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National Program Planning and Development Committee

∆ THE ILLNESS: The Recession of the 21st Century

∆ REMEDY #1: Conduct a Personal Assessment of Your Finances∆ Financial Check Up ∆ Identify Needs vs. Wants

∆ REMEDY #2: Address Your Spending , Savings, and Debt Management∆ Managing Your Spending∆ Savings∆ Managing Debt

∆ REMEDY #3: American Recovery and Reinvestment Act of 2009∆ What’s in the ACT to help you and your family

∆ REMEDY #4: Foreclosure Prevention∆ Loan Modification ∆ Homeowner Affordability and Stability Plan

∆ REMEDY #5: Entrepreneurship∆ Self Sufficiency and Empowerment∆ Create Legacy Wealth∆ How To Get Started

∆ THE CURE: Preparing for a Brighter A Future∆ Adopting The 10 Wealth For Life Principles∆ The Advantages for You of Recession

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2001: Failure of a number of tech and start up companies; 911 attacks Federal Reserve steps in to help prevent recession by lowering interest rates

2002-2005: Lowering interest rates ignites the Housing Market

Home prices went up Mortgage companies and banks created “exotic” mortgages to qualify

consumers Continued sales to unqualified consumers into subprime ADJUSTABLE

loans Lenders assumed homes would continue to appreciate; thought the worst

borrowers would be able to repay their loans in the future.

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2006-2008: 3-Year, 5-Year Interest Only/Option Adjustable Rate Mortgages are starting

to adjust; consumers cannot pay their new mortgage payment → FORECLOSURE

Banks gaining MORE housing inventory (loans defaulted), LESS cash to lend out to future lenders

Domestic automakers profits plunge; Unemployment begins to rise; more foreclosures

September-October 2008 Banks declare bankruptcy, Unemployment continues to rise Stocks and your 401K declined dramatically Housing prices dropped to an all-time low. Government steps in to help

November 2008-Present ARRA 2009: Economic Stimulus Plan

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Develop an Annual Financial Check UpΔ Categorize Your ExpensesΔ Necessary - (housing payments, food, transportation, insurance, utilities, and

loan interest) Δ Discretionary - (Cable, dining out, sporting events, movies, magazine

subscriptions and club memberships) Δ Negotiate -You Get Not Because You Ask Not!

Δ Eliminate unnecessary/wasteful spending, CANCEL-Δ Membership you never useΔ Add-ons offered by car DealershipΔ Subscriptions you never readΔ Expensive Haircuts/HairdosΔ Extended Warranty on electronics

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Δ Expensive HobbiesΔ Car washesΔ Eating OutΔ Relaxing At the MallΔSpecial offers from Credit Card Companies

Manage Your Money: Live by the 10-10-30-50 RuleΔ 10% - Tithes and OfferingΔ 10% - Personal SavingsΔ 30% - Cash (to purchase needs)Δ 50% - Total Monthly Debt

Δ Identify Needs vs. WantsΔ Need a pocketbook Want a Gucci pocketbookΔ Need a car Want a BMW 740Δ Need clothing Want St. JohnsΔ Need a “Staycation” Want a VacationΔ Need Coffee Want Starbucks Δ Need a Movie Video Want to go to the Movies

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Managing Your SpendingΔ Write down everything you spend for a month;

cut out things you don’t need.Δ Start saving the excess money or use it to

reduce debt.Δ Use paper currency when paying by cash.

Save all coins that you receive to start your savings.

Savings and Investment Strategies Diversify to manage business, market, and interest

rate risk Rebalance your portfolio if it is appropriate Consider the current and future tax ramifications of

your actions Dollar-cost average to keep your investment

strategy on track

Avoid Market Timing, but prepare for opportunities Manage your emotions by following a disciplined

plan based on solid fundamentals, not emotion

Optimism

Relief

Hope“Things may be turning around.”

Excitement

Thrill

Optimism

“Wow, I ammaking money.I feel good about this investment.”

Euphoria Point of maximum financial risk

Fear

Denial“This is just a temporary setback.”

Desperation

Anxiety

PanicCapitulation

Despondency“I think I need to sell.”

Depression

Point of maximum financial opportunity

Source: Radarwire.com. A product of Simon Economic Systems, Ltd.

Understanding emotional investing

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ASK YOURSELF…..ΔAre financial matters creating stress in the

household?ΔHow much do you bring home after taxes? ΔHow much do you have remaining at the end

of the month after paying fixed expenses? ΔHow much do you spend on variable items,

such as, that $2 cup of coffee every morning or $10.00 for lunch three times a week?

ΔAre You Living Check To Monday?*

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Managing Your DebtΔ Pay off your highest-rate debts first.Δ Proceed with caution the institutions you establish a credit

relationship withΔ Don’t be afraid to contact your creditors to make “deals” on your

interest ratesΔ Total monthly debt should not exceed 50% of gross monthly incomeΔ Create an emergency fund of at 6 months of your salaryΔ Establish a tracking system of your spending patterns

Δ Write down every cent you spend for 1 monthΔ Add up all expenses on a list and compare the sum to your

monthly incomeΔ Establish “envelopes” to pay bills and pay yourself

How the Stimulus Plan IS helping you!

FIRST-TIME HOME BUYER CREDIT First-time home buyers are eligible for a refundable tax credit equal to 10 percent of the purchase price of their home, up to $8,000, if they made the purchase after Jan. 1, 2009, but before Dec. 1, 2009.

CAR BUYER TAX DEDUCTION: For the rest of 2009, you’ll be able to deduct the state and local sales and excise taxes you pay on the purchase of a new (not used) car, light truck, recreational vehicle or motorcycle.

UNEMPLOYMENT: Normally, you pay federal income taxes on federal unemployment benefits. In 2009, however, you won’t have to pay taxes on the first $2,400 in benefits you receive.

HEALTH INSURANCE : If you get released from a job, your company is required, thanks to a law known as Cobra, to allow you to pay to keep your health insurance, generally for up to 18 months. COBRA is expensive! The federal government will subsidize 65% of the premium for up to nine months.

ENERGY CREDITS: If you install new windows, doors, energy efficient heating and cooling systems, all qualify for credit on 2009-2010 taxes.

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Loan Modification: When a lender agrees to modify the terms of a mortgage without refinancing the loan.

Forbearance: Is when your lender offers a temporary reduction or suspension of your mortgage payments while you get back on your feet. Forbearance is often combined with a reinstatement or a repayment plan to pay off the missed or reduced mortgage payments.

Reinstatement: Your lender may agree to let you pay the total amount you are behind, in a lump sum payment and by a specific date. This is often combined with forbearance when you can show that funds from a bonus, tax refund, or other source will become available at a specific time in the future. Be aware that there may be late fees and other costs associated with a reinstatement plan.

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Repayment Plan: This is an agreement that gives you a fixed amount of time to repay the amount you are behind by combining a portion of what is past due with your regular monthly payment. At the end of the repayment period you have gradually paid back the amount of your mortgage that was delinquent.

Loan Modification: This is a written agreement between you and your nortgage company that permanently changes one or more of the original terms of your note to make the payments more affordable.

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Homeowner Affordability and Stability Plan

Homeowner Affordability and Stability Plan: is part of the President’s broad, comprehensive strategy to get the economy back on track.

The plan will help up to 7 to 9 million families restructure or refinance their mortgages to avoid foreclosure.

Low –cost refinancing for responsible homeowners suffering from falling home prices.

Helping hard-pressed homeowners stay in their homes Protecting neighborhoods Loan modifications should bring monthly payments to

sustainable levels Reaching borrowers early

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Self-Sufficiency and Empowerment“….Begin to work towards financial literacy with a goal of

financial security; but, as we age we should work toward the goal of building Legacy Wealth”. Dr. Dorothy Irene

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What would you do if you could not fail?

What Business would you start if you could not fail? Would You Buy an Exiting Business? Would You Invest is a Franchise? Would You Start Your Own Business?

What Prescription would you take to make Your Dream A Reality?

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Creating Legacy Wealth Conduct a Self Assessment Get Started Develop a Business Plan Identify Regulatory Requirements Explore Financing Options Learn How to Read Financial Statements Formalize Operating Procedures Develop a Marketing Plan Research Outsourcing Services Plan to Succeed – Turn Your Dream into a Reality

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Remedy # 5Entrepreneurship

Getting Started Available Resources for Start-Up Companies

Small Business Administration Service of Retired Executives Minority Business Development International Franchise Association Women Business Owners Internal Revenue Service

1. Recession can create opportunity. Without sacrificing your daily living plans,

consider taking smart investment risks (starting a business, purchasing property, buying more stock).

It could pay major dividends when the financial market improves.

2. Don’t let your emotions affect your financial future. Avoid reacting too quickly to the market changes. It could affect your overall financial portfolio.

3. In these time, GET HELP!! Review or set up your financial plan with a trusted financial professional

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National Program Planning and Development Committee

QUESTIONS AND DISCUSSION

Δ Budget Calendar by Mishell -Tracks Cash flow

http://www.download.com/Budget-Calendar/3000-2057_4-10360090.html

Δ Home Budget Calculator at Bankrate.comhttps://www.bankrate.com/brm/calculators/

personalfinance/home_budget_calculator.asp

Δ Manage your money for free https://www.mint.com

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Δ SF Red Portfolio – Interactive Website designed for Women to provide education on Financial Services

http://sfredportfolio.com, click on Red Portfolio Toolbox for interactive worksheets and calculator

such as: What is my NET WORTH?

Daily Expense Journal Credit Card Spending

What is it worth to reduce spending

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Δ The Stimulus Plan: ARRA

For more details about the HIGHER EDUCATION TAX CREDITS, EMPLOYEE TAX CREDITS, and other

benefits, go to:

http://www.recovery.gov

Δ Also, consult a strong tax accountant as well!

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1. I will live within my means.

2. I will maximize my income potential through education and training.

3. I will effectively manage my budget, credit, debt, and tax obligations.

4. I will save at least 10% of my income.

5. I will use homeownership as a foundation for building wealth.

6. I will devise an investment plan for my retirement needs and childrens’ education.

7. I will ensure that my entire family adheres to sensible money management principles.

8. I will support the creation and growth of minority-owned businesses.

9. I will guarantee my wealth is passed on to future generations through proper insurance and estate planning.

10. I will strengthen my community through philanthropy

24Source: Black Enterprise