HBP How To Manage Your Finances Workbook

How To Manage
Your Finances
Workbook
© 2020 United HealthCare Services, Inc. All rights reserved.

The Program
Welcome/Learning Points
Challenges
Assess Your Finances
• Setting Financial Goals
• Life Stages
Budget Guidelines
• Designing Your Spending Plan
• Managing Your Cash Flow
• Becoming Debt-Free
Credit Trouble
• Your Credit Report
Financial Emergencies
• Saving and Investing
• How Much Do I Need To Save?
• Choosing an Investment Professional
• Certificates of Deposit (CDs)/The CD Ladder
• Other Options
Managing Your Retirement Plan
Insurance
• Protecting Your Assets
• Be a Savvy Insurance Shopper
Estate Planning
Make Your Action Plan
Closing

Learning Points
Participants will:
Evaluate current financial situation.
Identify the components of financial planning.
Redesign your spending habits.
Explore ways to manage money more effectively.
Write an action plan to manage your finances.
Please consult your personal financial institution or investment professional

for more specific information.
The worksheets provided in this program will take more time to complete
than allotted today. Think about finishing this process at home with
appropriate household members.
Note: The contents of this training program should not be interpreted as any form of
financial planning advice. Please consult your personal financial institution or
investment professional for more specific information.

Challenges
What have
some of your
challenges
been in
managing
your
finances?
Good 1.
financial
planning 2.
includes:
3.
4.
5.
6.
7.
8.
9.

Assess Your Finances
Cash flow analysis

Vital to determine the resources available to fund your goals.
Net worth
Equals the value of what you own, less what you owe. A net worth analysis
is critical for insurance and estate planning.
An emergency fund
Essential for addressing the unexpected. Your fund should be able to cover
three to six months of living expenses.

Setting Financial Goals
Why is it important to have financial goals?
What’s really important to you?
How can you use your income to provide the greatest satisfaction?
What are some of your goals?

(An example of a goal might be to save 10 percent of your net pay from
every pay check.)
Use the worksheet on the following page to determine your

financial goals
Make sure the financial goals you set are SMART goals:
• Specific.
• Measurable, in terms of dollars.
• Attainable or achievable.
• Realistic.
• Time-specific.

Life Stages
Make financial goals personal, for example:

• Establish credit; maintain a good payment record.
• Learn about investing; set up an automatic savings program.
• Have adequate insurance coverage.
• Begin investing for children’s education.
• Keep credit under control. Avoid finance charges/annual fees.
• Look for investments/savings to shelter income.
• Begin retirement planning.
• Review will/estate plans.
• Switch a portion of investments to low risk.
• Research reverse mortgages as possible income supplement.

Budget Guidelines
How does your budget measure up against this recommendation?
Misc. items
Clothing 1%
Utilities 4% Savings7% Insurance
6% 6%
Personal
care
3%
Trans-
portation, Health
8% 3%
Personal debt
14%
Food
21%
Housing
27%

Designing Your Spending Plan
Use the worksheets in the packet to help answer the

following questions:
• How much do you need to save each month to meet your goals?
• What can you do if you’re living “in the red” or in debt?
• Where’s your money going?
• Have you included information for the entire family?

Managing Your
Cash Flow
Ideas for Managing Your Cash Flow
• Set goals.
• Record your expenses.
• Identify spending traps.
• Balance your checkbook.
• “Pay yourself first.” Set aside at least 10 percent of each paycheck.

Managing Your
Cash Flow
What
•
methods do
you
have for •
managing
your cash •
flow?
•

Credit Trouble
 Feeling anxiety and stress.

 Making minimum payments.
 Charging more than you pay.
 Needing a consolidation loan.
 Being at limit and adding new cards.
 Not knowing the total amount you owe.
 Having a balance that rarely decreases.
 Arguing with spouse/partner about money.
 Using credit and cash advances for everyday items.
All of these point to a need for budget management.

It might be helpful to consult your local financial institution, a
reputable credit counseling service or your organization’s toll-free
number for a referral to get help.

Your Credit Report
Slide 11
• Used to determine the likelihood of successful

Credit repayment of a loan.
Score
• Range from 300–850.
35 Percent: Last two years of payment history.

30 Percent: Total amounts owed.
Factors affecting 15 Percent: Length of credit history.
credit scores
10 Percent: New credit applications.
10 Percent: Types of credit in use.
Why do you need a credit report?

Your report could contain an error.
To obtain a copy of your credit report, contact the following:
https://www.annualcreditreport.com/index.action
1-877-322-8223
P.O. Box 105283
Atlanta, GA 30348-5283

What do you do when your income decreases, but the bills keep
coming?
Maintain your financial well-being in emergencies.
• Apply for unemployment.
• Revise budget to match income.
• Prioritize creditor payments — rent, mortgage, auto, insurance, utilities.
• Contact creditors to negotiate temporary payment reductions.
Contact your creditors.

• Contact them in writing. Include cause of reduction in income, prospects
for getting back on track and proposed payment amount.
• Be realistic and straightforward, only promise what you’re sure you can
afford.

Consider bankruptcy only as a last resort.

• Imposes long-term damage to credit.
• Bankruptcy is not free; there are court and attorney costs.
• Cannot discharge all debts: child support, alimony, taxes, student loans,
court-ordered damages still must be paid.
Filing bankruptcy is a major decision and a complicated legal
procedure.
Seek legal assistance before making this decision.
The two most common types of bankruptcy are Chapter 7 and Chapter 13.
In Chapter 7, there is a sale of all assets that are not exempt, for example
cars, work-related tools and basic household items. Usually the sale is
conducted by a court-appointed trustee.
Chapter 13 may allow you to keep some property, such as a mortgaged
house or car. Usually there is a court-administered payment plan over a
three- to five-year period that requires payment of a percentage of the debt
owed before the remaining balance is discharged.
Both types of bankruptcy affect your credit score and stay on your credit
report for several years.
The Federal Trade Commission website has more information about the
bankruptcy process and a state-by-state list of government-approved
agencies who can help you find out more about the bankruptcy process.
https://www.consumer.ftc.gov/articles/0084-debt-relief-or-bankruptcy
https://www.consumer.ftc.gov/articles/0224-filing-bankruptcy-what-know

What is a financial emergency?
How would you cope with bills if money stops coming in

on a regular basis?

Saving and Investing
• Why do people need to save money?
• What’s the difference between saving and investing?
• What are some ways people are preparing for retirement?
• When will you be financially independent?

List some things you could do to help you have more money to save:
1.
2.
3.
4.
5.

How Much Do I Need to Save?
Check out these additional resources:

• Financial Articles, AARP materials online at
www.aarp.org/money/financial_planning/
• U.S. Department of Employee Benefits Security Administration at
www.dol.gov/ebsa/
• Financial Industry Regulatory Authority https://www.finra.org/

How Much Do I Need to Save?
What to consider when you determine income needed in retirement:

• Retirement age.
• How much have you been saving and in what types of investments.
• Depends on expenses, important to budget.
• Conservative, 100 percent of current expenses, adjust for inflation.
• Highly specific to individual situation and lifestyle.
• Impact of inflation on purchasing power is important.
What to consider when you determine cash inflows:

• Social security.
• Pensions.
• Pay-outs from trusts or inheritance.
• Other income?
Determine gap, if any, between savings and income needed:

• Must be supported by pay-outs from “lump sum.”
• Lump sum can be IRAs, Regular Investment Accounts.
• Tax effects will impact each decision.

Choosing an
Investment Professional
What is the value of seeking advice from an investment professional?
Information about finding an investment professional is available on the

Financial Industry Regulatory Authority website:
https://www.finra.org/investors/choosing-investment-professional

Certificates of Deposit (CDs)
Advantages
Disadvantages

The CD Ladder
$500 in a four-year CD.
$500 in a three-year CD.
$500 in a two-year CD.
$500 in a one-year CD.

Other Options
Other long-term savings and investment options.

Consider investing in companies that purchase bonds, stocks or other
securities and sell shares to the public.
• Provides two benefits:
• Diversification — Fund shares represent investments in many companies
• Professional management of your money — Portfolio managers whose job is
full-time research
Work with a broker or contact a no-load (no commission charged at time of
sale) mutual fund company.
• Read the prospectus before investing.
• Look at the fund’s objectives/goals. Be comfortable with the risk
associated with the fund.
• Determine past performance — minimum of five years.
• Ask about purchasing and redeeming information — minimum
investments, auto-investing, loads.
• Identify fund management fees.
• Check out the risk — the fluctuation in investments.
• Determine the level of risk appropriate for you — conservative,
balanced, moderate growth, aggressive growth and other types of funds
as each has different levels of risk and reward.
Always consult an investment professional with appropriate credentials.
The Financial Industry Regulatory Authority website has more information:

Other Options
It’s vital to identify your comfort level with risk.

Conservative, balanced, moderate growth, aggressive growth and other
types of funds each have different levels of risk and reward.
Always consult a professional financial advisor with appropriate

credentials. The Financial Industry Regulatory Authority website has
more information:

Managing Your Retirement Plan
• Begin now.
• Diversify.
• Look long-term.
• Invest aggressively.
• Avoid borrowing from your 401(k).

Insurance: Protecting Your Assets
What type of insurance should you have? Why?
Health
insurance
Disability
insurance
Life
insurance
Liability
insurance
Auto
insurance
Homeowners
insurance
Renters
insurance

Estate Planning
How will your assets be distributed?

Have you executed the appropriate legal documents?
• Wills and trusts?
• Durable Power of Attorney?
• Advanced Medical Directive or Living Will?
What about estate taxes?

Make Your Action Plan
What ideas, behaviors, attitudes, feelings, techniques about managing

your finances did you gain from this training? List them below.
Who will you check in with to make sure you are making progress?
Ideas/Behaviors I will meet it by …

About
Professional Support
You may consider seeking professional support if you experience
any of the following:
• Sleep problems.
• Performance issues at work.
• Relationship difficulties with family or friends.
• Loss of interest in hobbies you normally enjoy.
• Lack of care about normal everyday work tasks.
• Excessive anxiety or worrying more than normal.
• Feeling overwhelmed or sad for more than two weeks.
• A noticeable change in appetite, eating too little or too much.
• Behavior and coping methods have become harmful to yourself
or others, whether that is through aggressive behavior or unhealthy
habits, such as drinking too much alcohol or taking drugs.
• Thoughts of harm to self and/or others.
Keep in mind some of these conditions may warrant more urgent
professional help and you should seek support if you are unsure.
Your Employee Assistance Program (EAP) is available to all employees

and their covered dependents and may include some free counseling
sessions per issue, per year. Please check with your employer or your
health plan for details.
Citations
American Psychological Association: How to choose a psychologist.
http://www.apa.org/helpcenter/choose-therapist.aspx.
Helpguide.org: Depression Symptoms and Warning Signs.
https://www.helpguide.org/articles/depression/depression-symptoms-and-warning-signs.htm.
Helpguide.org: Suicide Prevention.
https://www.helpguide.org/articles/suicide-prevention/suicide-prevention.htm.

Appendix A:
Assessing Your Financial Situation
Assets Liabilities
Cash items Charge account balances $_________
Cash on hand $_________ Personal loans $_________
Checking accounts $_________ Auto loans $_________
Savings accounts $_________ Home mortgages $_________
Money market accounts $_________ Home equity lines $_________
U.S. Treasury Bills $_________ Other loans $_________
Other liabilities $_________
Investments
Stocks $_________
Total liabilities $_________
Bonds $_________
Mutual fund investments $_________
Cash value of life insurance $_________
Other investments $_________
Retirement funds
IRAs and Keogh accounts $_________
Employee savings plans $_________
Total assets $_________
Personal assets
Total liabilities – $_________
Principle residence $_________
Second residence $_________
Collectibles/art/coins, etc. $_________
Net worth = $_________
Automobiles $_________
Home furnishings $_________
Furs and jewelry $_________
Other assets $_________
Total assets $_________
Worksheet based on https://www.investor.gov/sites/default/files/Net-Worth.pdf

http://www.finra.org/investors/know-your-net-worth

Appendix B:
Setting Financial Goals
Short-term Goals (less than two years)
Priority Desired Anticipated
Goal Level Achievement Date Cost

Accumulate emergency funds equal to
three months’ living expenses
Pay off outstanding credit cards
Purchase adequate property, health,
disability and liability insurance
Money for vacation
Intermediate-term Goals (two to five years)


Save for major home improvements
Save for down payment on a house
Pay off outstanding major debts
Long-term Goals (greater than five years)


Save for college for child (children)
Purchase a second home
Create a retirement fund
Take care of parents after they retire
Start your own business

Appendix C:
Credit Evaluation Worksheet
Last
Name of Interest Annual Finance Minimum Balance
Creditor Rate (APR) Fee Charge Payment Outstanding
Credit Cards
Consumer Loans
Auto Loans
Mortgage Loans
Other Loans
Totals

Appendix D:
The Cost of Procrastination
The longer your money is invested, the more it can grow. Look at how much
someone who invested $2,000 a year while she was in her 20s would have
when she retired, compared to someone who began saving at age 30 and
continued faithfully until age 65.
This example is based on 9 percent annual interest.

Appendix E:
Couples and Money
The number one topic couples fight about is financial issues. Just as individuals have
different personality styles, so too do people have individual money personalities. The
way money was viewed and handled in one’s family of origin shapes one’s money
behavior in adulthood. If money is seen as integral to one’s status, power, control or
worth, that will give rise to a different financial focus than money that’s viewed as a
source of love and acceptance, a means to an end or a vehicle to charitably share.
These are issues that can have deep emotional roots and are best discussed prior to
making a commitment.
It’s recommended that couples look at their financial goals, from short-term (six
months to one year), mid-term (one to five years) and long-term (over five years) and
make a plan for meeting those goals. Understanding the “why” or motivation behind
each goal can help inform alternative plans should any of the goals be unrealistic for
the current situation.
Couples also need to establish a budget or spending plan and determine who will be
responsible for what, how financial matters will be handled — joint accounts,
independent accounts or a combination of the two — and how much each person can
spend on one item before needing to consult with his or her partner. Many experts
advocate for each person in a couple to have some financial autonomy so each
doesn’t have to consult with the other around every spending decision. Many experts
also advocate for individuals having their own credit cards to build their individual
credit histories. Couples are encouraged to “pay themselves first” — put money into a
savings plan for those aforementioned goals — as part of that spending plan.
Additionally, couples need to have regular, ongoing conversations around money. Are
you still on track? Have there been changes in your family status? Your goals? Your
career path? Your job(s)? What kind of compromises are needed? How is the
economy impacting your goals and your current financial situation? Do you need to cut
back? If so, where?
Communicate about financial issues. Accept that everyone handles money differently
and that it can be an emotional issue. Set financial goals together. Create a spending
plan and determine who will manage the finances. Keep communicating.

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How To Manage

© 2020 United HealthCare Services, Inc. All rights reserved.

© 2020 United HealthCare Services, Inc. All rights reserved.

Evaluate current financial situation.

Identify the components of financial planning.

Redesign your spending habits.

Explore ways to manage money more effectively.

Write an action plan to manage your finances.

Please consult your personal financial institution or investment professional

© 2020 United HealthCare Services, Inc. All rights reserved.

© 2020 United HealthCare Services, Inc. All rights reserved.

Cash flow analysis

© 2020 United HealthCare Services, Inc. All rights reserved.

Why is it important to have financial goals?

What’s really important to you?

What are some of your goals?

Use the worksheet on the following page to determine your

© 2020 United HealthCare Services, Inc. All rights reserved.

Make financial goals personal, for example:

© 2020 United HealthCare Services, Inc. All rights reserved.

How does your budget measure up against this recommendation?

© 2020 United HealthCare Services, Inc. All rights reserved.

Use the worksheets in the packet to help answer the

© 2020 United HealthCare Services, Inc. All rights reserved.

Ideas for Managing Your Cash Flow

• Record your expenses.

• Identify spending traps.

• Balance your checkbook.

• “Pay yourself first.” Set aside at least 10 percent of each paycheck.

© 2020 United HealthCare Services, Inc. All rights reserved.

© 2020 United HealthCare Services, Inc. All rights reserved.

 Feeling anxiety and stress.

All of these point to a need for budget management.

© 2020 United HealthCare Services, Inc. All rights reserved.

• Used to determine the likelihood of successful

35 Percent: Last two years of payment history.

Why do you need a credit report?

© 2020 United HealthCare Services, Inc. All rights reserved.

Contact your creditors.

© 2020 United HealthCare Services, Inc. All rights reserved.

Consider bankruptcy only as a last resort.

© 2020 United HealthCare Services, Inc. All rights reserved.

What is a financial emergency?

How would you cope with bills if money stops coming in

© 2020 United HealthCare Services, Inc. All rights reserved.

• Why do people need to save money?

• What’s the difference between saving and investing?

• What are some ways people are preparing for retirement?

• When will you be financially independent?

© 2020 United HealthCare Services, Inc. All rights reserved.

© 2020 United HealthCare Services, Inc. All rights reserved.

Check out these additional resources:

© 2020 United HealthCare Services, Inc. All rights reserved.

What to consider when you determine income needed in retirement:

What to consider when you determine cash inflows:

Determine gap, if any, between savings and income needed:

© 2020 United HealthCare Services, Inc. All rights reserved.

What is the value of seeking advice from an investment professional?

Information about finding an investment professional is available on the