Dimes, Dollars and Dimes, Dollars and DecisionsDecisions

Everyday Spending and Saving Strategies

Resource Management

• Re-source – A source of supply; an available means– A natural source of wealth or revenue– Something to which one has recourse in

difficulty– An ability to meet and handle a situation

Mirriam Webster Collegiate Dictionary

Objectives

• Familiarize you with various resources available to you and your clients and ways to access these resources.

Resources

• Brainstorm resources clients have available to them – what “helps” do they have and use?

Resource Management

• Using what you have to get what you need• Today the primary resource we will be

discussing is money and various sources of help to make better spending and saving decisions.

• All of us are smarter than any one of us – please feel free to share throughout the program.

Plugging Your Spending Leaks

• Circle all items members of your household have spent money on in the past month.

• Fold the paper in half lengthwise• Fold it twice like a business letter – creating 3

even sections• Open to reveal 6 rectangles• Does one rectangle appear to have more items in it

circled?• Which one and why?

COMPASS

• www.compass.state.pa.us

• Commonwealth of Pennsylvania Application for Social Services

• About Compass

Family Savings Account

• http://www.newpa.com/programDetail.aspx?id=93

• Site• Who has the program in your county?-

handout

Taxes

• VITA – Volunteer Income Tax Assistance• Tax Credits

– EITC Earned Income Tax Credit– Advanced EITC W-5– Child Tax Credits– Additional Child Tax Credit– Child Care Tax Credits– Retirement Saver’s Tax Credit

• W-4 withholding

Medical

• Medicare Beneficiaries– Part D – Drug Insurance Benefit– Extra Help to pay for Part D

• Samples from Doctor• Pharmaceutical company patient assistance

programs Example: www.merckhelps.com• BlueChip/ Adult Basic

PowerPay

• Online resource to help develop a debt repayment plan PowerPay– 1– 2– 3

• “Credit Counseling” agencies may only be consolidators-offer no true counseling

Banking Services

• Know the rules- may take up to 5 days for deposits to be credited to your account.

• Insufficient funds – almost instantaneous withdrawal from checking-vendor and bank charges can accrue

• ChexSystems – monitors how we use checking – 5 years w/no account for abuse

Free Credit Request Form

• Check at least annually• Your job to report/fix errors• Credit history used for:

– Lending decisions– Hiring decisions– Homeowner insurance rates– Car insurance rates– Landlords

Recordkeeping

• Improve family financial recordkeeping practices– Check receipts– Save receipts– Get organized

Bankruptcy Changes

• Means testing – more difficult to file if your income is higher than the state median income

Family Size

1 2 3 4*

$38,931 $44,361 $58,986 $66.569

*Add $6,300 for each additional person

Bankruptcy Changes

• Allowable monthly expenses based on GROSS income. Family of one example.

Less than $833

$833 to $1,249

$1,250-$1,666 $1,667-$2,499

Food 197 215 231 258

Housekpg 19 20 25 26

Apparel 60 61 70 75

Personal Care 19 24 26 27

Misc 108 108 108 108

TOTAL 403 428 460 494

Bankruptcy

• Can not discharge the following debts:– most taxes; – child support; – alimony; – most student loans; – Court fines and criminal restitution; and – personal injury caused by driving drunk or

under the influence of drugs.

401(k) and other retirement plans

• In general protected from bankruptcy• If you leave employment – 4 choices1. Cash out2. Let it stay with previous employer3. Move to new employer’s plan4. Rollover to IRA

401(k) Loans a BAD idea1. Borrowing pre-tax money and paying with post

tax money- interest cost + marginal tax rate makes it a 6%+15%=21% interest rate.

2. May not be able to continue to contribute while loan outstanding

3. Missed time in the market due to lower invested amount

4. If you separate from service have 60 days to repay or considered early distribution – you will pay taxes plus 10% penalty – depending on the amount outstanding could put you into higher tax bracket.

Price Books

• Develop a notebook of frequently purchased items and regular prices.

Wal-Mart Dollar General

Sam’s Club

Toothpaste 6 oz.

1.76 .98 1.45

Pine Sol 20 oz.

1.89 1.69 1.49

Flour 5 lbs..

2.19 2.29 2.39

Angel Food Ministry

• NOT income based• http://www.angelfoodministries.org/

Goodwill Industries

• Check when truck comes in• CONCEPT: Time is Money (trading one

resource for another)

Utilities

• Telephone– Lifeline – 150% poverty - $8.20 reduction on

monthly phone bill– LinkUp America – 50% off initial connect

• Electric• Gas

Penn State Publications

• Build a Budget Book• Calendar• Taking Control of Your Money• Bouncing Back When Your Income Drops

Other resources

• Dollar Stretcher www.stretcher.com• Iowa State University weekly tip Borkowski, Doug

[dbork@mail.hs.iastate.edu]• University of Missouri Financial Tips

http://www.missouri.edu/~cfewww/financial/tipoftheweek

• www.yourmoneysbestfriend.com• Wfn.com• www.Personal.psu.edu/rlk16

Closing Thoughts

• If you continue to do what you’ve always done, you’ll get the same results.

• Use it up, wear it out, make do, or do without

• If your expenses exceed your income, then your upkeep will be your downfall.

Evaluation

• Please complete and return

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