
Cash on Hand $90.00
Checking Account $475.00
Savings (HSA) $107.00
Stocks & Bonds
Collectables (stamps, coins, antiques, etc.)
Home (1st mortgage) $130,000.00
Other Real Estate
Accounts Receivable
Automobiles: 2 cars $4,000.00
Recreational Vehicles: Trailer $10,000.00
Furniture
Jewelry $400.00
Other Personal: Fixer Upper cars (3) $2,700.00
Retirement Savings (IRA, Pension, 401K)
TOTAL ASSETS: $147,772.00
LIABILITIES (From Debt List)
Credit Card Debt $5,400.00
Automobile Loans: Trailer $12,000.00
Home Mortgage $122,000.00
Other Real Estate Mortgages
Personal Debts to Relatives/Friends
Business Loans
Educational Loans $2,800.00
Medical Bills
Life Insurance Loans
Bank Loans
Other Debts and Loans $450.00
TOTAL LIABILITIES: $142,650.00
NET WORTH (Total assets minus total liabilities): $5,122.00
Statement of Financial Condition
Statement of Financial Condition
Your Statement of Financial Condition should be updated at
least quarterly to show progress
Do not get your “Net Worth” confused with your
personal worth
Over the last 4 weeks you have been introduced
to all the tools we need to complete the
construction on our “Information” Pillar
Remember to keep them up to date
each week
Are there any questions?