Module 3: Financial Statements, Tools, and Budgets

Transcription

1 Module 3: Financial Statements, Tools, and Budgets I hope you have spent some time thinking about your values, how they are a big part of your finances, and how your goals should be based on your them. Remember that your goals should lead to your Financial Plans. We are going to spend a lot of time on financial plans in this module. In fact, the entire class spends a lot of time on financial plans. This module will look at financial statements, ratios, budgeting, reducing expenses, savings, and recording keeping all important parts of financial planning. Financial Checkup Hopefully by now you have figured out that you will be doing a large project called The Financial Checkup. This is a great assignment for financial planning. The Financial Checkup asks three important questions about your own financial situation: 1. Where am I now? 2. Where do I want to go? 3. How do I get there? After doing the financial checkup assignment you may know more about your financial situation than you have ever known before. This module will get you started on parts of the financial checkup assignment. First you will complete some worksheets from the checkup using a case study. Then you will be able to complete your own worksheets. Financial Statements An important part of your financial planning can be to complete financial statements. These will help you answer the question, Where am I now? In this class we will look at two financial statements: Net Worth Statement (or Balance Sheet) Income and Expense Sheet (or Cash Flow Statement). You will be able to learn about them from the textbook reading and also from The Financial Checkup booklet. From the readings you will become familiar with the components of each worksheet, which you will need for quizzes, exams, and the checkup assignment. After learning about them, you will be able to complete a worksheet for a fictitious family using the case study notes. After that, you can complete your own Net Worth Statement. You will need to do the tracking for one month before you can complete the Income and Expense Statement. Both of these worksheets will be turned in with the financial checkup assignment. Financial Ratios Once you have completed a Net Worth Statement and an Income and Expense Statement, you will be able to calculate financial ratios. Ratios are a good way to evaluate your financial situation. They can tell you if your debt is too high or your

2 savings are too low. Again, you can become familiar with the ratios in the textbook reading and in The Financial Checkup booklet. The three ratios that you will need to know for this class are: Basic Liquidity Ratio Asset-to-Debt Ratio Debt Service-to-Income Ratio Budgeting Most people think of negative things when they hear the word "budget". Words like "depressing", "impossible", and "no fun" come to mind. You can still have fun while you are on a budget; you just need to plan for it! Some people think budgeting is like a diet, just telling you what you can't have. I prefer to think of it as a menu. You choose where you want to spend your money. Some people call it a spending plan instead of a budget. If you like that better, feel free to call it that. Budgeting is simply telling your money where you want it to go instead of wondering where it went. A budget can be as simple as taking your paycheck, paying your bills, and spending what is left. It doesn't need to be hard and confusing; you just need to do it. One of the best parts of budgets is that they can help you accomplish your goals. After you complete the worksheets as part of the financial checkup assignment, you will have a good idea where you are financially. Then you can ask yourself where you would rather be (assuming you would like to be in a different financial situation). That is when you write your goals. After that, you can make plans to accomplish your goals. Budgeting is a perfect way to accomplish most financial goals! If you want to pay off credit card debt, include higher payments in your budget. If you want to save for a down payment for a home, include more savings in your budget. I hope you are seeing how great budgeting can be. Budget Methods There are several different ways to budget. Some people may tell you that their way is the best and only way to budget. After working with many people, I can tell you that the best way is the way that works for you. Some people do well with a strict, more in-depth budget. For others, that is budget suicide. They need a way that is simple and easy. Try some different budgeting systems and find one that works for you. (Budgeting article here) Stumbling Blocks Even though I think budgeting is great, that doesn t mean it is always easy. Sometimes it is quite difficult. After teaching about budgeting for many years, I have decided that there are three major stumbling blocks to budgeting. I am going to share those with you and then talk about solutions to the stumbling blocks. If you can overcome them, budgeting will be a lot easier.

3 Stumbling Block #1 Irregular expenses. Even if you have all your regular expenses included in a budget, there are irregular expenses that come along that can make budgeting almost impossible. These include car registration, car insurance (if not paid monthly), getting children into school, holidays, birthdays, anniversaries, etc. Notice, these are not unexpected expenses. These are expenses that you know about ahead of time. Since you know about them, you can plan for them! Solution #1 Revolving savings account. There is a worksheet that is part of The Financial Checkup that helps you figure out how much you need to add to a revolving savings account. The concept is that you are taking the irregular expenses and making a regular expense to cover them. You will read about these in the textbook reading and in The Financial Checkup booklet. Stumbling Block #2 Large unexpected expenses. Sometimes you will have expenses come along that you don t know about ahead of time. These can include doctor bills, appliances going out, and (frequently at our house) car repairs. These can be just as hard on your budget as the irregular expenses if you don t plan for them. Solution #2 Emergency fund. If everyone had an emergency fund, there would be a lot less bankruptcies and other major financial problems. If you have an emergency fund for large unexpected expenses, those expenses are only small stumbling blocks. If you don t, they can become overwhelming. You will learn more about them in The Financial Checkup booklet and a later chapter in the textbook reading. Stumbling Block #3 Small unexpected expenses. Although the small unexpected expenses are not as hard on your budget as the large ones, they can still make budgeting more difficult. These expenses include situations such as a neighbor child asking if you would support a fundraiser or a co-worker asking if you want to donate to flowers for someone you work with whose mother passed away. There is a solution to these unexpected expenses also. Solution #3 Miscellaneous budget category. You may not be able to plan for these expenses, but you can have a place in your budget to put them when they do come. Having a miscellaneous category in your budget gives you some leeway each month. Reducing Expenses As you go through the material for this class, you may find that you just don't have enough income to reach all the goals you wish to reach or even just to pay all your expenses, especially while you are a student. When you find that your income is less than your expenses, you have three options: 1. Increase your income. 2. Reduce your expenses.

4 3. Do a combination of both. Most of you are probably going to school right now so you can eventually increase your income. That works great for the long run. As for short-term, some people find that they need to take on a part time job just for a few months to clear away some debt. Increasing your income can be a very good way to find the money to accomplish your goals. Sometimes you don't have the time or means to increase your income and then you need to look at reducing your expenses. Paying off debt is an excellent way to do that. You may want to reduce in other areas in order to find the money to pay the debt off quicker. Following are some ideas that students have suggested in my classes for reducing expenses: Limit impulse buying by not carrying cash or credit cards (whichever is the problem). Take 24 hours to think about larger purchases. Take a list to the grocery store and stick to it. Use coupons if you would really buy the product. Shop sales but don't run all over town chasing down sales while using a lot of gas. Understand marketing and advertising. They want you to think you NEED it. Ask a friend for help. Take them shopping with you so they can help you get ONLY what you need. Know how grocery stores are set up - the milk and bread are always at the very back so that you will walk past other items and buy them also. Spend more at the grocery store and less at fast food places. We often run to get fast food because there is nothing in the house to eat. Try shopping at outlet stores, discount stores, and thrift stores. Be careful with free products. Is there something attached that has a price tag? The Step-Down Principle Another way to reduce expenses is to use the Step-Down Principle. It is an easy, effective way to reduce your expenses. As you read the article about the Step-Down Principle, remember that it is one of the options for the You Pick assignment. (Step-Down Principle article here) Savings Personal savings rates in the United States often do something interesting. When the economy is great, personal savings rates are often low. When the economy is not doing well, personal savings rates often go up. That seems a little backwards of how we might think it should be. Maybe people feel comfortable in a good economy and spend more money and get into more debt. When the economy isn t doing well, we might get nervous and decide to reduce debt and save more. You can look at the following chart to see how the personal savings has looked since about 1960.

5 In the past I have done some financial counseling. Sometimes I would work with clients whose lives had fallen apart because of financial problems. I even had people cry in my office. This was always heart breaking. As I look back on these individuals and their problems, I think that they wouldn t have been in the situation they were in if they would have had just one thing savings! If I could stress one thing to you in this class, it would be to be diligent in your lifetime about savings. You can eliminate a lot of financial problems by having savings. You will have freedom that a lot of other people don t have. In the reading in the Financial Checkup booklet you will read about four types of savings. I highly encourage you to think about implementing those four savings into your life. It could make all the difference! Record Keeping Have you ever needed a paper relating to your finances and you couldn't find it? Recordkeeping is also an important part of your financial planning. You may need to have records for taxes, to know your current situation, to avoid fees, or to sell something. A good place to start is with a financial file. You can create one for very little cost. With a file you know exactly where things need to go and where they are when you need to find them. Creating a file is one of the options for completing the "You Pick" assignment. Follow the directions in the syllabus.

6 The following article has some great information on how long to keep information and where to keep it. (Keeping Family/Household Records article here) It is also good to have a home inventory for insurance purposes. You can take pictures of the major items that you own and write down information on the back of the picture such as the model number. Possibly the easiest way to accomplish an inventory is to use a video camera and scan each room in the house as well as the garage or outside of your home. Creating a home inventory is also an option for the "You Pick" assignment. Follow the directions in the syllabus. As the syllabus states, don't do this assignment if you have very few possessions to inventory. Activities This is a busy module. Now you can complete the worksheets for the Case Study for the first activity. These will give you a good practice for completing your own for the Financial Checkup assignment. You will need to track all your expenses for one month and then use that information to create a budget. You will also budget for one month. Both the tracking and the budget sheet will be turned in with the Financial Checkup assignment. Reading the Financial Checkup booklet, the syllabus, and the following article about the assignment will help you understand how to complete each worksheet and the entire assignment. (Financial Checkup Assignment article here) Exam 1 After completing all the reading and taking quiz 3, you will be ready to take exam 1. Exam 1 covers everything in Unit 1, including Modules 1, 2, and 3. The exam will be based on the quizzes from those three modules. Some parts of the questions may be changed. For example, if there was a question on the time value of money formulas, they may have different dollar amounts, interest rates, or savings periods. The content will be the same as the quizzes, however. Good luck!

7 The Step-Down Principle A quick way to reduce expenses is to use the Step-Down Principle. When thinking about a purchase, draw a staircase with four to six steps. Write down the most expensive way to make the purchase on the top step. On the next step, write down the next most expensive way to make that purchase, on down to the least expensive way on the bottom step. Then ask, Can I step down one or more steps with this purchase? With food purchases, the top step could be eating at a restaurant followed by a fast food place. The next steps could include buying prepared food at the grocery store, buying mixes to cook at home, and cooking from scratch. The Step-Down Principle also works for the number of times a purchase is made. If eating out is often done 10 times each month, the next lower steps could include 8 times, 6 times, 4 times or less. One nice feature of the Step-Down Principle is that any amount of steps down will help decrease expenses. The spending does not need to be cut out altogether to realize benefit. Also, the Step-Down Principle works for any spending category: entertainment, transportation, vacations, gifts, clothing, phone and cable packages, etc. Try making a family goal and then involve the entire family in creating ways to step down. The next time you are faced with an expense, ask yourself Can I step down? Alena C. Johnson

8 KEEPING FAMILY/HOUSEHOLD RECORDS This brochure is no longer available in print. It is based on a chapter from the U. S. Department of Agriculture's 1973 Yearbook of Agriculture and has been adapted for use online by the Federal Citizen Information Center of the General Services Administration as a public service. The chapter on which this brochure is based was originally prepared by Constance Burgess, a retired Cooperative Extension consumer education specialist from the University of California. The information is in the public domain and you are welcome to reference or copy it for educational purposes. What to Discard When was the last time you couldn't find an important paper you knew you had carefully put away someplace? How much time do you spend trying to straighten out your household business affairs, especially at income tax time? How, in fact, do people decide what records are important to keep and what they can discard? How do they decide where to store and keep such records and papers? Even though each family or household must work out its own system, some general guidelines can be helpful. As a starter, ask yourself a few questions: How easy or difficult would it be for other members of your household to figure out your record system? Or do you even have a system? Who besides you knows where to turn for necessary information about the family household assets and obligations? Do you have a listing of people who are important contacts, such as Are you sure titles to property and possessions are held in the best way for all concerned? If not, you may want to ask an estate attorney or a trust officer at your bank for professional assistance. A good record system will provide a bird's-eye view of what happens to property after you die or when a member of your household dies. Other changes can alter plans too---for example, divorce or separation, children reaching legal age, a long illness, a lawsuit, a natural disaster, loss of a job, and retirement. What happens if the place where you live is burglarized or there's a fire and records are destroyed? What do you do when you lose track of important paper. Which can be replaced, and how do you go about that? Which ones cannot be replaced, and what do you do about those?

9 tax counselors, attorneys, bankers, brokers, insurance representatives, employers, creditors, and debtors? Papers to Keep in Safe Deposit Boxes Every family household has some important records. Each of us should have a birth certificate or an acceptable substitute. Since there are many occasions when the information on your birth certificate will be needed, it is important that you keep it in a safe place, preferably in a safe deposit box. If you have lost or misplaced birth certificates, consider applying for replacements now, before there is a pressing need. Otherwise, you may have to wait for one you need quickly. State registration of births has been mandatory since 1920, and you can contact your State agency to get a copy. The Bureau of the Census also will search its files for proof of age. By the same token, there will be death certificate for every person someday. These will be needed occasionally and also are best kept in a safe deposit box. If you need to obtain these kinds of records, the publication, Where to Write for Vital Records is available for viewing or purchase from the Federal Citizen Information Center, Pueblo, Colorado The original copy of a will, in most cases, is kept in the safe of the attorney who prepared it. This is highly desirable, since it may save complications later. The client receives two carbon copies, one of which may be put into his or her own safe deposit box. However, there could be a legal delay in getting this copy at his or her death. The third copy, therefore, should be kept at home where it is readily accessible. Some of your important papers, such as investments, are of a business or financial nature. Certificates for securities are nonnegotiable (can't be sold or legally transferred) until they are signed by the owner. Nevertheless, such certificates can be lost or stolen, and the signature can be forged. In either case replacement involves both cost and delay. Such certificates then, when not left with the broker, should be kept in the owner's safe deposit box. Government bonds can be replaced without cost, but there will be a delay of several months. So it is best to keep these in the box also. Among other investment-type documents that require safekeeping are papers that serve as proof of ownership, such as

10 Other important documents to be kept in your safe deposit box include marriage certificates, divorce or other legal papers regarding dissolution of marriage, adoption papers, citizenship records, service papers, and any other document that is either government or court recorded. deeds for real estate, other mortgage papers, contracts, automobile titles (if this applies in your State), leases, notes, and such special papers as patents and copyrights. Renting Safe Deposit Boxes If you don't have a safe deposit box, then consider getting one. The yearly rental, at your bank or savings and loan company, is inexpensive. Often the smallest size is adequate, though larger sizes are available at slightly higher charges. If you do have a safe deposit box, ask yourself if it is large enough to hold everything that should be in it-and small enough to keep out things that don't need to be there. If you store documents from investment properties or securities, the rental can be claimed as a deduction for income tax purposes. The box should not be used as a catchall for souvenirs and unimportant papers. What Goes In And What Stays Out A guideline as to what goes in and what stays out of your safe deposit box might be: Put it in if you can't replace it or if it would be costly or troublesome to replace. Many items can be replaced rather easily. Copies of insurance policies can be obtained from your insurance companies. Copies of cancelled checks are usually available at your bank. Generally speaking, you do not need to keep the following in a safe deposit box: income tax returns, education records, employment records, bankbooks, social security cards, guarantees, and burial instructions. Keeping Tax Records How long should you keep tax away weekly or monthly salary

11 records? The Internal Revenue Service has 3 years in which to audit Federal income tax returns. However, this limit does not apply in unusual cases. If you failed to report more than 25 percent of your gross income, the Government has 6 years to collect the tax or to start legal proceedings. Also, there are no time limitations if you filed a fraudulent return or if you failed to file a return. But you don't have to keep everything for tax purposes. You can lighten your record load by discarding certain checks and bills once they have served their purpose. For example, you can throw statements---assuming you are paid in that way---after you check them against your annual W-2 Form. But save cancelled checks that relate directly to an entry on your tax return, and keep all medical bills for 3 years to back up your cancelled checks. The IRS generally keeps records for 6 years. You can obtain a copy of your tax return by writing to the IRS center to which your return was sent. Make sure you include your social security number and a notarized signature. Making Household Inventory Records Among your important papers keep a household inventory. If there is a fire or burglary in your home, this record will help you remember what has to be replaced and how much each item is worth. An inventory also may show that you need to increase your insurance because your possessions are worth more than you thought. The best way to go about compiling a household inventory is to start with a sheet of paper for each room in the house, apartment, etc. Forms on which to record items are available from several places, sometimes from your county Extension office. When you make your inventory, start at one point in the room and when it was purchased, and what it would cost to replace it. Include the model number, brand name, dealer's name, and a general description. If you take pictures of the rooms and your household possessions, it will make identification or replacement, easier. Arrange expensive collections, silver, and jewelry separately and take close-up pictures. When you have finished all the rooms, including the basement, garage, and attic, add up the total replacement cost. That figure will represent what your household is worth and is what your insurance should cover. Update your inventory every 6 months or so by adding new

12 go all the way around, listing everything. For each item, list what it is, how much it cost, purchases and adjusting replacement costs. Organizing A Home Filing System A system for personal records is a necessity. No matter how modest your home facilities might be, you need a special place to keep your papers. That could be as elaborate as a room or home office or as simple as a corner of the kitchen, bedroom, or hall. Records, regardless of the filing system used, should be reviewed at least once a year to discard items no longer needed. January is a good time for an overhaul, since it's just before you begin to work on taxes. The equipment you will need doesn't have to be elaborate. Think about a filing cabinet before you think about a desk. The two-drawer type can be covered with paint or wallpaper. A wooden slab or hollow-core door stretched across the top of two cabinets can make a practical home office desk. If you don't have space for a small cabinet, buy accordion folders, a storage chest that fits under the bed, or get sturdy cardboard boxes of an appropriate size. A home computer or portable typewriter and a pocket calculator can be handy, but they are not essential. The essential thing is to know where everything is. Two Home Files You should keep two home files, in addition to your safe deposit box at the bank. These two files are your active file and your dead storage file. Your active file will hold: 1) unpaid bills until paid, 2) paid bill receipts, 3) current bank statements, 4) current cancelled checks, 5) income tax working papers. After 3 years, move these items to your dead storage file. There are other items which should always be kept in your active file. These include: 1) Finally, keep a record book of the whereabouts of your important papers. If you use a loose-leaf binder, you will be able to change papers easily or copy a page or two. The book should contain a list of all your savings and checking accounts. This way you won't become one of the missing depositors who have forgotten their accounts or who have died without telling relatives about them. Also, include the name and branch of

13 employment records, such as resumes, recommendation letters, health benefit information; 2) credit card information, including the number of each card, by company name; 3) insurance policies; 4) copies of wills; 5) family health records; 6) appliance manuals and warranties; 7) education information, such as transcripts, diplomas, etc.; 8) Social Security information on benefits and regulations; and 9) an inventory of what's in your safe deposit box (you might store a key in the inventory folder). the bank where you keep your safe deposit box. The book also should have all of the family members' social security numbers, and all of the insurance policy information. It's a good idea to keep a copy of your household inventory here as well. Don't forget to record all your household improvements. Finally, make sure someone else knows and understands the family record-keeping system. Preparing A Net Worth Statement Have you tried filling out a net worth statement as a means of keeping tabs on yourself and your family possessions? Such a record provides a good overall picture and can be prepared in an hour or less. If you do it annually, you can see quickly whether you are getting ahead financially or falling behind and, in either case, how fast. An accurate net worth statement can serve as a point of departure for the year ahead. If you're not making as much progress financially as you had expected to, you can decide whether to stay on course or to change directions for the coming year. THINGS TO REMEMBER Use the checklist chart below to remind yourself what to keep and what you can discard. Safe Deposit Box 1. Birth Certificates 2. Citizenship Papers 3. Marriage Certificates 4. Adoption Papers 5. Divorce Decrees

14 6. Wills 7. Death Certificates 8. Deeds 9. Titles to Automobiles 10. Household Inventory 11. Veteran's Papers 12. Bonds and Stock Certificates 13. Important Contracts Active File 1. Tax Receipts 2. Unpaid Bills 3. Paid Bill Receipts 4. Current Bank Statements 5. Current Cancelled Checks 6. Income Tax Working Papers 7. Employment Records 8. Health Benefit Information 9. Credit Card Information 10. Insurance Policies 11. Copies of Wills 12. Family Health Records 13. Appliance Manuals and Warranties 14. Receipts of Items Under Warranty 15. Education Information 16. Inventory of Safe Deposit Box (and key) 17. Loan Statements 18. Loan Payment Books 19. Receipts of Expensive Items Not Yet Paid For Dead Storage All Active File Papers Over 3 Years Old Items To Discard 1. Salary Statements (after checking on W-2 Form) 2. Cancelled Checks for Cash or Nondeductible Expenses 3. Expired Warranties 4. Coupons After Expiration Date 5. Other Records No Longer Needed

15 The Financial Checkup Assignment Information NOTE: The Financial Checkup assignment is worth more points than anything else you will do this semester. It will be very helpful for you to watch the videos of how to fill out the worksheets that are included in the modules. This Financial Checkup comes in three steps. First you will complete some of the worksheets using the case study situation. After submitting those, you will be able to compare them to examples for extra credit. Just make a statement or two about how your worksheet compared to the example. Finally, you will complete all the worksheets with your own information for the final assignment. The worksheets you will complete with your own information need to be on the file that is included in the Financial Checkup, under assignments. They need to be turned in as ONE FILE. If you need more tracking sheets, you can use individual sheets from the case study and attach them separately. The paper will be attached separately as well. Completing the worksheets will take a while. You can start working on several of the worksheets. I have written some information that will help you do well on that assignment. The Financial Checkup - Help for Students The Financial Checkup booklet is self explanatory and can be completed without any extra explanation. However, as a student you may benefit from the following additional information. Some students feel that they are not at a point in their lives to benefit from the worksheets. Keep this in mind - you need to start somewhere. By doing the worksheets now, you will have a base to go from. As your life becomes more complicated, you will already know how to complete the worksheets. If you are married it is best to complete the worksheets with your spouse combining all information (except the life insurance worksheet which should only be done for one person). If this is not possible, try to keep as much as you can separate. If you have the class with your spouse, complete all the assignments together but turn in two copies, one with each name on it. If you do not have an item on one of the worksheets, it is best to put a zero there. When the paper is graded, we will know you didn't just forget that portion. Following is some specific information on the worksheets: Net Worth Statement: Be sure to use the fair market value (what you could sell it for) when writing down the amounts of the assets. Be sure to write total balance due, not the monthly payment on the liabilities. Income and Expense Statement: Use your tracking information to complete this statement (turn in your tracking sheets with the worksheets). Be sure to put zeros

16 on the income sections if you do not have an income at this time. If you receive money from parents to pay for your expenses, write that amount as income and write down how you spent it. If your parents pay for your credit card purchases, also write down what you spent and count what they pay as income. DO NOT COUNT ANYTHING TWICE. Don't count a credit card purchase and also your credit card payment that has the same purchase on it. Don't count money taken out of savings as income. For many of you, this will make your worksheet look quite bad. That is likely to happen at this time in your life. Hopefully it will improve soon. Financial Ratios: The first two come directly off the Net Worth and Income and Expense Statements. The last one, debt payment-to-income ratio needs some calculation. Take your monthly debt payments from your Income and Expense Statement, add them all together and multiply that by 12. Enter that amount on the first line. Your gross income may not be on your Income and Expense Statement if you used your take-home pay on that statement. You can get that information from your tax return form or W-2 form. You can also look at a payment stub and multiply the gross amount by the number of pay periods you receive in one year. Revolving Savings: Think of all the expenses you have throughout the year that are not regular (car registration, tuition, birthdays and holidays, insurance that isn't paid monthly, etc.) Put each expense on the worksheet under the month it is due with the amount due. Total all expenses and divide that by 12. That amount is how much you will need to take out of your monthly budget. Retirement: This worksheet is one of the more complicated ones, but it is not hard. On line 1 just estimate how much you want to live on. You can ask someone who is retired how much they recommend. The example uses $45,000. This would be a moderate income. If you do not have a Social Security Benefit Statement for line 2, you can use the example information. Line 3 is for a defined contribution pension only. Most companies do not use this type of retirement plan now. You will likely have zero on this line. Line 7 is used for the more common 401(k) plans. Only put amounts on lines 7-9 if you really have money in those funds. Follow all of the steps to reach the amount you need to save each year to reach your retirement goals. If you find that it is a very high number there may be several reasons. If you do not have a work retirement program yet, the worksheet shows that you need to save more to make up for that. Also, if you plan to retire before age 65, you will need to save a lot more. Try changing your retirement age and see how much difference that makes. Finally, this worksheet does take inflation and taxes into account; however, it is based on a moderate investment. If you invest more aggressively, you may not need to save as much each year. Life Insurance: If you do not have any dependents, the amount on line 1 will be zero. This is the amount you want to leave behind for your dependents. Line 8 will also be zero if you have no dependents because there will be no one to receive the benefits. If you do have dependents, you can just choose how much you want to leave them for an annual income. It doesn t have to be 75% of your income.

17 Goals: Complete at least one goal in each area (short, intermediate, long). Try to be as specific as possible with each goal. You will need to fill out each box for one goal in each area to get full points. Budget: If you do not have an income at this time, be sure to put zeros on the total lines on the income section. Use your Income and Expense Statement to estimate what you will spend (budgeted column). Write down what you actually spent during the month (actual), and find the difference between the two columns for each item (difference). Paper: Analyze each worksheet. Explain what you learned from each worksheet and what your financial situation looks like in each of those areas. Each evaluation needs to only be one paragraph. Make sure you put a heading on each paragraph for each worksheet. Write a final paragraph evaluating your overall financial situation. After reading this information and looking in the Financial Checkup booklet, if you have any questions, please contact me.