Personal Financial Management Instructional Course Workbook

126 Pages·2006·1.05 MB·English

by  James Parrillo

Stand Sure Information Services, Inc.

Personal Financial Management
Instructional Course Workbook

A Workbook to Accompany www.pfmcourse.com

Personal Financial Management Instructional Course:
A course for debtors to comply with Bankruptcy Abuse Prevention Consumer Protection Act of 2005

Curriculum Writers:
Glynda P. Dancy-Edwards CSW, MSW, CAS
Miriam Ehtesham, MS Ed.
Carlos X. Leal, MS Ed. Curriculum, SAS

Contributing Editors:
Cathy J. Bardenstein, Esq.
Tara Cating
Charles Hall
James Parrillo

Stand Sure Information Services, Inc.
16 Arnold Park
Rochester, New York 14607
Acknowledgments
Stand Sure Information Services, Inc. would like to extend our thanks and gratitude to the
curriculum and website development teams for their commitment to high quality
instruction.

Statement of Service
Stand Sure Information Services, Inc. is committed to providing a quality educational
opportunity for debtors seeking to satisfy their legal responsibility to comply with the
Bankruptcy Abuse Prevention Consumer Protection Act of 2005 (BAPCPA).

Trademarks, Copyrights and Patents
Product names, graphics, and references mentioned in this document may be trademarks
or registered trademarks of their respective companies and are hereby acknowledged.

This workbook, as well as the website pfmcourse.com are trademarks of Stand Sure
Information Services, Inc. and are also protected by copyright and patent laws of the
United States of America.

© 2006 Stand Sure Information Services, Inc. All Rights Reserved ii
Welcome!
We thank you for choosing the Stand Sure Information Services, Inc. Personal Financial
Management Instructional Course. We want to extend to you our best wishes for a
healthy financial future.

This course satisfies the mandate by the United States Bankruptcy Trustees for debtors to
take a Personal Financial Management Course. When you have completed the course,
you and your bankruptcy attorney will receive a Certificate of Course Completion to
provide to your bankruptcy court.

We specifically designed this web-based course to provide you with a user-friendly
experience. You can work at your own pace, and in the privacy of your home, office or
local library.

The course material will be presented in different ways that will allow you to watch video
segments, as you read the course text either online or in your workbook. We believe that
this approach will help you to better comprehend the course material.

Our course also allows students to enlarge text for easier viewing. Students who require
a TDD/TTY service may contact us via the following toll free relay service number:
1-800-662-1220.

Please know that we are here to answer your questions about the course material. We
have provided you with several user-friendly self-help sections to assist you with any
technical issues, account problems, or billing issues as well as a forum to ask questions
about the course instructional material. These are accessible through the help forum
section: www.helpcenter.pfmcourse.com

Each lesson provides additional Internet links, resources, bonus exercises and reflective
questions to assist you in mastering each course topic.

The course fee includes a downloadable and printable workbook and additional
worksheets. A professionally bound copy of the workbook is also available for an
additional fee. Please visit http://www.pfmcourse.com for further ordering information.

Our team is constantly looking to improve our web-based services. Please take a moment
at the end of this course to provide us with your feedback and suggestions for
improvement by filling out our course survey.

We believe that you will find this course to be an informative and helpful educational
resource as you continue your journey on the road to financial health.

Sincerely,
Glynda Dancy-Edwards James Parrillo

President – Educational Services President – Website Services
© 2006 Stand Sure Information Services, Inc. All Rights Reserved iii
Contents

Welcome and Workbook Instructions

Part I Making Healthy Financial Decisions…1

Introduction Bankruptcy – Why Me??…2
Causes of Bankruptcy…2
Exercise: Reflective Questions…3
Implications of Bankruptcy …4
Chapter 1 Decision Making Skills…5
Knowledge is Power…5
Assessment…5
Analysis…5
Practical Application of Skills…5

Chapter 2 The Value of Money…6
What Exactly is Money?…6
Exercise: Reflective Questions…7
Case Study Analysis: Sarah…7

Chapter 3 Understanding Your Income and Paycheck…9
What is Income?…9
Paycheck Terminology Defined…9
Calculating Your Weekly and Monthly Income…10
Paycheck Taxes and Withholdings…11
Self-Employment Taxes and Withholdings…12
General Questions About Withholdings and Taxes…13
Sample Paycheck…16
Calculating Your “Real” Monthly Income: The Costs of Working…17
Case Study Analysis: Yolette…18
Exercise: Reflective Questions…19
Worksheet: Calculate Your Real Monthly Income…20

Chapter 4 Understanding Your Needs and Wants…21
Need and Wants Defined…21
Assessing Your Own Needs and Wants…21
Prioritizing Your Needs and Wants…22
Case Study Analysis: Realistic Needs…23
Case Study Analysis: Realistic Wants…24
Worksheet: Assessing Your Realistic Needs and Wants…25

© 2006 Stand Sure Information Services, Inc. All Rights Reserved iv
Chapter 5 Decision Making: The Informed Consumer…26
Making Effective Decisions…26
Educate Yourself About The Product…26
Educate Yourself About The Service…27
Know Your Rights As A Consumer…27
Ways to Comparison-Shop…28
Case Study Analysis: Chris and Jim…28

Part II Financial Obligations:
Where Does All Your Money Go?…31

Chapter 6 Financial Obligations: Expenses…32
Understanding Out-Go…32
Types of Expenses …33
Fixed…33
Variable…33
Periodic…33
Emergency…33
Worksheet: Identifying Types of Expenses…34
Saving for Planned Expenses…35
Emergency Expenses…35
Planned Expenses…35
Periodic Expenses…35

Chapter 7 Insurance: Protecting Your Financial Health…36
Insurance: An Investment in Your Future…36
Case Study Analysis: Amani and Kim…36
Tips for Selecting Insurance…37
Basic Categories of Insurance Coverage …37
Health Insurance: Types of Coverage…38
Factors That Can Affect The Cost of Health Insurance…40
Automobile Insurance: Types of Coverage…40
Factors That Can Affect The Cost of Automobile Insurance …41
Home and Renter’s Insurance: Types of Coverage…42
Factors That Can Affect The Cost of Home and Renter’s
Insurance…44
Life Insurance: Types of Coverage…44
Factors That Can Affect The Cost of Life Insurance…45
Disability Insurance: Types of Coverage…45
Factors That Can Affect The Cost of Disability Insurance…46

Chapter 8 Financial Obligations: Debt…47
What is Debt?…47
© 2006 Stand Sure Information Services, Inc. All Rights Reserved v
The Fair Debt Collection Practices Act (FDCPA)…47
Ordinary Debt vs. Potentially Dangerous Debt…47
Worksheet: Identifying The Warning Signs of Debt…48

Part III Setting and Achieving Goals…49

Chapter 9 Your Financial Future…50
Methods For Achieving Your Financial Future…5
Worksheet: Define Your Financial Vision…51

Chapter 10 Envisioning Your Financial Future = Goal Setting…53
What are Goals?…53
Types of Goals: Short Term, Mid-Range and Long Term…53
Why Set Goals?…54
Things to Keep in Mind When Setting Goals:…55
Be Realistic…55
Have A Positive Attitude…55
Tracking Your Goals…56
Case Study Analysis: Terel and Emily …57
Exercise: Developing Your Goals…59

Part IV Developing and Implementing Your Budget…63

Chapter 11 Developing Your Budget…64
Budget Development Skills…64
Keeping Adequate Financial Records…64
Methods of Record Keeping…64
Budgeting – You Have Been Doing It Since You Were Young!…65
Developing Your Budget or “Spending Plan”…66
Case Study Analysis: Rebecca and George…66
Worksheet: Develop Your Budget…69

Part V Money Management…74

Chapter 12 Savings, Checking and Investing …75
What is a Savings Account?…75
What is a Checking Account? …76
What Are Interest Bearing and Investment Accounts?…76
What Are Retirement Accounts and Plans?…77

© 2006 Stand Sure Information Services, Inc. All Rights Reserved vi
Part VI Wise Use of Credit…78

Chapter 13 Benefits of Credit…79
Loans …79
The Truth-In-Lending Act …80
The Equal Credit Opportunity Act (ECOA)…80
Mortgages…80
Conventional Loans and Government-Backed Loans…81
Credit Cards: What Every Consumer Needs To Know…82
Benefits of Credit Cards…82
Secured Credit Cards and Unsecured Credit Cards…83
The Truth About Minimum Payments…84
Understanding Credit Card Offers…84
Choosing A Credit Card: Factors To Consider…85
Interest Rate…85
Grace Period…86
Late Payment And Other Fees…86
Balance Calculation Methods…86
How To Read The Fine Print…87
Sample Credit Card Offer…88
Questions to Ask When Considering A Credit Card or Loan
Offer…89
Alternatives to Credit Use…90
Use Cash…90
Debit Cards…90
Personal or Bank Certified Checks…90

Chapter 14 Credit Reports and Credit Scores…92
Checking Your Credit Rating…92
Why It’s Important to Check Your Credit Rating…92
All About Credit Reports: What Every Consumer Needs To Know…92
How To Get A Free Copy of Your Credit Report…93
What’s Included in Your Credit Report…93
Sample Credit Report…94
All About Credit Scores: What Every Consumer Needs To Know…98
Fixing Inaccuracies In Your Credit Report…99
The Fair Credit Reporting Act (FCRA)…100
Stopping Those Credit Card Offers…100
“Quick Credit Repair” Scams…100

Conclusion Closing Statement: Your Journey Towards Financial Health…101
The Road to Rebuilding Your Credit…101
Evaluation: Student Survey Form…103

© 2006 Stand Sure Information Services, Inc. All Rights Reserved vii
Part VII Appendix

Answer Key to Worksheets, Exercises and Case Studies
Supplemental Worksheets
Additional Web Links and Resources
Reference List

© 2006 Stand Sure Information Services, Inc. All Rights Reserved viii
Workbook Instructions

This workbook was developed as a companion to the Stand Sure Information Services,
Inc. Personal Financial Management Instructional Course (PFM Course).

The workbook will allow you to take notes throughout the course. You can choose to use
either the online printable worksheets, or the blank worksheets provided in this
workbook.

The PFM Course Workbook is also available for use as a future reference to the course
material.

The United States Bankruptcy Trustees have outlined four major areas of personal
financial management that must be covered by all Trustee approved educational
institutions. The four major areas are as follows:

 Budget Development
 Money Management
 Wise Use of Credit
 Consumer Information

This course covers these four areas extensively, and provides additional Internet links for
students who seek more in-depth information as needed.

This course is divided into eight parts:

Part I Making Healthy Financial Decisions
Part II Financial Obligations: Where Does All Your Money Go?
Part III Setting and Achieving Goals
Part IV Developing and Implementing Your Budget
Part V Money Management
Part VI Wise Use of Credit
Part VII Appendix

If you are reading this document you should have already:

1. Registered for the Course by providing personal information, including your
Social Security and Bankruptcy Case Number.
2. Read and agreed to the Statement of Service, Terms of Service and Intent
3. Printed this Workbook from the homepage http://www.pfmcourse.com

Let’s Begin!
© 2006 Stand Sure Information Services, Inc. All Rights Reserved ix
Part I
Making Healthy Financial Decisions
© 2005 Stand Sure Information Services, Inc. 1