1 / 28

Core PFRP for Transition

Module 1.1. Core PFRP for Transition. Disclaimer:

americus
Download Presentation

Core PFRP for Transition

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Module 1.1 Core PFRP for Transition

  2. Disclaimer: The information provided herein does not constitute a formal endorsement of any company, its products, or services by the Department of Defense. Specifically, the appearance of external hyperlinks does not constitute endorsement by the U.S. Department of Defense of the linked web sites, or the information, products or services contained therein. The U.S. Department of Defense does not exercise any editorial control over the information you may find at these locations. This information is being provided as informational resource material to assist military personnel and their families and should be used to assist in identifying or exploring resources and options. Competencies: Completion of a working/realistic spending plan for transition that will contain current spending, transitional spending, and future requirements.

  3. Learning Objectives • Define long-term/short term transition goals • Determine cost of each goal • Determine current financial situation using the Financial Planning Worksheet for Transition • Compare current financial spending plan to goals • Analyze current/desired financial state • Anticipate future requirements • Complete the following sections in their financial spending plan • Net Worth Statement • Income Statement • Savings & Expenses • Indebtedness Summary • Action plan / Goals • Daily Expense / Spend Plan • Develop a post-service, 12-month transition spending plan

  4. Why? A spending plan is a tool that helps you build the financial part of your plan to meet your transitional goals.

  5. Spending Plan Characteristics • Guide & servant • No need to account for each penny • Easy to understand • Reflects wants & needs • Based on current income/expenses • Practical & realistic • Flexible • Provides for necessities and fun

  6. Why a Spending Plan is Important • Live within your income • Realize personal goals • Maintain good credit history • Get more for your money • Reduce financial stress • Enjoy financial freedom

  7. The Financial Planning Worksheet Six components of the worksheet • Net Worth Statement • Income Statements • Savings & Expenses • Indebtedness Summary • Action Plan / Goals • Daily Expense / Spending Plan

  8. Elements of a Budget To calculate net worth, subtract balance from value

  9. 4.12

  10. Estimating Net Worth www.savingsbond.gov www.homegain.com www.nada.com

  11. Income to Savings Total pay + allowances = Gross Income Gross income – tax deductions = Net Income Net income – additional deductions such as allotments = Take-Home Pay 4.13

  12. Complete the Income and Savings portion of the worksheet 4.13

  13. Example 1

  14. Example 2

  15. Living Expenses

  16. Tracking Expenses • Track spending for 2-4 weeks • Record all expenses daily • Group expenditures by category

  17. Calculate the living expenses on the Financial Planning Worksheet 4.13

  18. Expenses

  19. Debt Management

  20. Summary • Total pay equals all compensation • Total compensation minus all deductions equals take home pay • Take home pay is what you live on for the month

  21. 70-20-10 Ratio Percentages will vary based on lifestyle, but guidelines prove effective in helping to develop a sound financial plan and keeping debt at a reasonable level. 4.18

  22. Calculate the indebtedness & summary section of the Financial Planning Worksheet 4.13

  23. Debt-to-Income Ratio Total Monthly Debt Payments / Net Income x 100

  24. 70-20-10 Ratio Use caution <15% Fully extended 15-20% Overextended 21-30% Seek assistance >30% 4.18

  25. The Action Plan

  26. Improving a Spending Plan Decrease Indebtedness Increase Income Decrease Living Expenses

  27. Sources of Help

  28. Spending Plan 4.17

More Related