This work shop was presented by Bro. Matthew Tate during the fifth district family conference in April, 2014
BEGINS WITH A MADE UP MIND TO “STICK TO YOUR BUDGET”
What does DEBT FREEDOM actually look like?
The evidence of debt freedom is experienced when one’s only financial obligation is to provide for only his basic needs for survival.
Paying off existing debts
One must first have an absolute commitment for getting out of debt. The desire to borrow, as well as, to purchases items which are not necessary for survival must be put to death. This reduces the continuation of indebtedness until one is debt free, other than for survival necessities.
Preparing for “Rainy Day Adversities” – SAVINGS
Saving are only realized when you have an excess of income that is not obligated to a Debt. But it only becomes real when you put it in a secure area, considered to be under lock and key and you cannot fine the key until that rainy day occurs.
Learn to distinguish between “wants” and Needs.”
Weighing values between wants and needsis very instrumental in Sticking to our budget. Wants can be very detrimental to a budget based upon our desires with respect to our ability to pay. Needs are more friendly to our budget because they address our desires with a relation to the survival domain.
Avoid charging or making loans for small items – save for them.
If we have mastered the techniques of saving for a “Rainy Day,” that does not protect us from reverting back to getting back in debt. Once out of debt and we’ve mastered the art of saving, remember “it is the saving and only the saving that keeps us out of debt.”
Situations that may call for borrowing money
- Purchasing a home
- Home repairs
- Purchasing automobiles
- Education (college)
Now comes the realization that there will be needed item costing large sums of Money. For these purchases, we must develop plans for how they will be accomplished. Goals and objectives must be put in place so that when these items are put in the budget; they will not create a deficit.
Establishing a good credit record
- Establishing relationship with lending institutions
- Pay notes on time (What if you can’t pay on time?)
The ability to establish good credit depends largely upon the available revenue in one’s budget. To pay an obligation of indebtedness based On terms and conditions shall be well understood before any agreement is made. If the note comes due at a time when the borrower does not have the payment; at least, the interest on the note should be paid according to the terms of agreement.
Best Institutions for Borrowing Money
The best institutions for borrowing money are those where we have memberships. Examples are Credit Unions. Their interest rates are established by membership through a board of directors. Other good institutions for borrowing are banks where we have our saving accounts. These banks can secure commercial loans which are subject to federal regulations requiring a 2% differential in the interest rate, that is, the institution can charge the borrower only 2% above the interest rate that is received on his saving account that is used to secure the loan.
- Best type of loans
- Interest rates
Wisdom in using CREDIT CARD(S)
Stick to your budgeted allowance for your card and pay off the balance in FULL at the end of each billing cycle! Be conscious of “due date,” late fees are costly.
Setting up Savings and Investments
- Rainy day Savings – Pass Book Savings
- Long Term Savings – CD’s or regular IRA’s
- High risk – Stocks
- Low risk – Shares, Mutual funds
- No risk – CD’s, Roth, IRA’s, 401K, Real estate
Preparation of Retirement
Preparation for your retirement should begin when you are first employed and continues throughout your years of employment. Count up all possible contributions to your retirement funds: Social Security, 401K, company retirement funds etc. Consider the type life style these will afford you. You may want to consider adding additional funds to your company’s contributions or other retirement funds.