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1. Personal financial Planning/ Lifelong Financial Plan

Brother and sister hopeful need help to set up a financial plan to get them out of debt.
Setting up a plan is truly half the battle to get through this crisis of theirs. If they know where
they are, what it will take for them to get there. They are more likely to accomplish what they
want. As they set up a financial plan they should consider the six Ps of planning. Proper Prior
Panning Prevents Poor Performance. The hopefuls need to use their personal will, desire, and
discipline and if they do this I know they will be able to achieve the rewards of financial
independence and become independently wealthy.
Through following the ideas in this letter the Hopefuls will be able to learn skills that will help
them in saving, budgeting, accounting, using credit and financial services, making major

purchases, managing risks, investing, and retirement planning.

2. Pay the lord first, and then yourself
First things first successful management in every home begins with the payment of an
honest tithe. If tithing is the first thing out of our paychecks we our financial mismanagement
will be reduced. Not mention there testimony in tithes will grow as well. Bishop personal
financial management isnt just about the money it is going to be about their mind and heart. Do
they really want to fix their debts or just continue to have fun?
After the pay there tithing they need to set a certain amount aside for themselves to invest and
spend. When they do this they will not be as tempted to spend that money that they set aside. To
help them they set up an automatic withdrawal which will take out a certain amount and transfer
that money into a retirement, savings, or an investment account.

3. You cannot retire until your money goes to work.

Hopefuls need to get their money working for them. Right now they are paying interest
on many of their accounts because of this they have gotten themselves into financial bondage. As
they put their money into investments, saving accounts they will begin to collect interest off of
their money. They need to get rid of the interest they owe and begin collecting interest from the
money they save and invest.
4. Net worth
I feel the Hopefuls need to know where they stand with finances. All they know is they
have a lot of debt to pay off and to little income coming in. To help them see how much in debt
they are, they need to find out there net worth. Add all their assets up. What they own, their
liquid assets, investments, personal property, and real-estate. Then they will subtract all there
liabilities. Everything that they owe credit cards and loans. Once they figure out their net worth
they will be able to physically see exactly how much they owe.
5. Budgeting
In order for the hopefuls to get out of debt they have to budget their money. Budgeting is
essentially a game plan that encourages discipline and direction in managing finances. If they
hopefuls budget there money they will be able to do three things. Spend less money, Spend for
needs rather than wants, and lastly save for emergencies, and investments. Hopefuls need to plan
a budget for each month over the next year. They can go on excel and look up a budget sheet to
help them get started.
6. Budgeting Methods
There are many different budgeting methods that the Hopefuls can use to help them out. I
would strongly suggest they use the written method. This is one that is strongly suggested by
financial experts. What they will do is write down every single expense. By doing this they will

be able to exactly where there money goes. When they write down what they spend they will be
able to feel more in control. They can use three items to help them keep track of what they have
spent. A Notebook, check or a computer. The Computer will be the easiest and most detailed way
of keeping track where there money goes each month.
7. Basic investment Strategy Rules
Once the hopeful family is out of debt they should invest some of there money to help
them stay financially steady. They will need to follow four basic investing rules. As they invest
they will need to have an emergency savings fund so if something ever happens they will not
have to liquidate any of there investments quickly. Then Will need to determine how much of a
risk they are willing to take. I suggest that they not take to high of a risk in their investments as
they are getting older and shouldnt be as wasteful with their money. Have them avoid the stock
market. Third they need to take more of a long-term approach. Lastly do not let current events or
economic determine what they should invest in. Try not to follow the trend.
8. Diversify
The most important thing for the hopefuls to know is not to put all their eggs into one
basket. They need to buy a broad range of securities in different industries. That way if when
some markets are down others will be up. It is a lot less of a risk for them investing if they
diversify.
9. Mutual Funds
The best way for the Hopeful family to invest in my opinion is to go into mutual funds. It
will be a company that will pool all the small money of investors and buy a diversify portfolio of
stocks, bonds, or other securities. Its great for them because they are not putting all their money
into one basket and they will have professional investors that will invest their money for them.

Now there will most likely be a fee either on the front end or the back end. With them having a
family, they shouldnt take risks and this would be the smartest way for them to invest their
money. They will get diversification and management of the investments.
10. Consumer Credit
Paying cash instead of credit. Always is the best way to go financially. As you can see
with the hopefuls going into lots of debt with credit cards. Not being able to even pay some of
their credit cards each month and have collections agencies calling. Consumer credit is what the
family did and need to get away from. Their goal needs to be spending less money than they
earn. Let their savings and investments go to work for them. As a Consumer the hopefuls need to
buy what they need and what they can afford to buy.
11. Saving versus Borrowing
Saving your money before you buy something is by far the best way to go. When you
save your money you are able to collect interest off of it. Which means they would of pay less
from their pocket and own it on a shorter time then if they would have if they took out a loan or
put it on a credit card. Saving money takes discipline to do. If the Hopefuls are serious about
turning their financial situation around the need to stop charging money to these cards and start
saving it. They need to do what we discussed earlier in the paper and be disciplined. Only but
what is needed for them.
12. Advantages of credit
Now once the Hopefuls get out of debt they can should use their credit card cause there
are some advantages to using a credit. We dont want the Hopefuls to lose their money and if
they get there credit card information stolen they will usually get their money back compared if

its their debt card. They will be able to build up the credit score as they use it and pay it off right
away. Some of their credit cards can give those rebates, cash bonuses or a discount on a future
purchase. They need to remember using their Credit card isnt bad but not to carless not to spend
money they do not have.
13. Critical Financial decisions
Hopefully family please do not think that your self-image is based upon the car that you
drive. You are not your car. Be smart the way you use your money when making a critical
financial decision like buying a car. Our goal is to help you increase your net worth. So be
careful when making those types of decisions that you dont significantly decrease your worth.
This world today we depend on transportation, but we do not depend on expensive transport. Be
smart with the way you spend your money in those crucial moments.
14. Purchasing New versus Used Cars
Right now the Hopefuls seem to have two reliable cars. When the time comes that they
will need to get another they will need to decide if they want a new or a used car. There is good
and bad to buying new or used. Lets start with the new cars. Good because you know they will
be reliable to drive and should last you a good amount of years. The main bad thing about buying
new cars is the depreciation. Most new vehicles will depreciate by as much as 50 percent within
just the first two years of ownership. Used cars the good and bad are just the opposite. You dont
know what you will get until you start driving it for a while. The depreciation of the car will be
very minimal. My opinion on buying a car is to go used it cheaper but to a 2 to 3 year old car
with low miles on it so it wont depreciate fast and its more reliable.
15. What can you afford?

They will need to learn how to figure what they can be able to afford with their income.
Simple way for them to know this is that your affordable debt is 15%-20% of your take home
pay. It will be great know in advance the total you can spend so will be able to see and be
tempted by spending more.
16. Types of loans
The Hopeful family already has a home so want to talk about them refinancing their
home. Why would we want them to consider refinancing? They would be able to take advantage
of a decrease interest rate and possibly provide funds to remodel your home down payment for a
car. I dont know how long they have owned their home but if only a few years and the interest
rates have dropped by 1% or more they should consider refinancing there home. Will be able to
save them money in the long wrong.
17. Amortization
Amortization will help the hopefuls see how much money they would save if they paid a
little extra on their mortgage. Doing this is a really good way to increase their personal wealth.
Thats what we want to do for them. Amortization will generally have four columns. Month you
are making the payment. The monthly payment amount. The amount of the payment applied to
interest due for that month. The amount of the payment applied to the principal balance. The
remaining balance of the loan after the principal payment for that month. Now what they will
need to make an amortization sheet. The original amount of the loan, the interest rate, the length
of time for the loan and the monthly payment amount. If they add just 100 dollars to their
monthly payment they will be able to cut their mortgage by a couple of years.

18. Selecting a home

If they plan to move they need to do three things to help them make a good investment on
a home. Location it will determine the value of the home both buying and selling. Condition they
should hire an inspector to make sure the home is good. Also have an appraiser come as well so
you can establish the current market value of the home. Lastly hire a good real estate agent. One
will be able to help you in finding a home you like and is in your price range.
19. Home and Property insurance
The Hopefuls without a doubt need insurance in their life. Home insurance is huge it will
protect your home and its contents. It will cover against loss or damage to the home. Your
personal property will be covered under this as well. This will be a great investment just cause
you will never know what can happen could have a fire and we dont want them to lose
everything cause they didnt have home insurance.
20. Auto mobile insurance
Auto mobile insurance is a must have cause well its illegal not to have when you drive a
car. But I think the most important reason you need it is if your get into an accident and its your
fault your insurance will cover some if not all of the person medical bills. This is not something
you may never need but it is a wise investment as well. Right now for your family I would go
with the cheapest monthly payment and higher deductible. It will save you money if you are a
save driver but you need to save your money and make sure that you will have the deductible at
any moment.

21. Health insurance

Having insurance doesnt increase your money growth. It mainly helps you stay
financially stable in life. Hopeful family needs to feel financially stable and insurance will help
them with that. Health insurance for the family will help relieve stress and between all the
doctor, and dentist visits it great to have for the hopefuls. It will bring them a great deal comfort
and security in their lives.
22. Ultimate Financial Independence
Hopeful family wants to have the ultimate financial independence which is having
enough money to live comfortable for the rest of your life and dont have to work. In the
December, 1976 Ensign, President N. Eldon Tanner stated for those who have prepared, the
declining years of their lives can be the most enjoyable. This is my goal for the family and I
know that doing the things talked about in this paper will help them to become ultimate financial
independent.
23. How much do you need?
We need them to ask themselves How do I want to retire? By the time they would retire
should be able to. Their mortgage, transportation, food, employment, and taxes will be paid off
or be paying the bear minimum. The Hopefuls will be able live on about 75% of their preretirement income. The Hopefuls will need to figure out all of their retirement incomes and see if
it will reach their goal. Just like earlier they need to know how much they want to retire with and
start planning their retirement now.
24. Personal Retirement plans

They should not only have a 401 k but also invest in an IRA. With this they wont be able
to really touch the money because there are some withdrawal restrictions. If they start investing
now with just $200 a month for just 30 years at 10% interest they will be able to have nearly half
a million dollars just on that account alone.
These twenty four steps are the way for the hopeful family to get out of debt. It help them
be able to stay out debt the rest of their lives and they will be able to live comfortable in
retirement.