MS
More than 400,000 people live with MS—an unpredictable disease that can lead to significant life changes and financial hardship. This course helps those with MS learn the basics of personal financial planning and how to maintain greater financial independence. Topics include basic financial planning, managing medical bills, housing modifications, work accommodations, and estate planning.
Content
Money Management: Maintaining Financial Independence
Target Audience: People with Multiple Sclerosis (MS) Audience Profile
To understand how to assist people with Multiple Sclerosis (MS), it may be helpful to get a better understanding of the disease, who it affects, and some of the challenges it provides. The National Multiple Sclerosis Society states that, “MS is a chronic, often disabling disease that attacks the central nervous system (CNS), which is made up of the brain, spinal cord, and optic nerves. Symptoms may be mild, such as numbness in the limbs, or severe, such as paralysis or loss of vision. The progress, severity, and specific symptoms of MS are unpredictable and vary from one person to another.” According to The Multiple Sclerosis Foundation, “Multiple Sclerosis (MS) is an illness diagnosed in more than 350,000 persons in the United States today.” MS is more common in women, appears more frequently in Caucasians than Hispanics or African Americans and is relatively rare among Asians and certain other groups. Ninety percent of MS patients diagnosed are between the ages of 16 and 60; but MS can make its first appearance in early childhood or after age 60. Although MS is a progressive disease, the rate of progression differs from one person to another. The hallmark of MS is its unpredictability—which means that a doctor can’t predict with any certainty how far or fast a person’s MS is going to progress or final outcome. Since no two people have exactly the same experience of MS, the disease may look very different from one person to another. Some MS patients are able to continue employment with few, if any, accommodations, yet others are forced to quit their jobs. Some MS patients are able to live well without assistance, while many rely on assistive technology to help them carry out their daily activities.
Program Overview
Patients with MS are faced with so much that is unknown. However, one thing that is usually true for MS patients is that they will probably not die from MS. Instead, they may live for many years after being diagnosed. As a result, maintaining financial independence and security is a high priority for people living with such an unpredictable disease as MS. Taking control of finances is a top priority for many MS patients, yet like many people, MS patients may lack the basic financial skills to manage their money. The key to this short program is to encourage participants to manage their money so they can maintain their financial independence. This 60-minute program is designed to provide participants with a few tools to take a financial inventory, develop a spending plan and select a professional financial planner
Preparation:
Review this guide and complete your own set of the accompanying worksheets.
Money Management 1
Project Independence – MS
Review the suggested length for each topic noted as (10) or (15) and so on. This session is designed to be 60 minutes (1 hour) from Welcome to Wrap. Consider your own health. Have you been seriously ill? Do you know anyone who has MS? How would you feel if you had to deal with an unpredictable disease? Would you be worried about the future? Think about your own money management behavior. Do you conduct a financial inventory often? Are your financial affairs in order so that you could handle the strain of a potentially debilitating disease? Are there some money management lessons learned from your own experiences that may be helpful to share? Consider that when it comes to talking about money, sharing your own successes and challenges may be more engaging and effective than appearing to be lecturing.
Materials Needed:
Flip chart and easel or marker board; markers Pencils for participants Copies of A Financial Inventory worksheet Copies of Monthly Spending Plan worksheet (be prepared to provide at least two to each participant) Copies of Questions to Ask… information sheet Copies of My Action Plan worksheet
How to Facilitate This Session Welcome
(8) 1. Introduce yourself and express your pleasure in sharing money management tools that can be used to maintain financial independence. Have each participant introduce him/herself and share one financial worry that he/she is experiencing. List the worries on the flipchart or marker board. Share the program objectives and tie them back to the list of fears. • Conduct a financial inventory • Create a monthly spending plan • Select a professional financial planner • Commit to an Action Plan Suggest to participants that just as their MS symptoms are not exactly the same as someone else’s MS symptoms, their financial situation is unique. An important part of navigating MS is managing money and planning for the future. ?Ask participants how many of them feel a bit overwhelmed by the prospect of getting a firm handle on their finances.
Financial Inventory
(10) 2.
Project Independence – MS
Money Management
2
Explain the best place to start is by conducting a financial inventory. It’s important to know what they own and what they owe. In addition, they will need this information as they plan for future expenses or if they need to apply for any benefits that are based on financial need. Distribute A Financial Inventory worksheets. Review the instructions and suggest that as they complete their own worksheet they should take into consideration the IRS’s definition of value. Explain that they can go online to www.irs.gov for more details. Another consideration is to obtain a professional appraisal of valuable assets, such as their home, jewelry, artwork, and/or other collectibles. Go through a few of the categories and answer any questions. ?Ask participants if they use a spending plan or budget every month.
Spending Plans
(20) 3. Suggest that a financial inventory is a snap shot of everything you own and owe. It’s very useful in planning for the future. However, it doesn’t provide all the information you’ll need to maintain your financial security. ?Ask participants what would be helpful on a daily, weekly, or monthly basis? Explain that the best way to know how much money you need to live on every month is to create a Spending Plan. Distribute Monthly Spending Plan worksheets. Suggest that it’s important to have an accurate picture of sources of income and the exact amount(s) they can expect each month. Review the sources of income listed and check to see if there are any sources missing based on participant responses. Explain that many people have no idea where their money goes. Listing your expenses is the only sure way of tracking where your money is going. Review the types of expenses listed and answer any questions. Emphasis the importance of listing savings as an expense. Suggest that if you make it a point to pay yourself first, you will be able to build up your savings and maintain your financial independence. Remind participants that developing a savings habit is more important than the actual amount of money deposited each month. Every penny really does count! Discuss the comparison of income to expenses. Emphasize the need to revise your Spending Plan. If you have more money left over, then increasing your savings expense is a great investment in your future. If you come up short, you will need to take a hard look at your spending habits.
Money Management 3
Project Independence – MS
Stress the importance of considering ways to cut expenses or decrease expenses. Remind participants that managing money is all about making wise choices. ?Ask participants if they are currently working with a professional financial planner.
Selecting a Financial Planner
(15) 5. Suggest that as you begin to invest in your future to meet your long-term financial goals, you may want to seek the help of a professional. It’s important to understand the various types of investment professionals out there, the type of advice they give, if they need to be licensed or certified, how they get paid, and the breadth of advice they can provide you. Pair participants and ask each pair to list the types of investment professionals and what they know about each type. Assure participants that it’s OK if they feel they don’t know much. Allow 6-8 minutes for pairs to create their lists. When time is up, ask for a pair to volunteer and share one on their responses. Write the pair’s response on the flipchart or marker board. Proceed to call for additional volunteers to add to the list until the groups’ have exhausted their responses. Check the participants’ list and responses against the information provided below:
•
Stock Broker: A person who buys and sells investment products on your behalf, usually for a commission. A stock broker can advise you on specific investments, such as stocks, bonds, and mutual funds. S/he must pass an examination to obtain a broker’s license, be registered with the Financial Industry Regulatory Authority (FINRA), and work for a brokerage firm that must be registered with the Securities and Exchange Commission (SEC) and FINRA. Investment Adviser: An individual who receives payment to either provide investment advice to individuals or manage a portfolio of investments, such as a mutual fund. Investment advisers receive payment in a variety of ways: as: 1. 2. 3. 4. 5. A percentage of the assets they manage for you An hourly fee, A fixed fee A commission on investments they sell to you, A combination of these.
•
Project Independence – MS
Money Management
4
Advisers must register either with the Securities and Exchange Commission (SEC) or their state’s securities agency.
•
Financial Planner: An individual who receives payment for helping you develop a strategy for managing your money. Financial planners can differ greatly in the quantity and quality of services they provide. Some planners will guide you through decisions you have to make for every aspect of your financial life: savings, investments, insurance, taxes, education, retirement, and estate planning. Financial planners typically are paid in the same ways as investment advisers. Because no federal or state agency regulates financial planners, many become certified by the Certified Financial Planner (CFP) Board to establish credibility with their clients.
Note: The three investment professionals just described also use titles such as financial consultant, financial adviser, or investment consultant.
•
Accountant: A person who receives payment, usually at an hourly rate or as a fixed fee, to inspect and audit financial records for individuals or companies. Accountants also prepare tax returns and provide tax planning, and to some degree, financial planning. Each state has an accountancy board, which requires accountants to pass an examination before issuing them licenses to practice accounting in their respective states as certified public accountants (CPAs). Accountants are subject to standards for ethical behavior under state law. Insurance Agent: A person who sells life, health, or property insurance policies and other insurance products, such as annuities, usually for a commission. Insurance agents must be licensed by the state in which they sell.
•
Stress that before you meet with an investment professional, you should draw up a list of questions. You should always meet face-to-face! Distribute Questions to Ask… information sheet. Review the four areas of concern and the suggested questions. Answer any questions. Emphasize the information provided in the “Note” section. Use stories from the recent news including Bernie Madoff and his Ponzi scheme. ?Ask participants if they feel that the tools discussed today will help them manage their money.
Project Independence – MS
Money Management
5
Wrap (6) 6.
Review the list of worries and note which ones were addressed and which ones will need to be addressed at a later time. Review the topics covered in the session: Taking an inventory of your financial situation Creating a monthly spending plan Developing a debt reduction plan Selecting an investment professional Remind participants to complete their My Financial Inventory sheets and to create their Monthly Spending Plan. Distribute My Action Plan worksheets. Encourage participants to take a few minutes to complete their worksheets to ensure that they get started immediately to maintain their financial independence. Thank participants for their attendance and let them know how much you enjoyed spending an hour with them. Provide them with any additional information as agreed upon with your agency contact.
Project Independence – MS
Money Management
6
A Financial Inventory
Directions: Take an inventory of your (and your partner’s) assets and liabilities. Fill in the information as accurately as possible. If you have to estimate, use the Internet or newspaper to get a reasonable idea of the value of the item.
Assets
Item
House Spouse/Partner Mine Ours Vehicle (s) Spouse/Partner Mine Ours Checking accounts Spouse/Partner Mine Ours Savings accounts Spouse/Partner Mine Ours Stocks Spouse/Partner Mine Ours Mutual Funds Spouse/Partner Mine Ours Retirement Funds (401 (k)s, IRAs) Spouse/Partner Mine Ours Furniture Artwork Jewelry Rental property Time shares Business Spouse/Partner Mine Ours Other:
Name/Account #
Value $
Project Independence – MS
Money Management
Liabilities
Item
Home Mortgage Spouse/Partner Mine Ours Car payment(s) Spouse/Partner Mine Ours Credit card debt Spouse/Partner Mine Ours Personal loans Spouse/Partner Mine Ours Business loans Spouse/Partner Mine Ours Other loans Spouse/Partner Mine Ours Other: Spouse/Partner Mine Ours
Name/Account #
Amount Owed $
TOTALS:
Spouse/Partner assets My assets Our assets Spouse/Partner liabilities My liabilities Our liabilities
NET WORTH (assets minus liabilities) Spouse/Partner’s Net Worth My Net Worth Our Net Worth
$ $ $
Project Independence – MS
Money Management
Monthly Spending Plan
Estimate your monthly income:
Monthly Income Sources
Source
After-tax wages After-tax wages from spouse’s income Tips or bonuses Alimony/maintenance payments Child support Unemployment compensation Social Security or Supplemental Security Income Retirement plans Private disability insurance payments VA Benefits Public assistance Food stamps Interest/investment income Other
Expected per month
Actual per month
Total Monthly Income
$
$
Project Independence – MS
Money Management
List your monthly expenses. If you have not kept track of your expenses in the past, use this sheet to keep an accurate record of your expenditures beginning today! Next month, complete a new worksheet and accurately list your expenses.
Monthly Expenses
Source
Rent/mortgage Second mortgage Line of credit Utilities (heat, electricity, water) Land line and/or cell phone Internet access/cable Groceries Car payment, gasoline, parking Bus fare Insurance (car, homeowner’s, renter’s, life) Personal assistance care Prescription drugs, medical supplies, and equipment Treatments or therapies (massage, exercise classes, alternative treatments, supplements, etc.) Doctor/dentist bills Home adaptations or improvements Child care, child support payments Alimony/maintenance payments Pets Loan/credit card payments Clothes Snacks/meals eaten out Personal (toiletries, etc.) Entertainment (movies, eating out) Charitable donations Savings for emergencies Savings/retirement plan contributions Miscellaneous (gifts, vacations, classes) Other
Expected per month
Actual per month
Total Monthly Expenses
$
$
Project Independence – MS
Money Management
Now that you have identified your sources of income and listed your expenses, it’s time to compare the two and discover how much money you have left over every moth. Compare Income and Expenses Actual monthly income (Minus) actual monthly expenses
$ _______________________________ - $ _______________________________ $ _______________________________
Do you have money left over? Great! Go back and increase your monthly savings expenses to build financial security. Are your expenses greater than your income? Perhaps it’s time to change some spending habits.
Change Habits Review your expenses. Are there any that you can cut out completely? _____________________________________________________________________ Which expenses can you possibly decrease? _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ What will you actually do to cut expenses? _____________________________________________________________________ _____________________________________________________________________ Review your income. Is there any opportunity to increase your income? ______________________________________________________________________ ______________________________________________________________________ Now, if you decided on ways to decrease your expenses, go back and make the necessary corrections to your spending plan. Re-calculate your income minus expenses. Are you satisfied with the results? Use your Spending Plan for the next month. Write down how much you actually earned and how much you actually spent. If there is a difference between what you expected to earn and/or spend and what you actually earned and/or spent, carefully examine the differences. Make whatever adjustments are necessary on next month’s Spending Plan. You will soon become skilled at developing a sound Spending Plan and it will help you in reaching your long-term financial goals.
Project Independence – MS
Money Management
Questions to Ask…
There should be a good fit between you and the financial advisor you choose to handle your financial affairs. Interview at least three or four individuals. Plan to spend between 30 and 60 minutes with each one. Before you meet with an investment professional, you will want to draw up a number of questions to help you make the right selection. Here are four areas to consider along with a few questions— feel free to add more questions! Education and Training A college degree is not required of financial advisor, although many have advanced degrees. Some professionals are required to be licensed, certified, or complete extensive training. Know what credentials your financial advisor must have before you invest. Visit FINRA’s professional designation database at www.finra.org. Find out the education and experience various investment professionals must have, the examinations they must pass, and if they are in good standing.
• • • •
What type of education and training do you have? What examinations did you take? Did you pass them? What licenses or certifications do you have? May I see them? Are you registered with the SEC, a state, or FINRA?
Experience Ideally, you’ll find a financial advisor who has experience working with individuals with MS. A professional who understands your situation dealing with an unpredictable disease could serve you well. Most importantly, you want to be sure, without a shadow of a doubt that you end up working with a legitimate upstanding professional.
• •
What is your experience working with individuals who have MS? Are you familiar with medical plans, government and private disability benefits, and life insurance? Are you familiar with the legal rights of people with a disability like MS? How long have you been in the investment business? Where did you work prior to this position? What is the status of those firms today? Have you ever been charged with any wrongdoing or disciplined by a regulator?
• • •
•
Project Independence – MS
Money Management
Approach to Investing Determine whether a financial advisor will act in your best financial interest. That means respecting your financial goals, tolerance for risk, and need to access your money, if necessary.
• •
What is your investment philosophy? Can you give me the contact information of long-term clients? Will I be able to speak with them? How often will you review my finances? Do you recommend certain products? What are all the products and services you offer? Knowing my financial goals, how would you approach helping me meet them? How do you decide how my money should be allocated?
• •
• •
Fees and Commissions
•
How do you get paid (fee, commission from sale of financial products, fee plus commission)? On the investment products you sell, what is the rate of commission you get paid? Would I pay commission when I buy an investment or when I sell it? Does anybody else get paid when I purchase an investment or are you rewarded with a prize for selling an investment?
•
• •
Note:
For any financial planner you are interested in working with, do a background check before your first transaction. Look for proper registration, licensing, or certification, as well as disciplinary history. Do not simply rely on family and friends for a recommendation! Remember, your goal is to identify a financial advisor you trust—who has the right skills to help you meet your financial goals, make sound decisions, and monitor your investments. If you have a concern or your gut suggests that this person is not for you— walk away.
Project Independence – MS
Money Management
My Action Plan
Main message for me from this session:
My personal commitment to action:
Obstacles that may get in my way:
What I need to do to succeed:
Use Limitations. These materials are intended for non-commercial educational and instructional use only. These materials may not be used in connection with any sale, advertisement, endorsement or promotion of any service, product, person or business and may not be commercially published, sold or offered for sale.
Project Independence – MS
Money Management
Target Audience: People with Multiple Sclerosis (MS) Audience Profile
To understand how to assist people with Multiple Sclerosis (MS), it may be helpful to get a better understanding of the disease, who it affects, and some of the challenges it provides. The National Multiple Sclerosis Society states that, “MS is a chronic, often disabling disease that attacks the central nervous system (CNS), which is made up of the brain, spinal cord, and optic nerves. Symptoms may be mild, such as numbness in the limbs, or severe, such as paralysis or loss of vision. The progress, severity, and specific symptoms of MS are unpredictable and vary from one person to another.” According to The Multiple Sclerosis Foundation, “Multiple Sclerosis (MS) is an illness diagnosed in more than 350,000 persons in the United States today.” MS is more common in women, appears more frequently in Caucasians than Hispanics or African Americans and is relatively rare among Asians and certain other groups. Ninety percent of MS patients diagnosed are between the ages of 16 and 60; but MS can make its first appearance in early childhood or after age 60. Although MS is a progressive disease, the rate of progression differs from one person to another. The hallmark of MS is its unpredictability—which means that a doctor can’t predict with any certainty how far or fast a person’s MS is going to progress or final outcome. Since no two people have exactly the same experience of MS, the disease may look very different from one person to another. Some MS patients are able to continue employment with few, if any, accommodations, yet others are forced to quit their jobs. Some MS patients are able to live well without assistance, while many rely on assistive technology to help them carry out their daily activities.
Program Overview
Patients with MS are faced with so much that is unknown. However, one thing that is usually true for MS patients is that they will probably not die from MS. Instead, they may live for many years after being diagnosed. As a result, maintaining financial independence and security is a high priority for people living with such an unpredictable disease as MS. Taking control of finances is a top priority for many MS patients, yet like many people, MS patients may lack the basic financial skills to manage their money. The key to this short program is to encourage participants to manage their money so they can maintain their financial independence. This 60-minute program is designed to provide participants with a few tools to take a financial inventory, develop a spending plan and select a professional financial planner
Preparation:
Review this guide and complete your own set of the accompanying worksheets.
Money Management 1
Project Independence – MS
Review the suggested length for each topic noted as (10) or (15) and so on. This session is designed to be 60 minutes (1 hour) from Welcome to Wrap. Consider your own health. Have you been seriously ill? Do you know anyone who has MS? How would you feel if you had to deal with an unpredictable disease? Would you be worried about the future? Think about your own money management behavior. Do you conduct a financial inventory often? Are your financial affairs in order so that you could handle the strain of a potentially debilitating disease? Are there some money management lessons learned from your own experiences that may be helpful to share? Consider that when it comes to talking about money, sharing your own successes and challenges may be more engaging and effective than appearing to be lecturing.
Materials Needed:
Flip chart and easel or marker board; markers Pencils for participants Copies of A Financial Inventory worksheet Copies of Monthly Spending Plan worksheet (be prepared to provide at least two to each participant) Copies of Questions to Ask… information sheet Copies of My Action Plan worksheet
How to Facilitate This Session Welcome
(8) 1. Introduce yourself and express your pleasure in sharing money management tools that can be used to maintain financial independence. Have each participant introduce him/herself and share one financial worry that he/she is experiencing. List the worries on the flipchart or marker board. Share the program objectives and tie them back to the list of fears. • Conduct a financial inventory • Create a monthly spending plan • Select a professional financial planner • Commit to an Action Plan Suggest to participants that just as their MS symptoms are not exactly the same as someone else’s MS symptoms, their financial situation is unique. An important part of navigating MS is managing money and planning for the future. ?Ask participants how many of them feel a bit overwhelmed by the prospect of getting a firm handle on their finances.
Financial Inventory
(10) 2.
Project Independence – MS
Money Management
2
Explain the best place to start is by conducting a financial inventory. It’s important to know what they own and what they owe. In addition, they will need this information as they plan for future expenses or if they need to apply for any benefits that are based on financial need. Distribute A Financial Inventory worksheets. Review the instructions and suggest that as they complete their own worksheet they should take into consideration the IRS’s definition of value. Explain that they can go online to www.irs.gov for more details. Another consideration is to obtain a professional appraisal of valuable assets, such as their home, jewelry, artwork, and/or other collectibles. Go through a few of the categories and answer any questions. ?Ask participants if they use a spending plan or budget every month.
Spending Plans
(20) 3. Suggest that a financial inventory is a snap shot of everything you own and owe. It’s very useful in planning for the future. However, it doesn’t provide all the information you’ll need to maintain your financial security. ?Ask participants what would be helpful on a daily, weekly, or monthly basis? Explain that the best way to know how much money you need to live on every month is to create a Spending Plan. Distribute Monthly Spending Plan worksheets. Suggest that it’s important to have an accurate picture of sources of income and the exact amount(s) they can expect each month. Review the sources of income listed and check to see if there are any sources missing based on participant responses. Explain that many people have no idea where their money goes. Listing your expenses is the only sure way of tracking where your money is going. Review the types of expenses listed and answer any questions. Emphasis the importance of listing savings as an expense. Suggest that if you make it a point to pay yourself first, you will be able to build up your savings and maintain your financial independence. Remind participants that developing a savings habit is more important than the actual amount of money deposited each month. Every penny really does count! Discuss the comparison of income to expenses. Emphasize the need to revise your Spending Plan. If you have more money left over, then increasing your savings expense is a great investment in your future. If you come up short, you will need to take a hard look at your spending habits.
Money Management 3
Project Independence – MS
Stress the importance of considering ways to cut expenses or decrease expenses. Remind participants that managing money is all about making wise choices. ?Ask participants if they are currently working with a professional financial planner.
Selecting a Financial Planner
(15) 5. Suggest that as you begin to invest in your future to meet your long-term financial goals, you may want to seek the help of a professional. It’s important to understand the various types of investment professionals out there, the type of advice they give, if they need to be licensed or certified, how they get paid, and the breadth of advice they can provide you. Pair participants and ask each pair to list the types of investment professionals and what they know about each type. Assure participants that it’s OK if they feel they don’t know much. Allow 6-8 minutes for pairs to create their lists. When time is up, ask for a pair to volunteer and share one on their responses. Write the pair’s response on the flipchart or marker board. Proceed to call for additional volunteers to add to the list until the groups’ have exhausted their responses. Check the participants’ list and responses against the information provided below:
•
Stock Broker: A person who buys and sells investment products on your behalf, usually for a commission. A stock broker can advise you on specific investments, such as stocks, bonds, and mutual funds. S/he must pass an examination to obtain a broker’s license, be registered with the Financial Industry Regulatory Authority (FINRA), and work for a brokerage firm that must be registered with the Securities and Exchange Commission (SEC) and FINRA. Investment Adviser: An individual who receives payment to either provide investment advice to individuals or manage a portfolio of investments, such as a mutual fund. Investment advisers receive payment in a variety of ways: as: 1. 2. 3. 4. 5. A percentage of the assets they manage for you An hourly fee, A fixed fee A commission on investments they sell to you, A combination of these.
•
Project Independence – MS
Money Management
4
Advisers must register either with the Securities and Exchange Commission (SEC) or their state’s securities agency.
•
Financial Planner: An individual who receives payment for helping you develop a strategy for managing your money. Financial planners can differ greatly in the quantity and quality of services they provide. Some planners will guide you through decisions you have to make for every aspect of your financial life: savings, investments, insurance, taxes, education, retirement, and estate planning. Financial planners typically are paid in the same ways as investment advisers. Because no federal or state agency regulates financial planners, many become certified by the Certified Financial Planner (CFP) Board to establish credibility with their clients.
Note: The three investment professionals just described also use titles such as financial consultant, financial adviser, or investment consultant.
•
Accountant: A person who receives payment, usually at an hourly rate or as a fixed fee, to inspect and audit financial records for individuals or companies. Accountants also prepare tax returns and provide tax planning, and to some degree, financial planning. Each state has an accountancy board, which requires accountants to pass an examination before issuing them licenses to practice accounting in their respective states as certified public accountants (CPAs). Accountants are subject to standards for ethical behavior under state law. Insurance Agent: A person who sells life, health, or property insurance policies and other insurance products, such as annuities, usually for a commission. Insurance agents must be licensed by the state in which they sell.
•
Stress that before you meet with an investment professional, you should draw up a list of questions. You should always meet face-to-face! Distribute Questions to Ask… information sheet. Review the four areas of concern and the suggested questions. Answer any questions. Emphasize the information provided in the “Note” section. Use stories from the recent news including Bernie Madoff and his Ponzi scheme. ?Ask participants if they feel that the tools discussed today will help them manage their money.
Project Independence – MS
Money Management
5
Wrap (6) 6.
Review the list of worries and note which ones were addressed and which ones will need to be addressed at a later time. Review the topics covered in the session: Taking an inventory of your financial situation Creating a monthly spending plan Developing a debt reduction plan Selecting an investment professional Remind participants to complete their My Financial Inventory sheets and to create their Monthly Spending Plan. Distribute My Action Plan worksheets. Encourage participants to take a few minutes to complete their worksheets to ensure that they get started immediately to maintain their financial independence. Thank participants for their attendance and let them know how much you enjoyed spending an hour with them. Provide them with any additional information as agreed upon with your agency contact.
Project Independence – MS
Money Management
6
A Financial Inventory
Directions: Take an inventory of your (and your partner’s) assets and liabilities. Fill in the information as accurately as possible. If you have to estimate, use the Internet or newspaper to get a reasonable idea of the value of the item.
Assets
Item
House Spouse/Partner Mine Ours Vehicle (s) Spouse/Partner Mine Ours Checking accounts Spouse/Partner Mine Ours Savings accounts Spouse/Partner Mine Ours Stocks Spouse/Partner Mine Ours Mutual Funds Spouse/Partner Mine Ours Retirement Funds (401 (k)s, IRAs) Spouse/Partner Mine Ours Furniture Artwork Jewelry Rental property Time shares Business Spouse/Partner Mine Ours Other:
Name/Account #
Value $
Project Independence – MS
Money Management
Liabilities
Item
Home Mortgage Spouse/Partner Mine Ours Car payment(s) Spouse/Partner Mine Ours Credit card debt Spouse/Partner Mine Ours Personal loans Spouse/Partner Mine Ours Business loans Spouse/Partner Mine Ours Other loans Spouse/Partner Mine Ours Other: Spouse/Partner Mine Ours
Name/Account #
Amount Owed $
TOTALS:
Spouse/Partner assets My assets Our assets Spouse/Partner liabilities My liabilities Our liabilities
NET WORTH (assets minus liabilities) Spouse/Partner’s Net Worth My Net Worth Our Net Worth
$ $ $
Project Independence – MS
Money Management
Monthly Spending Plan
Estimate your monthly income:
Monthly Income Sources
Source
After-tax wages After-tax wages from spouse’s income Tips or bonuses Alimony/maintenance payments Child support Unemployment compensation Social Security or Supplemental Security Income Retirement plans Private disability insurance payments VA Benefits Public assistance Food stamps Interest/investment income Other
Expected per month
Actual per month
Total Monthly Income
$
$
Project Independence – MS
Money Management
List your monthly expenses. If you have not kept track of your expenses in the past, use this sheet to keep an accurate record of your expenditures beginning today! Next month, complete a new worksheet and accurately list your expenses.
Monthly Expenses
Source
Rent/mortgage Second mortgage Line of credit Utilities (heat, electricity, water) Land line and/or cell phone Internet access/cable Groceries Car payment, gasoline, parking Bus fare Insurance (car, homeowner’s, renter’s, life) Personal assistance care Prescription drugs, medical supplies, and equipment Treatments or therapies (massage, exercise classes, alternative treatments, supplements, etc.) Doctor/dentist bills Home adaptations or improvements Child care, child support payments Alimony/maintenance payments Pets Loan/credit card payments Clothes Snacks/meals eaten out Personal (toiletries, etc.) Entertainment (movies, eating out) Charitable donations Savings for emergencies Savings/retirement plan contributions Miscellaneous (gifts, vacations, classes) Other
Expected per month
Actual per month
Total Monthly Expenses
$
$
Project Independence – MS
Money Management
Now that you have identified your sources of income and listed your expenses, it’s time to compare the two and discover how much money you have left over every moth. Compare Income and Expenses Actual monthly income (Minus) actual monthly expenses
$ _______________________________ - $ _______________________________ $ _______________________________
Do you have money left over? Great! Go back and increase your monthly savings expenses to build financial security. Are your expenses greater than your income? Perhaps it’s time to change some spending habits.
Change Habits Review your expenses. Are there any that you can cut out completely? _____________________________________________________________________ Which expenses can you possibly decrease? _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ What will you actually do to cut expenses? _____________________________________________________________________ _____________________________________________________________________ Review your income. Is there any opportunity to increase your income? ______________________________________________________________________ ______________________________________________________________________ Now, if you decided on ways to decrease your expenses, go back and make the necessary corrections to your spending plan. Re-calculate your income minus expenses. Are you satisfied with the results? Use your Spending Plan for the next month. Write down how much you actually earned and how much you actually spent. If there is a difference between what you expected to earn and/or spend and what you actually earned and/or spent, carefully examine the differences. Make whatever adjustments are necessary on next month’s Spending Plan. You will soon become skilled at developing a sound Spending Plan and it will help you in reaching your long-term financial goals.
Project Independence – MS
Money Management
Questions to Ask…
There should be a good fit between you and the financial advisor you choose to handle your financial affairs. Interview at least three or four individuals. Plan to spend between 30 and 60 minutes with each one. Before you meet with an investment professional, you will want to draw up a number of questions to help you make the right selection. Here are four areas to consider along with a few questions— feel free to add more questions! Education and Training A college degree is not required of financial advisor, although many have advanced degrees. Some professionals are required to be licensed, certified, or complete extensive training. Know what credentials your financial advisor must have before you invest. Visit FINRA’s professional designation database at www.finra.org. Find out the education and experience various investment professionals must have, the examinations they must pass, and if they are in good standing.
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What type of education and training do you have? What examinations did you take? Did you pass them? What licenses or certifications do you have? May I see them? Are you registered with the SEC, a state, or FINRA?
Experience Ideally, you’ll find a financial advisor who has experience working with individuals with MS. A professional who understands your situation dealing with an unpredictable disease could serve you well. Most importantly, you want to be sure, without a shadow of a doubt that you end up working with a legitimate upstanding professional.
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What is your experience working with individuals who have MS? Are you familiar with medical plans, government and private disability benefits, and life insurance? Are you familiar with the legal rights of people with a disability like MS? How long have you been in the investment business? Where did you work prior to this position? What is the status of those firms today? Have you ever been charged with any wrongdoing or disciplined by a regulator?
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Project Independence – MS
Money Management
Approach to Investing Determine whether a financial advisor will act in your best financial interest. That means respecting your financial goals, tolerance for risk, and need to access your money, if necessary.
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What is your investment philosophy? Can you give me the contact information of long-term clients? Will I be able to speak with them? How often will you review my finances? Do you recommend certain products? What are all the products and services you offer? Knowing my financial goals, how would you approach helping me meet them? How do you decide how my money should be allocated?
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Fees and Commissions
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How do you get paid (fee, commission from sale of financial products, fee plus commission)? On the investment products you sell, what is the rate of commission you get paid? Would I pay commission when I buy an investment or when I sell it? Does anybody else get paid when I purchase an investment or are you rewarded with a prize for selling an investment?
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Note:
For any financial planner you are interested in working with, do a background check before your first transaction. Look for proper registration, licensing, or certification, as well as disciplinary history. Do not simply rely on family and friends for a recommendation! Remember, your goal is to identify a financial advisor you trust—who has the right skills to help you meet your financial goals, make sound decisions, and monitor your investments. If you have a concern or your gut suggests that this person is not for you— walk away.
Project Independence – MS
Money Management
My Action Plan
Main message for me from this session:
My personal commitment to action:
Obstacles that may get in my way:
What I need to do to succeed:
Use Limitations. These materials are intended for non-commercial educational and instructional use only. These materials may not be used in connection with any sale, advertisement, endorsement or promotion of any service, product, person or business and may not be commercially published, sold or offered for sale.
Project Independence – MS
Money Management
