evergreen financial counseling

© Evergreen Financial Counseling 2013. All Rights Reserved. 1

Evergreen Financial Counseling

Online Lesson Guide


We are a non-profit credit counseling and educational provider approved

by the US Trustees to offer pre-bankruptcy credit counseling and post-

bankruptcy personal financial management in compliance with the

Bankruptcy Code.* The educational and training background of all our

counselors either meets or exceeds standards of the US Trustees. All of our

counselors have received Bachelors degrees from accredited universities

and are trained and experienced in the credit counseling and personal

finance arena. We are funded exclusively on the nominal fee for service

charged to students and we do notpay or receive fees or other

considerations for referrals, nor do our courses contain any commercial

advertising. We do not promote, market, or sell any financial products, or

solicit business of any type.We do not offer alternative payment schedules

regarding unsecured debt, such as debt repayment plans. Participation in

our courses will not impact a student's credit report in anyway.

Personal Financial Management: Our post-bankruptcy debtor education

(personal financial management) course discusses the psychology of

spending, how to make and keep financial goals, writing down a budget,

debt warning signs, good vs. bad credit, financial safety nets, and

consumer protection laws. After completion of this course, Evergreen

Financial Counseling will provide a certificate of completion to you and

attorney (if applicable)within one business day. Evergreen is obligated to

provide your certificate after the completion of your course in a prompt

manner. You will need to complete the entire course in order to receive a

certificate of completion. If you require immediate delivery of your

certificate of completion, please contact Evergreen via email or

telephone.

Limited English Individuals: At this time, Evergreen Financial Counseling‟s

sessions and courses are only provided in the English language. All

individuals with limited English proficiency will be referred to the US Trustee

list of approved providers with more language options.

Payment: Our Credit Counseling and Personal Financial Management

courses cost $39.99 for single/joint filers. We do not charge any additional

fees for the generation of certificates of completion. We accept online or

over the telephone debit, credit, and Paypal payments. Students can mail

in check and money order payments to PO Box 3801 Salem Oregon 97302.

We run promotional discounts in the form of coupon codes, so some of our

students may pay less than $39.99. In addition, some of our students pre-

pay with their attorneys as well, just ask your attorney if they are set up for

this service.

Fees: The regular fee is $39.99. Evergreen Financial Counseling provides its

services without regard to an individual's ability to pay.Individuals who

have a household income of approximately 100-150% of the estimated

poverty threshold for their applicable family size as updated periodically in

the Federal Register by the U.S. Department of Health and Human Services

qualify for $15 off their course fee for a total of $24.99. Individuals who have

a household income of approximately 100% and below the estimated

poverty threshold for their applicable family size as updated periodically in

the Federal Register by the U.S. Department of Health and Human Services

qualify for $25 off their course fee for a total of $9.99. Prior to taking their

course, individuals can fax their request to 1(800)581-3513 or email their

request to [email protected]. They are asked to include their

household income documentation. An individual‟s information will also be

reviewed by an Evergreen Financial Counseling counselor during their

credit counseling or personal financial management course, and if their

household income qualifies them for a fee discount they will receive this

discount. If an individual has any questions regarding fee discounts, they

can call 1(800)581-3513 to speak with a counselor.

mailto:[email protected]


Evergreen Financial Counseling uses extensive and sophisticated secure

technology to protect your data and transmissions between you and

Evergreen and Agencies participating in this website. Transmission

between browsers and our web server is implemented using Secure

Sockets Layer (SSL) technology. This technology requires an SSL-capable

browser. Although Evergreen has taken these measures to ensure that your

personal information is delivered and disclosed only in accordance with

your instructions, Evergreen cannot and does not guarantee that the

personal information you provide will not be intercepted by others and

decrypted.

There are areas on our website where you‟ll be asked to enter both

personal and non-personal information. We DO NOT sell or share any

personal information about you to or with any person or organization

except as authorized by you, to participating Agencies, as set forth herein,

or as may be required by law or court order. We use the information you

provide to supply the US Trustees with the appropriate information needed

to confirm you‟ve completed your required counseling and/or education

course. We might disclose debtor information to the United States Trustee in

connection with the United States Trustee‟s oversight of Evergreen, or

during the investigation of complaints, during on-site visits, or during quality

of service reviews. In addition, Evergreen Financial Counseling may

disclose account or other personal information when we have reason to

believe that disclosing this information is necessary to identify, contact or

bring legal action against someone who may be causing injury to or

interference with Evergreen Financial Counseling's rights or property, other

website users or anyone else that could be harmed by such activities.

You can review and change your personal information in an active

account at any time. Just contact us at [email protected] for any

such requests. Federal and state regulations may require that we store

completed submissions for various periods of time. In order to comply with

these regulations, we may be unable to delete information from our

databases.

Changes to Privacy Policy: If we make a change to our Privacy Policy in

the future that will affect how we treat your information, we will notify you

by e-mail of the change to the extent such change is material. Otherwise,

we will post such change at the website, and such change will be

deemed to be effective 10 days from the date of such posting. In that

instance, your ability to opt out of the new policy will be determined by

applicable laws.

*Approval does not endorse or assure the quality of a Provider's services.

The US Trustees have reviewed our credit counseling and Personal Financial

Management courses but have neither reviewed or approved any other

services offered by Evergreen.

BY USING ANY SUCH SERVICES YOU ARE ACKNOWLEDGING THAT YOU HAVE

READ AND UNDERSTAND THIS POLICY AND THAT YOU AGREE TO BE BOUND

BY ITS TERMS. IF YOU DO NOT AGREE TO BE BOUND BY THE TERMS OF THIS

PRIVACY POLICY, SIMPLY EXIT THIS PAGE WITHOUT ACCESSING OR USING

OUR WEB SITE OR ANY OF OUR SERVICES.

This Privacy Policy was last updated on October 4, 2013

mailto:[email protected]


Welcome to your Personal Financial Management Course. Before we begin, let‟s cover a few housekeeping items.

Time: Expect this class to take approximately two hours. However, you are not required to finish in one sitting. Feel free to

logout and login at your convenience.

Identity verification: Your class will randomly stop twice during this class and you‟ll be required to log back in with your

username, password, and mother‟s maiden name. While this may seem tedious, we are required by the U.S. Trustees to

make sure you‟re there and paying attention.

Audio: This class will be read to you over the speakers on your computer. Please make sure the volume is turned on, and if

you have external speakers, make sure they are plugged in. If you do not have audio on your computer, that is okay. You

can simply read the course material instead. However, you will still need to press the play button at the top of each page

and allow a few minutes for the unheard sound to play out.


Great! Now that we got those things out of the way, let‟s get started. You are listening to Evergreen Financial Counseling‟s

Personal Financial Management class. In the next two hours we will cover the following topics:

The Psychology of Spending

Financial Personality Types

Needs vs. Wants

Financial Goals

Net Worth

Writing a Spending Plan

Financial Safety Nets

Wise Use of Credit

Family and Finances


You may have recently declared bankruptcy. We at Evergreen Financial Counseling recommend embracing this decision

and making the most of it. Decide to make your bankruptcy a turning point in your life. Up until now, you have traveled

down a well-trodden road. For some, it was a path of financial crises without safety nets. There were insurmountable

medical bills and losses of income. There were unexpected deaths, and difficult divorces. For others, it was a path of

misunderstanding, ignorance, or unhealthy levels of risk. There was credit card spending, frivolous home equity

mortgages, and living beyond your means.

Make the choice to turn off of this road, and set your course in the direction of financial security. Turn onto a road where

you can find calm confidence. We will give you tips and ideas to help you along your way, but the most important thing

we can do is encourage you to be brave. Be brave, and evaluate where you're at right now. Be brave, and evaluate

where you want to go. As a wise man once said, “Whatever the mind of man can conceive and believe, it can achieve”

(W. Clement Stone).


There are many things you need to live. In Maslow's Hierarchy of Needs, these are called Physiological Needs. They are air,

food, water, and shelter. Without these things, you could not live, and as a result, much of your spending accounts for

these needs. However, how you chose to spend for these needs is based on your values, or what is most important to you.

For example, you need food to live. But what do you eat? Where do you eat? Do you look closely at grocery store ads

and buy items only when they are discounted? Or do you buy high, prioritizing organic and locally grown products? One

is not better then the other. Your spending simply reveals your values, whether you realize it or not. If you and a friend were

both given $50, would you spend it differently? Of course you would. People are different, and people have different

ideas about what is important. The deep-seated beliefs you have about what is important and special are your values.

Values are formed from the beginning of childhood at home, at school, and in your community. All your life you have had

and will have choices to make. Whether you know it or not, you make these choices based on your values. And your

values are used when you have to choose how to spend your money.


Problems arise when your spending does not match your true values. This can happen easily if you aren't careful.

Let's say you are a typical family man or woman. You value family unity, and family security. You want to save money for

your children's education. You want to save money for retirement. These represent your deep-seated beliefs and values.

However, you are now spending $500 a month on an expensive car payment and do not have enough left over to go

towards savings. This car payment does not represent your true values. Instead, it represents the importance of image and

the importance of rewarding yourself for your hard work.

We are not saying image or rewarding yourself is bad. It is the spending money on things that do not reflect your true

values that doesn't work. When this happens, problems occur. You feel unsettled. You feel insecure. You have arguments

with your partner about finances. It is important to analyze your current situation. Does your spending represent your

deep-seated beliefs? If not, what do you need to change?


If I were to ask you what personality type you were, you might say outgoing, shy, serious, or silly. But what would you say if I

asked what financial personality type you were? Would you know what to say? Did you know there was even such a

thing?

We all deal with money on a very regular basis, and over time, beginning in our childhood and still continuing on today,

we develop certain attitudes and feelings about money. This relationship to money helps form your financial personality,

which in turn strongly affects you and your family's financial wellbeing.

Please listen carefully as I explain different financial personality traits, and see if you can find yourself in anything I

describe. Understanding your personality will provide insight into how and why you react to money the way you do. With

this insight you can better approach your financial weaknesses and strengths.


One financial personality tends to be afraid of addressing financial issues. You could call them the Financial Ostrich. These

people don't think about retirement, building a savings, or creating a will. They are scared of talking about money, so they

ignore these important responsibilities. If you think this is you, I understand how you feel. It is a safety mechanism to avoid

things that bring us stress and anxiety. Try to think about small things you can do to help make talking about budgeting,

saving, and other hot topics less scary to you. Will you feel safer if you do it casually over a nice meal? Do you need to set

some guidelines beforehand with a spouse, to prevent arguing or bickering? Be patient with yourself and others while you

learn to look at money head-on.

Another type of personality is the Nervous Nelly. Nervous Nelly gets easily overwhelmed by all of the financial choices that

need to be made. For example, they know saving is good, but they do not know where or how to start. Should they begin

with retirement or their child's college education? Should they focus on the here and now, or the future? Learning to take

it one day at a time, knowing that any decision is better than no decision, will help these personality types.


One financial personality is the Procrastinator. These individuals have good intentions, but get easily distracted by other

things and fail to make good long-term financial goals. They have a hard time saving, but an easy time spending.

Then there is the Peacock. The peacock is very concerned with how he or she looks to others. They have a hard time

making wise financial decisions, and instead spend money on houses, cars, clothes, and electronics, to insure they look

good for others. This overspending is a sure way get into financial trouble.

You also might recognize the Compulsive Spender. People react to stress in their lives very differently. Some people

overeat, some people drink, and some people spend money. They do not buy items because they need it or want it, but

they do it in response to an emotion they are experiencing. Spending money gives them a quick adrenaline rush. They

may know it isn't a good idea, but they rationalize their behavior. If you think this might be you, remember to ask yourself

what the real issue is when you are emotionally spending. Also, in the meantime, while you figure that out, only spend

money that you have. Money that you have budgeted for that purpose. If you spend money you do not have on

unplanned splurges, you are only hurting yourself and your family.


In the strictest sense, a “need” is something that is a necessity for your survival, this being food, shelter, clothing, medical

care - the basics. A want, however, is something you desire. You may suffer mental anguish if you don't have it, but you

will still survive without.

The difference between needs and wants can sometimes be hard to properly identify in our very prosperous country. In

1998, 97% of “poor” Americans owned a television. In many lesser-privileged countries, less than 30% of the population

had access to electricity. Everything is relative. It can be helpful to recognize that advertising and peer pressure can

influence your ability to identify and balance true needs and honest wants.


A critical part of financial security is learning how to set and how to keep goals. The well-known adage “those who fail to

plan, plan to fail” can be applied to our financial lives. It is important to look ahead, make decisions, and then live our

day-to-day with these decisions in play.

For our purposes today, it will help to distinguish three types of financial goals. These are short-term, mid-term, and long-

term goals.


Short-term financial goals usually take one year or less to accomplish. They require less money and might have specific

deadlines. A good example of a short-term goal is quickly paying off a $2000 credit card balance in a few months. When

you are first learning how to set financial goals, it is best to start with one that is short-term. These are easier to accomplish,

and will allow you to feel the positive feelings of a job well done sooner.

With a commitment to goal-setting and the establishment of good habits in place, it is time to think about what mid-term

goals you'd like to see happen. Mid-term goals can take two to five years to complete. They might be paying off a larger

debt, like a car, or going on a fun family vacation. Because you've experienced the success of short-term goals, you will

be motivated to hang in there when you feel your patience is wearing thin. Remember though, the harder the work, the

greater the reward. Mid-term goals may take longer to accomplish, but when you are there, it will be well worth the effort.

Just imagine going on a planned for - and paid for-- relaxing weeklong trip to Hawaii with your family. You will be able to

enjoy yourself so much more, knowing you are there because you worked hard and saved, and every penny being spent

is your own.

Lastly, there are long-term goals. Long-term goals require even more delayed gratification than mid-term goals. They take

five years or more of work, and require more self-discipline and dedication. Good examples are paying off your home

mortgage completely, or establishing a large retirement account. These goals may feel out-of-limits for you and your

situation, but if you aim for the moon and miss, you may just hit a star. Point being? It doesn't hurt to try!


All good goals are specific, measurable, and realistic.

A goal needs to be specific, as opposed to a general desire. An example of a general desire is “I need to cut down on

my monthly expenses”. How can we make this good goal more specific? How about “I will not buy coffee at Starbucks

and only drink break room coffee.” Turning your general desires into specific plans help you achieve your goals.

A goal also needs to be measurable. Ask yourself, how am I going to measure the results of the action? Identify numbers,

percentages, or time frames. For example: “I will not buy coffee at Starbucks and only drink break room coffee for the

next three months. Because I am spending (insert amount) a month at Starbucks, then I will be saving (insert %) every

month.”

Lastly, the goal needs to be realistic. If you make a goal that isn't likely to be met, you will only feel frustrated and

disappointed.


Before we start your spending plan, it is helpful to assess where you are at financially. A great way to do this is by

determining your net worth.

You, as a person, are ultimately worth very much, regardless of how much money you have or owe. Please envision the

popular Mastercard commercials that put an amount on several items, and then end by labeling something, usually

family or memories, as “priceless.” This is who you are. You may not have the kind of money you thought you would at

your age, or you may be in a financial situation that causes you embarrassment, but it is very important to understand

that you, as a person, are priceless. And that you have the power to learn new things and change for the better.

As you follow the instructions and determine your net worth, please keep this in mind. Please, do not be discouraged.

Chose to concentrate on the future, on your goals, and the hopefulness of your ability to make things happen.


Net worth simply means knowing what you own, assets like a home, car or cash, and knowing what you owe, debts like a

mortgage or a car loan.

To calculate your Net Worth, do the following:

Assets:

Cash on hand:

Checking account:

Savings account:

Cash Value of

Life Insurance or Annuities:

Real Estate Equity:

Car Equity:

Other personal property:

Cds:

Bonds:

Stocks:

IRA:

Pension:

Total: ________________

Second, find your liabilities by adding up the following:

Liabilities:

Mortgage:

Second Mortgage:

Home Equity loan:

Car Loan:

Car Loan #2:

Total Student Loans:

Other Loans:

Total Credit Cards:

Taxes Owed:

Total: ________________

Assets Total - Liabilities Total = Net Worth


A Spending Plan: Do you ever feel like you are throwing your money away? Well, at least if you had thrown it away, you

would know where to look for it. We aren't going to tell you how to make more money, but we will help you learn how to

stretch your money.

Many people find success in looking for good buys, cutting down on careless spending, especially credit card spending,

and coupon clipping. These are all viable options, and ones you may already be doing or may be interested in learning

about. But for now we will focus on one guaranteed way to help stretch your dollars. What is that you ask? Well, it‟s writing

down a spending plan!

A spending plan can help you look realistically at your income and how you have been spending it. Another word for

spending plan is budget, but this word seems to have a negative connotation attached to it, so we prefer to use the

neutral term spending plan. We all spend, but do we plan?


Creating a solid financial plan is necessary in order to successfully achieve your financial goals for your family. It will help

you avoid repeating past mistakes, know where your money is going, live within your means, and improve communication

about money with your family.

Regardless of how often you get paid (weekly, biweekly, etc), write a budget for each month a few days before the start

of the month. For now, let's just practice. Pretend it's the end of the month and you are going to write down a budget for

next month. Do not stress if you don't know exact numbers.


Step One: Record Monthly Gross and Net Income

The first thing you need to do is write down your “gross” and “net” income. Your “gross” income is the amount of money

you earn before taxes are taken from your paycheck. You need to write this number down so you can see the effect that

taxes have on your take home income. After you subtract the taxes paid, you have your net income, the amount you put

into your bank account.

Do you have money for other sources coming into your pocket each month? Lucky you! These numbers should be added

into your net income. Examples of these other income sources are rental properties, interest and dividend income,

alimony or child support, social security, tax refunds, or help from relatives or friends.


Step Two: Record Monthly Expenses

Now that you‟ve written down how much money you expect for the upcoming month, it is time to write down your

expected expenses. These can be divided into four categories. They are: Monthly Fixed Expenses, Monthly Variable

Expenses, Periodic Expenses, and Discretionary Expenses.

Please do not feel overwhelmed. I will explain what each are and I will walk you through each step.

Monthly Fixed Expenses: These are expenses that cost the same every month, like mortgage or rent, car payments,

childcare costs, home medical care, child support, alimony, cable TV and internet bills. Another item you should treat as a

fixed expense is regular contributions to your savings account. It is highly recommended that you contribute 10% of gross

monthly income on a monthly basis. We will talk more about savings later.

Monthly Variable Expenses: These are expenses that occur every month, but their amount varies. Good examples of these

are: Food, phone, electric, gas, laundry, natural gas. Now, these can fluctuate dramatically from month to month. Look

through old bills, receipts, and records to find an average cost per month.

How do you find an average? Add up cost from past months, divide them by the number of months you are using, and

the number you get is your average. Keep in mind that some utility companies offer “level payment plan” and switching

utilities over to a monthly fixed expense can offer greater predictability and stability to your spending plan.


Step Three: Record Periodic and Discretionary Expenses

Periodic Expenses: These expenses are paid regularly, just not monthly. Car insurance, other insurances, car repairs,

medical copays, or school fees are good examples of periodic expenses. These can present difficulties in personal

finances, because people can forget about them and then when they rear their ugly head they are unprepared and put

the amount on a credit card. The best way to deal with these bills is to save for them. Set aside the money for these bills in

a savings account until the bills need to be paid.

For example, If your car insurance is $800 a year, but due every other month, divide the total amount by 12, which would

be $67 every month into a savings account. For car repairs, chose an amount to save every month. Let‟s say you chose

$100. After a year you will have an extra $1200 in your savings account and when a car repair need comes your way you

will be prepared.

Discretionary Expenses: These are what we call “I wants”, as opposed to “I needs”. If there is ever anything to be cut from

a spending plan, this is the first thing to go. However, it is still important to take care of yourself, even if it is just a little.

Included within discretionary expenses can be a fun financial goal you have, such as saving for a vacation. Paying

money every month into a “fun financial goal” account can help you save up money for bigger purchases. Other

examples of discretionary expenses include: travel, gifts, personal care, entertainment, charity, newspaper and magazine

subscriptions, and clothing. Also, incidentals like cigarettes, lottery tickets, etc.


Step Four: Balance your Spending Plan

Now that you have written all of your expenses down, look them over and make sure you haven‟t forgotten anything. If

you have an expense that does not fit into any of these categories, feel free to add your own miscellaneous category.

When you are finished, add up all of your expenses. Subtract this total amount from your monthly net income. If this

number is positive, then you have some extra money to put into savings. If the number is negative, then you need to look

over your entries and see where you can realistically cut back. This is called balancing your budget.

If your number is negative, you need to:

Find out how much you need to cut from your

expenses

Figure out where you can make cuts in your

expenses

Balance your income and expenses after you

make cuts.

Now that you have written down a spending plan, let‟s

go through a quick checklist. If you answer yes to these

questions you probably have a good spending plan, if

your answer is no to any of these questions, you

probably need to work on it:

Are all your expenses listed?

Have you budgeted for any of your goals?

Does your spending plan balance?

Do you have a plan for keeping Lesson of your

spending plan?

Do you think you can live on the amounts you

budgeted?

Do you think you will stick to the plan?


Step Five: Record Spending Activity

It is important for you to know you are never finished with your spending plan. It is great that you‟ve written it down and

balanced it, but the next step is keeping Lesson of your spending by saving receipts and writing down your purchases in a

written record. This helps you stay on course and make sure your plan is working.

In addition to keeping a written record of your spending, it is also smart to keep adequate financial documents in your

home. A brief list of what to keep and for how long is as follows:

Keep your receipts for a month. After you‟ve compared them to your monthly bank statements, you can throw them

away as long as you don‟t need them for tax or warranty purposes.

Keep your bank, brokerage, mutual fund, and mortgage statements for one year, as well as your utility bills and

paycheck stubs. After you have reconciled these documents with your yearly statements and annual W-2s, you are

safe to shred and dispose of them. Again, as long as you don‟t use them when itemizing your taxes.

Keep your W-2 forms, year-end bank statements, and any documents used for itemizing taxes for seven years. And 4.

Financial records you want to hang on to indefinitely are your annual tax returns, home-improvement records,

receipts for major purchases, and beneficiary designations.


Cost-Cutting Tips: How can I not spend so much? This is something you may be asking yourself after filling out your budget.

This is common. Let me go through a few things that might help:

Housing: There is a phrase known as “house poor”. This means you are committed to a high house payment, and are

therefore having a hard time spending money in other areas. If you are experiencing this you may want to consider

downsizing to a mortgage or rent that allows more flexibility in your budget. Just because a bank qualified you for a

certain loan amount, it does not mean this is the right mortgage for you and your particular situation.

Vehicles: Before you buy a car, make sure you calculate what you can afford and do not get talked into a more

expensive loan by an eager car salesman. You may be able to afford the monthly payment, but this does not mean you

can afford the total price. Do you want to still be paying off the car after it has lost its original value?

Couponing: You can save quite a bit of money by couponing. It's worth it to get the Sunday paper for the coupons alone!

Many grocery stores also have rewards programs where you swipe a card to save more money. Many blogs exist that can

help you comparison shop in your area, such as thefrugalhousewife.com. There are also printable coupons on websites

such as couponmom.com and couponcraze.com. Remember to not be overwhelmed at first! Start with a little goal, such

as saving $5 each time you go to the store. Also, when you're at the store, don't buy an item just because you have a

coupon. Make sure it is the cheapest price on the product you're purchasing.

Coupon codes: Ever wonder where you get coupon codes when shopping online? Search retailmenot.com or

bradsdeals.com for the website you want to purchase from, and if there's a coupon code, these websites will tell you!

http://thefrugalhousewife.com/

http://couponmom.com/

http://couponcraze.com/

http://retailmenot.com/

http://bradsdeals.com/


Buy Generic: As a general rule of thumb at the grocery store, generic is cheaper, even if you have a coupon for the

name brand. Still, you may encounter times where there are sales and you have a coupon, so always check the prices on

both the generic and name brand before making a purchase.

Comparison Shopping websites: Pricegrabber.com is a great site for comparison shopping online, as is pronto.com and

froogle.com. These websites use algorithms to compare prices on pretty much anything you buy online, whether it's a

laptop or pencils. Fare-finding websites such as kayak.com, travelocity.com, or hotwire.com can also help you save on

hotels, car rentals. and plane tickets.

Ask around: Asking around is very important when shopping for services, so you know not only the price to expect but also

the quality of the service. It's good to ask a variety of people where they get their hair done, who fixes their car, what

doctor they go to so you can make an educated decision that will help you and save you money.

Mobile Apps: Yes, that expensive little device in your pocket can help you save. Apps such as BuyVia or Amazon's Mobile

App or Groupon can compare prices or even scan bar codes when you're shopping.

Buy used or refurbished instead of buying new: You can have that KitchenAid for a fraction of the price if you buy

refurbished. It's also not a bad idea to buy a used book if you know it's something you may not keep.

Conscious Spending: If you can't think of two reasons for purchasing, put it back on the shelf. This will help you more than

anything when you're shopping.

Black Friday/Cyber Monday: These dates fall the Friday and Monday after Thanksgiving, opening the holiday shopping

season with deals that you'll be hard-pressed to find for the rest of the year. Bradsdeals.com publishes ads with deals from

many different retailers ahead of time, so you can get your game on and make a list. Be the crazy Target lady. But

http://pronto.com/

http://froogle.com/

http://kayak.com/

http://travelocity.com/

http://hotwire.com/


beware: Amidst the great deals, there are also not-so-great deals touted by retailers to trick the inexperienced shopper.

Thus you need to compare ads.

Recreation: Be creative about how you find your entertainment. The library is a free, public source of books, movies, and

CDs and can save you a lot of money. Look for city events that will be fun, but free. Limit how often you eat out or go to

the movies. Only spend when you have saved for the recreation, and do not buy on credit.


Safety Nets: Imagine a tightrope walker moving across a narrow cable. He is tall and fit and dressed in a pressed suit. He

carries a briefcase and moves with the confidence of a cat scampering across a tree branch. Suddenly, as if in slow

motion, his right foot slips and he falls forward. He falls like rain and you instinctively reach out your arms. But you‟re too far

away and there isn‟t enough time for you to save him. You pull up your hands and cover your eyes. Yet instead of

crashing to the ground, the man lands in a net. He bounces several times and then lies still. You see him sit up and crawl

across the net to a pole where he then climbs up a ladder. The tightrope walker doesn‟t appear bothered by his fall and

he is ready to perform once again.

We are all like trapeze artists walking across tightropes. Each day we walk the line, hoping beyond hope that we won‟t

fall. But like the man in the suit, it doesn‟t matter how lucky or talented we are, we will each fall at some time in our lives

and when that happens the only thing to save us will be reliable safety nets. In the following pages we will introduce and

discuss a variety of financial safety nets.

The safety nets we will talk about today are savings accounts, insurance accounts, consumer protection laws and public

and non-profit resources.


Savings: Saving for a rainy day is an oft heard, but oftentimes ignored, expression. It appears most Americans have

stopped saving money, and studies show the percentage of money saved is close to 1%. This is a scary piece of

information, especially when considering how one of the best safety nets a person can create for himself or herself is a

healthy savings account. The first savings account everyone should have is an emergency fund. This should be no less

than $1000 cash, and put in a safe, but easily accessible bank account. This money should only be touched when you

have a true emergency, such as owing an insurance deductible. When your emergency fund is used, it is necessary to fill

it back up as soon as possible. The second savings everyone should have is the more traditional savings account. Experts

recommend you contribute at least 10% of your monthly gross income to this savings account every month. If you can't

afford to put this much money into your savings, put in what you can. Every little bit helps. Do not act as if you have to

spend every penny each month. Do you have an extra $50 sitting around? Put it into a savings account instead of coming

up with a new way to spend it. Having money in your savings account will add a much-needed sense of peace to your

life.


Insurance is another important financial safety net. There are many different types of insurance, such as: health, auto, life,

disability, homeowner's, renter's, and liability insurance.Insurance is an agreement between you and an insurance

company. You pay them a small amount of money in the form on a premium, and they agree to pay you a much larger

amount if the item insured is damaged or lost. The purpose of insurance is to transfer the financial risk of a loss to the

insurance company.If you have insurance for an item, but the item is not damaged or lost, you only lose the premium

paid. But, if you do not have insurance and you do experience a fall off the tightrope (so to speak), you will find yourself

without a safety net. It is better to pay a financial premium and transfer the risk of a loss, illness, disability, or death to an

insurance company, than it is to keep the premium and hold all the risk yourself.Here is some general advice concerning

insurance:

There are two basic types of Car insurance; liability and collision. Car liability insurance covers damage done to

others and/or vehicles when you (the insured) are responsible. This type of car insurance is required by law. Car

collision insurance on the other hand typically covers damage done to your vehicle from accidents with other cars

and/or objects and is not required by law. When deciding on whether or not you should get collision insurance for

your car, an important fact to consider is the value of the vehicle. If the car is older and of less value, it is typically

wiser to only carry liability insurance.

Health insurance in this day and age is a necessary safety net for every individual. As expensive as monthly premiums

can be, the cost of a hospital stay is dramatically higher. In fact, unexpected medical expenses are one of the top

reasons for bankruptcy today. Please protect yourself by acquiring health insurance. Another health-related safety

net to consider in addition to health insurance is a Health Savings Account. A Health Savings Account (HSA) allows

you to set aside a predetermined amount of money tax-free to use toward planned health expenses like a health

insurance deductible or orthodontia.


No one likes to think about not being there to take care of the ones they love, but life insurance is a necessary safety

net to consider if you have people who depend on your income. There are two types of life insurance, whole and

term. If you ask an insurance agent their opinion on whole vs. term life insurance, they‟ll usually tell you whole life

insurance is a great idea, but outside of the insurance industry most financial experts recommend only buying term

life insurance. Term life insurance is substantially cheaper than whole life insurance, and if you‟re interested in the

investment[„ component of whole life insurance it is better to set up an investment that is separate from life insurance.

When deciding what amount of life insurance policyyou need, it is recommended to purchase ten times your annual

income. For example, if you have a salary of $50,000, you should purchase a $500,000 life insurance policy. Invested

at 10%, a $500,000 policy will return $50,000 in interest and replace your lost income.


Consumer Protection Laws: Over the years there have been many federal and state laws created to protect you, the

consumer. Let‟s go over a few of these laws and how you can take advantage of the services they provide.

The first law we will discuss is called the Fair and Accurate Credit Transactions Act. The Fair and Accurate Credit

Transactions Act is an amendment to the Federal Fair Credit Reporting Act of 1977, and provides you, the consumer, with

several protections regarding your credit report and potential fraudulent activity. Firstly, this law requires the three major

credit reporting agencies, Equifax, Experian, and TransUnion, to provide their reports for free to consumers once a year. It

is wise to check your report regularly and we will talk more about how to do this later. When you check your report you

might notice a mistake or fraudulent activity. Unfortunately, mistakes on credit reports are fairly common. Thankfully, under

the Fair and Accurate Credit Transactions Act credit bureaus are required to correct the error within 30 days of

notification from consumer. If you spot an inaccuracy on your credit report, write a letter to the credit bureau, attach a

copy of your credit report with your account number highlighted, and send it via certified mail. Check your report again

after 30 days and if the inaccuracy hasn‟t been removed contact them again, siting the Fair and Accurate Credit

Transactions Act. If problems continue, send your complaints to the Federal Trade Commission.The Fair and Accurate

Credit Transactions Act also establishes measures to protect consumers from the devastating effects of Identity Theft. If

you suspect you are a victim of identity theft, immediately report the situation to the fraud department of a credit bureau

and ask them to place fraud alert on your account. Under another consumer protection law, the Fair Credit Reporting

Act, you can place an initial fraud alert for only 90 days, but you can request an extension of the fraud alert for up to

seven years. If you suspect you are a victim of identity theft it is also important to contact law enforcement and file a

police report, alert the Federal Trade Commission, and file fraud affidavits with any creditors involved in the identity theft.


Another key consumer protection law is the Truth in Lending Act. The Truth in Lending Act protects you from consumer

fraud by requiring credit card companies to disclose their annual interest rate, their method of computing interest, and all

finance charges. This law also regulates advertising by preventing companies from sending unrequested credit cards to

consumers and placing a limit ($50) a consumer must pay on all unauthorized use of a stolen credit card.

The last consumer protection law we‟re going to talk about today is the Equal Credit Opportunity Act. The Equal Credit

Opportunity Act prohibits lenders from discriminating on the basis of sex, race, marital status, religion, nationality, age, or

the receipt of public assistance. If you ever suspect discrimination, you are encouraged to bring your concerns to your

state Attorney General.

These are only a few of your federal and state consumer protection laws. For more information check out our Resources

page.


Public and Non-profit Resources: There are countless public and non-profit organizations in your community that are there

to help you in your time of need. Consider a town ravaged by a terrible natural disaster like a tornado. When the dust

settles, who is there to help? It‟s government and non-government organizations like FEMA, the Red-Cross, local and non-

local church groups, and other grassroots organizations. They come on the scene prepared with trained staff, needed

supplies, and access to funds. Similarly, there are organizations created to help you in the aftermath of a personal

financial tragedy. Let‟s cover a few of these resources:

Medical Expenses: We all know how expensive medical care can be. If you find yourself with hospital or doctors bills,

it is okay to contact their billing department and ask for financial assistance. Sometimes receiving a partial or whole

discount is as easy as simply asking for help. In the same vein, there are programs to help with the cost of health

insurance. If interested to see if you qualify, contact your state‟s local Medicaid or Medicare office.

Utility Expenses: The cost of heating in the winter, cooling in the summer, or other utility expenses are sometimes a

matter of life and death. If you‟re having a difficult time paying for these utilities, the first thing you want to do is

contact your utility company and explain your situation. They most likely have programs set in place to help reduce

your financial burden, and if not can most likely put you in contact with a local organization that does. Most states

and cities have non-profit organizations and programs established to help individuals who cannot afford their utility

bills.

Housing Expenses: If you are experiencing difficulty paying for housing, contact your local HUD (Housing and Urban

Development) office. HUD is an excellent resource for information about programs that will help with housing and will

provide housing counseling and guidance with no cost to you.


You would be surprised if you knew how many people and organizations are ready and willing to come to your aid.

Whether it is for medical, utility, housing, food, or many other types of financial assistance, there are numerous public and

non-profit resources in your community. Simply contact your state‟s human service or social service agencies for more

information on available benefits and aid.


Credit: Credit is essentially borrowing someone else‟s money to buy now, rather than having to save and purchasing the

item after you have saved enough money. However, your creditor is not giving you the money for free. They are charging

you a percentage of what you borrowed, so in a way you are acting as a highly generous savings account.

The longer the money is borrowed, the more it costs. But the quicker you pay money towards the debt, the less it costs. For

example, let‟s compare the cost of credit and time needed to pay off a $1000 balance with an interest of 17%. If you pay

just $25 more than the minimum monthly payment, you will save over $500 and pay off your debt five years earlier!


Types of Credit

There are different kinds of credit, and we‟ll do our best to explain them briefly but thoroughly.

Secured Loans: Secured credit is when you pledge an asset of yours as collateral. The lender then feels more “secure”

because they know if you do not follow the contract then they, the lender, can take the asset as their own.

Examples of secured loans are mortgages, equity lines, auto loans, mobile loans, passbook loans, and secured credits

cards.

Unsecured Loans: Unsecured loans are the opposite of secured loans. This is when a creditor loans out funds without any

collateral.A good example of this is a credit card.


Good Debt vs. Bad Debt: Debt can be a powerful financial planning tool if used correctly. Good debt is used as an

investment to improve life and livelihood. There are very few examples that represent good debt, but the two most

common are a home mortgage and an education. These loans typically have low interest rates, less than 6 or 7 percent.

However, it is important to remember that home mortgages and education are never good debt if you cannot afford the

payments. Remember what we said earlier about being “house poor”.

Bad debt is almost every other time you borrow money. Rather than borrow money, it is best to save until you have

enough to pay in cash. This way you don‟t have to pay for the original purchase plus interest. When you set financial goals

for yourself every month, secure the safety nets we discussed, and follow your spending plan, you will have no need for

credit card use.


Debt Warning Signs: Recognizing these signs can help prevent small money management problems from become large

problems.

You routinely spend more than you earn.

You are unable to put extra money into a savings

account for emergencies and retirement.

You make only the minimum payment required on

your credit cards.

You continue to make purchases on your credit

card while trying to pay it off.

Your credit limit is maxed on most of your cards.

The minimum payment on your credit card isn‟t

enough to pay off the balance and only covers the

finance charges.

You‟re unsure about how much you owe or what

may be on your credit report.

You skip payments on some bills in order to pay

others, or use cash advances on one credit card to

pay off another.

You bounce checks or overdraw your bank

account.

You use credit cards for day-to-day purchases like

groceries, movie tickets or fast food.

You‟ve recently been turned down for credit or a

loan.

You panic when faced with an unexpected

expense, such as a car repair.

You owe more on your car than it‟s worth.

Creditors are calling you about overdue bills.

You lie to your friends and family about your

spending and debt.


Interest Rates: Lenders do not loan money out of the goodness of their hearts. They do it because they make money on

your interest payments. Rather than put their money into a low interest rate savings account, they let you hold on to the

money and then they make up to 30% (and sometimes more) in interest back. They are the ones getting a “deal”, not

you! There are two ways lenders charge interest. These are Fixed and Adjustable rates. When searching for a good interest

rate, it is important to understand a Fixed Rate is better. This means the rate you sign up for will always stay the same.

There are rates offered, Adjustable Rates, that may start out lower than average but in time they almost always increase.

While you may be able to afford your loan payment at the initial interest rate, you may not be able to afford it after the

rate adjusts. It is important to avoid adjustable rate loans.


Obtaining Your Credit Report: The three major credit bureaus are Equifax, TransUnion, and Experian. Their major objectives

are to gather information and compile the information into a credit report. It is important to know they are neutral third

parties.

Your credit report contains the following:

Your identity, which includes your name, address, social security number, date of birth, number of dependents and

previous address.

Your employment information, position, length, and previous jobs

Your credit history or "tradelines".

Public record information such as tax liens, child support, or bankruptcy

Under the Fair and Accurate Credit Transactions Act, each U.S. citizen can obtain one free copy of their credit report

every 12 months from each of the three credit reporting agencies. It is important to get a report from all three because

the information within them may vary.

In order to get a report you can go online to www.annualcreditreport.com or each individual site www.experian.com,

www.equifax.com, www.transunion.com

For a fee, you can get a merged report at www.myFICO.com

http://www.myfico.com/


It is also important to know that if you are ever denied credit, employment, or insurance, you have 60 days to mail in

written proof of denial to the three agencies and you will receive a free report. To do this mail a letter with the following:

your full name, date of birth, photocopy of social security card, photocopy of driver‟s license, current address, former

address if you lived there in last 5 years, and a copy of the letter denying credit. Links to the credit bureaus can be found

in our Resource section.

Credit Scores: The current method used to calculate credit scores was developed by Bill Fair and Earl Issac in 1956, of the

Fair Issac Corporation. This is known as the FICO score. The FICO score has a range of 300-850. Simply put: 720 or above is

good, and 600 and below is not so good.

A secondary scoring system is known as the VantageScore. This was developed by the three credit bureaus in hopes of

uniformity and increased detail. VantageScore still uses numbers, but also makes use of a letter grading scoring system.


When you or someone else asks for information on your credit report, this is called an inquiry. There are 2 types of inquiries:

soft and hard.

Soft inquiries have no impact on credit score. This is when you request your own copy, credit card companies request a

copy for promotional inquiries, and current creditors monitor your credit activities.

Hard inquiries can have a negative affect score. Hard inquiries are when you apply for a loan or a credit card, or when

you grant permission for your credit to be pulled when you are obtaining credit. Too many applications for credit cards or

loans can be a warning sign for too much debt and unstable financial loads, and therefore can negatively impact your

credit score.


How to Cope with an Unexpected Financial Crisis:

Job loss. A costly medical diagnosis. Car troubles. An unexpected death. Divorce. A natural disaster.

All are examples of unexpected events that can terrorize your financial life, burdening you with both physical and

emotional stresses. One Evergreen Financial Counseling student shares part of her story with you: “When my doctor told

me my husband had skin cancer,” she says “I was of course worried about the difficult days ahead, days of chemo and

surgery and much more, but I was also suddenly confronted with what felt like unsolvable money problems. We had

health insurance, but there was the issue of a high deductible and co-insurance payments, as well as fighting with the

insurance company to cover everything the doctor recommended for my husband. And because my husband‟s fight

against skin cancer quickly became his full-time job, he couldn‟t work as many hours as usual, so we lost most of our

income right when we needed it more than ever.”

Does her situation sound familiar to you? Many of you may be here today because of a similar situation. What is one to do

when they are confronted with a sudden loss of income and/or a sudden increase in financial burden? Rather than

turning to a credit card or other forms of borrowing money, whether from a family member or bank, we at Evergreen

Financial Counseling recommend you consider the following:

Assess your savings. If your emergency savings fund isn‟t enough, look into longer term savings accounts you may

have at hand. However, prematurely tapping into retirement accounts, CD‟s, or other investments may incur

additional fees, so be aware and informed before you move in that direction.


Examine your Budget. Now is the time to trim the unessentials. Look at what you can give up in the short-term to save

yourself some money. You most likely have unnecessary expenses like a cable bill, gym membership, or fast-food

purchases that you can put on hold until you are back on your feet. You can also put a stop to any short-term or

long-term savings goals you have for yourself and put the recouped funds into paying for your new financial burden.

Make more money. Is this easier said than done? Yes, but that doesn‟t mean you shouldn‟t try. Ask for extra hours at

work, look for an additional part-time job, sell something you don‟t really need, like a second car. Or perhaps you

can hold a weekend garage sale and get rid of those extra Christmas decorations that have been collecting dust in

the attic. Be creative. If you‟re a stay-at-home mom, offer babysitting or daycare in your home. If you drive to work,

look at riding the bus instead.

Ask questions. Is your medical bill $5000 and you only have $2500 to spare? Talk with the hospital and see what they

can do for you. Sometimes reducing what you owe is as simple as asking the right question to the right person. If they

offer financing as an alternative, you can always say “Oh, I don‟t borrow money anymore. But I can pay cash if the

bill is this amount.” Don‟t underestimate the power of cash.


Seeking Advice from Public and Private Agencies: If you find yourself confronted with an unexpected financial crisis,

remember there are many public and private service agencies designed to offer comfort, advice, and assistance during

your time of need. Contact your state‟s Attorney General‟s office for guidance in finding a list of local charities who might

be able to help. You can also contact your local United Way for similar assistance. Remember, sometimes all you need to

do is ask the right question to the right person in order to receive the answers and help you need. Don‟t be afraid to talk

to others about your struggles. Unexpected financial crises come to us all and there is nothing to be embarrassed about.

Family and Finances: The number one cause for divorce today is financial stress. It is very important for couples to

communicate their feelings about finances in the home.

When talking with each other, remember that emotions are always involved when talking about money. Try to remain

calm and sensitive. Talk about how money was dealt with in your childhood, and how that might affect your relationship

with money today. Talk about what money really means to you, and what purpose and meaning you want it to have for

your family.

Listen carefully to one another. Sit in a quiet, peaceful place. Plan ahead of time what you are going to talk about. Only

discuss one topic at a time. Do not blame each other, recognize that both of you hold responsibility and that you are

partners. It is helpful to honestly discuss your strengths and weaknesses in regard to finances. You may learn that you are

very different, but that that might not be a bad thing. You can both focus on your strengths and share the load, as a

team.


Personal Story: 1 of 7 Charlotte and Joe are the parents of two young kids in Denver, Colorado. While Joe works as a

Junior High Band Director, Charlotte stays at home to take care of their kids. They are faced with the challenge of raising

a family on just a teacher‟s salary, but with creativity and commitment they make it work.

Charlotte says “I'm not the best at budgeting. My budget is I don't spend money on things I don't need. And the things I

do need, I always buy on sale. There is rarely a time that I splurge. And for big ticket items, like a car or a desk or anything

like that, I always buy used. For clothing for my kids, I buy for the future, always. Like the after Christmas sales, I bought

clothes for the kids for next winter. It's worked out for me, because so far my kids' sizes are pretty predictable. But I don't

have cable, I don't rent movies. I guess you could count this as a latte factor. We either watch movies we own or go to

the library and get movies there. Saving money for me is just looking at every facet of your life and seeing ways you can

cut back. The goal for eating out is to only eat out twice a month. But when we do eat out, we always use a coupon. I

am a coupon clipper. I also found out about how breaking your mortgage payment into bi-monthly payments instead of

one monthly sum will shave 7 years off of a thirty year mortgage."


Personal Story: 2 of 7 Here is a letter from Marie from New Mexico:

“My husband and I just started writing down our budget a couple of months ago. We decided we wanted to pay off all of

our debt and we‟ve already paid off $400 in medical bills! Before we were only paying small portions of our bill, never the

entire payment.

Nevertheless, since we started keeping a budget we‟ve also started using cash more often instead of the debit card. In

doing so, it has allowed us to realize exactly how much dining out we were doing each week when there was no money

left! We quickly learned how to tighten the spending strings!

We always use to feel like we were broke and had no money. Now that we have a precise budget, we feel a new sense

of empowerment in knowing how much money we have, what we are going to do with it, and what we need to save. It's

nice having a little extra left over each month to apply to our debt.”


Personal Story: 3 of 7 Amanda is a 28-year-old stay-at-home mom who tries very hard to not spend money she doesn‟t

have. She only shops the sales at grocery stores, frequents garage sales regularly, and quenches her shopping fix by going

to thrift stores regularly. If you look at her spending, you will see very small increments from $1 to $10.

Amanda is confident that she is financially wise, but is frustrated with her situation because she feels like she cannot afford

to pay for her son‟s preschool or save up for special items like a family vacation to the coast.

After writing down a monthly budget and her financial goals, she was able to see that if she didn‟t go to her favorite thrift

shops, and saved these little expenditures, she would be able to save approximately $100 a month.

This amount in turn was enough for her to take her son to preschool twice a week and take her family on a vacation 9

months later.The moral of the story: Small expenses add up fast. If you think about how you want to use your money

before you spend it, you‟d be surprised at what you can do with it.


Personal Story: 4 of 7 Kyle and Camille both work part-time and go to graduate school full-time in Portland, Oregon. They

are just beginning their life as budgeters and decided to share some of their experience with you. Camille says:

When my husband and I decided to make a budget, we realized it was going to mean changing the way we thought

about money and spending. Before we started budgeting, we used money to help make our lives more convenient at

the moment. For example, we would come home from a long day at work, and neither of us wanted to cook, so we

would go out to eat. When we were bored on a Saturday night we would spend money on a movie. When we felt like

we needed something like clothes, new haircuts, make-up, books, etc. we would just go out a buy them. No questions

asked. By the end of the month, we would be completely out of money, and our hopes of ever saving enough money to

make bigger purchases, like family vacations, seemed impossible. When we created a budget, it helped us to realize that

there was more to our finances than what was in our bank account at the moment. Budgeting helped us to see the big

picture of our finances, and helped us to understand what we needed to do to meet our goals of paying off credit cards

and going on vacation.


Personal Story: 5 of 7 Ben Lopez is your typical family man. He works hard for his wife and two kids, and prides himself on his

no-nonsense approach to family finances. He says:

“We have had a rule-maybe not a rule, maybe more like a courtesy-in our house that we would not spend more than

$5.00 unless we talked about it first. Even though we are now in a situation where we could spend as much as $10.00, I still

think it is a great idea to talk, check, ask, be on the same page. Keep those lines open!”

Personal Story: 6 of 7 Sarah and Samuel Anderson have raised three children in Salem, Oregon and now enjoy their lives

together as empty nesters. Samuel is a public school teacher while Sarah teaches private music Lesson s out of their

home. Sarah gives her advice on budgeting and credit use:

A wise person once told me "Never spend as much as you make." At that time we were definitely in debt. We started a

monthly budget and one by one paid off our bills. That was 25 years ago. We have a written monthly budget to this day.

We love to travel and have a section of our budget devoted to saving for trips. Sometimes it's only had monthly donations

of $25.But over time we've taken our family to Hawaii, Australia, Mexico and many other smaller trips. We've never

charged any of the expenses for those trips.

The same person taught me my other rule. Always pay the whole balance on your credit card each month. Don't use it if

it can't come from your monthly budget. Minimum payment is another name for bondage!


Personal Story: 7 of 7 Ten Commandments from a Bankruptcy Attorney of over 30 Years:

1. Never buy a time share- ever.

2. Financing expensive cars gets people into trouble

more than about anything else.

3. Never buy jewelry on credit. 100% markup and high

interest.

4. Avoid buying furniture on credit like the plague.

5. There is no statute of limitations on student loans.

They will follow you until the day you die. Only get

student loans in a job that will make you a living,

not as a pottery teacher, helicopter pilot or fashion

designer.

6. Most people think their problem is debt when it

really is a lack of education.

7. Never cosign for a child on a car loan- buy him a

cheap car on craigslist.org otherwise you will regret

it.

8. Never buy whole life insurance only term.

9. If you are contacted by any credit resolution

company Google the company name and fraud

or rip off and see if any red flags come up.

10. Many things have fallen only to rise higher-

Seneca.

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