Find the full series including Powerpoint, worksheets, and answers key at www.LisbonWC.org/free.htm
Welcome!
FINANCIAL FREEDOM WORKSHOP
Session 1
Developed using the books: Your Money Map: A Proven 7 Step Guide to True Financial Freedom and The Total Money Makeover
PURPOSE FOR THIS WORKSHOP
- Financial struggles are common in the majority of the homes in America.
~ This workshop is not just for the down and out.
~ Some are up and out. They may have a larger income and lots of stuff but in debt up to their ears.
- There is a trend for increased debt and decreased savings.
~ Debt is not the root issue.
~ “Debt is the symptom of overspending and under saving” (Ramsey).
- Debt makes you a slave to the lender.
Proverbs 22:7
The borrower is servant to the lender.
- “Debt is a means to obtain the ‘I want its’ before we can afford them” (Ramsey).
- Debt is so ingrained into our culture that most Americans can’t even envision a car without a payment, a house without a mortgage, a student without a loan, and credit without a card” (Ramsey).
FOUNDATION
- God is the creator of everything.
- Everything belongs to Him.
- He wants the best for us and offers abundant life!
- The Bible is full of financial wisdom.
MONEY MAP
DESTINATION 1
- Begin using a spending plan
- Save $1,000 for emergencies
Key verse: Proverbs 21:20
“The wise man saves for the future, but the foolish man spends whatever he gets.”
- Most people today have no idea how much they are spending and run out of money before they run out of month
- Many getting on a budget may realize for the first time how much they are overspending
- Some will need to downsize their lifestyle to bring their finances in balance.
- Dave Ramsey says, “Act your wage”
- You have to get serious about stopping the financial free fall
- You have to get mad at debt!!!
- If you are in a financial mess, are you ready to finally do something about it?
SAVING FOR EMERGENCIES
Emergencies are inevitable!
- Tires go flat, refrigerators go on the fritz - the list is endless.
- Having no emergency fund will force you to use credit cards and debt.
- “Money magazine says that 78% of us will have a major negative event in a given ten-year period of time” (Ramsey).
- Starting with a $1,000 starter emergency fund “isn’t going to catch all these big things, but it will catch the little ones until the emergency fund is fully funded” (Ramsey).
The average person in America is three weeks away from bankruptcy.
- Most are living pay check to pay check.
- PERSONAL SAVING RATES (Percent of Income)
~ 1984: 10.8%
~ 1989: 7.1%
~ 1993: 5.8%
~ 1997: 3.6%
~ 2001: 1.8%
~ 2005: -0.5%
- The loss of a job is devastating especially with no savings.
- 82% of middle income Americans say there is not much money left over to save after they have paid their bills.
- The primary reason is overspending
Saving is simply: Putting the brakes on spending today so that you will have something to spend tomorrow.
- God told Joseph to save up in the 7 years of abundance so he could make it through the 7 years of famine.
Proverbs 30:24-25
“Four things on earth are small, yet they are extremely wise: ants are creatures of little strength, yet they store up their food in the summer.”
SAVING ADVICE
Limit exposure to spending opportunities.
- Advertisers are pros at getting you to want stuff.
- The more television you watch, the more you spend.
- The more you surf the web, the more you spend.
- The more you look at catalogues and magazines, the more you spend.
- The more you shop, the more you spend.
Cultivate contentment.
- Our consumption-oriented society operates on the assumption that happiness comes from things, and more is always better.
Philippians 4:11-13
I am not saying this because I am in need, for I have learned to be content whatever the circumstances. I know what it is to be in need, and I know what it is to have plenty. I have learned the secret of being content in any and every situation, whether well fed or hungry, whether living in plenty or in want. I can do everything through him who gives me strength.
- Remember, “this emergency fund is not for buying things or for vacation, it is for emergencies only. No cheating” (Ramsey).
- Christmas is not an emergency!
- “Saving money for emergencies is Murphy-repellent” (Ramsey)!
Pray for God to provide.
- We often rush to buy things.
- How often do we pray and wait for the Lord to provide?
- Waiting on the Lord will increase our faith when we see Him answer our prayers.
Freedom Mind-set.
- Meditate on God’s Word
- Memorize some of these verses we have shared.
- Pray and ask the Lord for the needed discipline and persistence needed to reach financial freedom.
- Focus on the destination and go for it!
- Remind yourself of these phrases:
~ Nothing I buy feels as good as reaching true financial freedom.
~ Ten seconds using my credit card, ten moths to pay it off.
~ If I don’t need it, I won’t buy it.
PRACTICAL SUGGESTIONS
Make saving automatic.
Work up to saving 10% of your income.
DEVELOPING A SPENDING PLAN
A spending plan is simply planning ahead for how you will spend your money.
- This seems simple but most Americans do not practice it.
- The average person in our country spends $1.10 for every dollar earned.
It will help you get the big picture of how much you earn and your financial obligations and needs.
- Most have no idea.
- It will help you not to be surprised with quarterly or annual expenses.
Step 1: Record your income and spending for 30 days.
- Keep track of every penny.
- Checks, Debits, ATM withdraws, cash expenses.
To do this, many of you will need to first balance your checkbook.
- Turn it over to Donna and pass out worksheet.
Step 2: Complete the first draft of your spending plan.
- Pass out the Spending Plan Worksheet.
- Take this home and go through your records.
- Write down all your bills and regular expenses.
- Place every expense under one of the categories.
Step 3: Adjust your spending plan.
- You may find out that your spending plan has more outflow than income.
- Make adjustment.
- After tracking your spending for a month, you can go back and make more adjustments.
- The goal is to have a plan for every $1 of your income and every penny of your expenses.
Step 4: Select your system.
- Envelope System: Convert your income into cash each week and place it in categorized envelopes. When the envelopes are empty, you cac spend no more from that category until the next payday.
- Pencil and paper: Standard checkbook and ledger system.
- PC Based budgeting software
- Web Based budgeting software
Step 5: Record and review.
- Refine your spending plan periodically.
- Over time it will become more and more accurate.
PRACTICAL SUGGESTIONS
Become a team!
- Husbands and wives should work together to develop their spending plan.
Genesis 2:24
A man shall ... be joined to his wife and they shall become one flesh.
- This is talking about more than the physical.
- Husbands and wives should work as one.
- The spouse more gifted in record keeping should do the accounting.
- Meet together once a week to examine your progress, discuss challenges, and make adjustments.
- Plan the spending together.
Average and plan for variable income and expenses.
- People with jobs with variable or seasonal income.
~ Start a savings account for this income.
~ Calculate the average income.
~ Schedule a weekly transfer from this account into your checking as your paycheck.
~ Do not withdraw from this savings account for any other reason.
~ You may need to add it in the beginning if you start in a lower income month.
- Expense items that change on a regular basis.
~ Total and divide by 12.
Be creative with holidays.
- Do not underestimate!
- Plan out your giving at Christmas.
- A recent survey discovered that the biggest fear people have at Christmas is Christmas debt!
- Commit to sticking to your spending plan, no matter what!
- Make or buy an inexpensive personalized gift.
- Don’t get caught in the game of matching or beating the cost of gifts given to you.
Get help with gambling.
- This can sink you financially quickly.
- Gambling advertisers target the poor.
- They keep them in poverty.
- “The house always wins”
- Tell someone if this is a problem for you!
- Don’t wait until it has wrecked your life or ends your marriage.
- Join a support group.
Find a coach.
- I will be happy to work with you.
- Check with Crown online.
Use the free online Money Map for additional resources and to track your progress at www.crownmoneymap.org.
YOU CAN DO IT!
Jamie Morgan
Age 27
Agriculture Communications
The financial mentality I grew up with said, “If you want anything out of life, you’re going to have to get into debt for it!” And so I did. By the time I was in my mid-twenties, I had accumulated $3,000 in debt on a mobile home, $9,000 debt on a car, approximately $1,000 on credit cards ad $50,000 on a newly purchased home. That’s a lot of debt to pay off on a salary of around $30,000.
It wasn’t until my cousin and her husband introduced me to Dave that I began to make the change in how I handled my money. They had attended Financial Peace University at a local church and decided to share the CD’s with me. A few hours into the CD’s, the light came on. I knew that I had to get a hold on my finances and start living life differently. I purchased Financial Peace and The Total Money Makeover and began listening online to Dave every weekday.
My most important move in becoming financially free: budgeting. I nearly passed out when I realized how much I was spending on eating out! It took a few months to organize my funds and expenses, but now I’ve become a great budgeter! I give 10% of every paycheck, and I’m currently allotting 49% of my salary to paying off my house. But thanks to careful budgeting and spending, I’ll be able to assign 52% of my paycheck to the house at the turn of the year! Then I will be able to give more and help others find the peace that I have found.
WANT TO HEAR MORE?
You can listen to the Dave Ramsey Show radio broadcast archives for free!
www.daveramsey.com
ASSIGNMENT FOR NEXT WEEK
Bring your spending plan with your income listed and as much of your expenses as you can dig up.
