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10-70-20 PLAN A Plan for Success SUCCESS Success begins with DESIRE Success requires a PLAN Success takes TIME Four Ingredients: A plan to save A way to control living costs A solution to over-extended debts A way to properly plan for the future TOTAL EARNINGS From Gross Earnings

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10 70 20 plan
10-70-20 PLAN

A Plan for Success

success
SUCCESS
  • Success begins with DESIRE
  • Success requires a PLAN
  • Success takes TIME
slide3

Four Ingredients:

  • A plan to save
  • A way to control living costs
  • A solution to over-extended debts
  • A way to properly plan for the future
slide4

TOTAL EARNINGS

From Gross Earnings

Subtract

Net Income Or Working Income

1. Savings 10%

2. Living Expenses 70%

3. Debt, Investing, giving, etc. 20%

1. Tithe

2. Income & Social Security Tax

example
EXAMPLE

Gross Income (annual) $30,000

Tithe (10% of gross) - 3,000

Taxes (15% of gross) - 4,500

Net Working Income $22,500

10% Saving $2,250

70% Living Expenses $15,750

20% Debt Reduction $4,500

TOTAL $22,500

savings 10
SAVINGS - 10%
  • First Goal: Emergency Fund
    • At least 3 months income
    • Accessible, interest bearing account
  • Second Goal: Cash Buying
living expenses 70
LIVING EXPENSES - 70%
  • House Payment (mortgage or rent)
    • Property taxes
    • House insurance
    • Utilities
    • House repair and upkeep
  • Car Expenses
    • Payments
    • Gas, Oil, Etc.
    • Insurance
    • Repairs
things to be included in the 70 cont d
Things to be included in the 70% (cont’d)
  • Medical Expenses
  • Life Insurance
  • Recreation
  • Gifts
  • Food
  • Clothing and Dry Cleaning
  • Reading Material
  • Furniture
  • Miscellaneous
things to watch carefully
Things to WATCH CAREFULLY
  • Furnishings and equipment
  • Expensive foods (eating out)
  • Life insurance:
    • Buy protection and/or annuities!
    • Insurance is not designed as a savings plan.
  • Clothes
    • Shop, attend sales
    • DO NOT overbuy on a limited income.
things to watch carefully cont d
Things to WATCH CAREFULLY (cont’d)
  • Car
    • DO NOT buy more than you can afford.
    • Should you buy used or new?
  • House
    • DO NOT get into more house than you can afford.
    • Your income will determine size and kind you can afford.
debt reduction 20
DEBT REDUCTION - 20%
  • Getting rid of back bills without pain is IMPOSSIBLE
  • Get credit cards under control
  • Face current debt problem head-on
debt reduction plan
Debt Reduction Plan
  • Start by making a list of creditors (see worksheet #4)
  • Calculate the payment schedule
liabilities 20 of working income annual 4 500 monthly 375
LIABILITIES - 20% of Working IncomeAnnual $4,500 Monthly $ 375

(A) (B) (C) (D)

Creditors Balance Due % of Total Debt Monthly Pmt.

1. Sears $ 4,500 30% $112.50

2. J.C. Penny $ 4,000 27% $101.25

3. MasterCard $ 3,500 23% $ 86.25

4. Discover Card $ 3,000 20%$ 75.00

$15,000 100% $375.00

how to work the plan cont d
How to work the plan (cont’d)
  • Go to your creditors with your plan
  • Stay with plan after debts are paid off
    • Consider God first
    • Consider children’s education
    • Consider retirement
    • Consider house pay-off early
    • Consider buying of cars
    • Consider investments
summary for success god is owner man is manager
Summary for success:God is owner - man is manager
  • Keep your priorities right
    • God FIRST
    • Family SECOND
    • Other things will fall in place
summary for success cont d
Summary for Success (cont’d)
  • Work toward being debt free
    • Concentrate on all debts with exception of house and car first
    • Concentrate on cash fund with which to buy bigger items
    • Remember children’s education fund
    • Remember retirement
  • Work toward buying a car with cash
  • Work toward paying off house early
  • Seek God’s guidance in all you do