This edition of Footsteps Along the Path was initially issued by Clear Path Financial Education Services which has now become Kuehn Financial Education Services LLC. For more information about Kuehn Financial Education Services LLC, please email or visit www.kuehnservices.com.

Clear Path Credit Consultants believes:
If you build on your own skills,
Rely on your own abilities,
Increase your range of knowledge,
And get help when you need it,
You are the investment that will succeed above all others.

Welcome to the eighteenth edition of Clear Path Financial Education Services' Footsteps Along the Path. The goal of this newsletter is to provide relevant and succinct information on financial management to consumers and small business owners. It is designed to build upon previous issues, developing a clear path to financial freedom. Reader feedback is encouraged.

Please feel free to forward Footsteps Along the Path. If you have received this from a friend or colleague, and wish to be added to the newsletter distribution list, simply provide a response e-mail with this request. The same applies if you do not desire further contact. Your name will immediately be deleted from the list. dkuehn@clearpathservices.com

In this issue:
* Debi Kuehn in the Media
* Big News
* Article: Laws Change Credit Cards
* A Knowledgeable Consumer is Powerful
* Seminars Worth Your Time
Visit www.clearpathservices.com

Debi Kuehn in the Media
Debi cites her view of the new bankruptcy law in The Arizona Republic newspaper on April 23, 2005. Some quotes include:
“People need to get perspective on their finances before they declare a bankruptcy.”
“I get nervous because I think it’s (the new bankruptcy law) just going to cause a frenzy.”
“(Proponents and lawyers say) You’ll get a better deal now on bankruptcy. It sounds like an oxymoron.”

In summary, the bankruptcy law goes in effect this October. If you make more money than most people in your respective state, less of your debt will be discharged. Many lawyers are hyping now is the time to declare financial insolvency. Please take time to consider the ramifications of bankruptcy along with ways to remedy your monetary situation before believing biased advertisements. Remember, a knowledgeable consumer is powerful!

Big News
Clear Path Financial Education Services is going through a growth process. A new name and business structure is on the horizon. Once all is solidified, I will excitedly announce the news. Thank you for supporting this business.

Laws Change Credit Cards
Bankruptcy reform will cause consumers who make over their state’s median income to pay more of the debt to creditors. Other laws are being changed to support this. For example, the Office of the Comptroller of Currency has told credit card companies to increase the minimum percentage of payment from 2 to approximately 4 percent. This is good news if you can afford the increase. If you are not self disciplined to mail a check for more than the minimum payment, the creditors will help you pay off your balance sooner. If you are currently struggling to pay the minimum then the increase will put you in over your head. Even though the rate hike is good for you in the long run, it is difficult to swallow now.

If you budget monthly minimum credit card payments, then you will need to reconsider what you can afford to charge. For example, if the minimum payment for that new drum set went from $40 to $80 you may find this item a luxury requiring savings as opposed to a necessity to buy right now with debt. Purchasing restraint is being imposed by creditors, which is a benefit. After all, lets be real … you should not be budgeting minimum payments and consistently living beyond your means. You should be budgeting with a plan to pay off the balance.

On the other hand, if your debt seems insurmountable, now is not the time to ignore the financial truth. Robbing Peter to pay Paul stops here. Consider this scenario:
The average consumer credit card debt is $8,400. Let’s say the interest rate is 18%. Your initial monthly minimum payment is $210 based on 2.5% of the balance. It will take you 30 years to pay off this debt with interest accumulating to over $12,000! At 4% the initial minimum payment becomes $336. It will take slightly over 14 years to remove this monthly albatross with interest mounting to $4955. The numbers prove the benefit of increased monthly balance percentages, but the additional $126 may seem impossible to forage from a pay check to pay check lifestyle.

Don’t panic. These tips may not totally result in paying off your balance, but they will help you come up with the increased 2% of your monthly debt. As always look at small ways to save, such as brown bagging your lunch. I say this time and time again yet not everyone believes the validity of this statement. But, I have watched my pennies all my life and see my dollars grow. Also, revaluate your tax withholdings if you received a refund last year. You don’t want to owe the government but your refund money that Uncle Sam is using can be put to better use by making timely credit card payments now. Please consult your accountant or CPA with tax related questions. In addition, lock up all credit cards so you are not tempted to add fuel to the fire. Also, seek financial help on budgeting, debt repayment, and your relationship to money from an expert.

This increase will be phased in by creditors with MBNA, Citibank and Bank of America leading the pack. A final word of caution, be very diligent not to make late payments. A huge hit in interest rate coupled with the spike in minimum percentage will be a double whamming on your outgoing cash flow.

A Knowledgeable Consumer is Powerful
The following is a snippet from the latest edition of Path to Achievement. I hope it spurs you to read the entire article found on the Education Center’s link at www.clearpathservices.com.
“I propose satisfaction and security result from our mentality, not our finances…
Since most of the United States is middle class, some folks state that the quandary of the rich does not apply. However, it does. As citizens we are raised in the richest country in the world. It is known globally as the land of opportunity. We believe being a millionaire is possible and if we can’t actually become a millionaire through net worth, well we will just live as close to one as possible. This leads to a facade of wealth. Truth is disregarded. There is no satisfaction and security in this lifestyle. As a matter of fact, it typically leads to financial ruin for the middle class through over extended credit, insolvency and bankruptcy.”

To read the entire article, please click on: http://www.clearpathservices.com/achievement/pta_ed3.htm

Seminars Worth Your Time
July 12 – August 2: Write Your Business Plan in 4 Weeks!
9:30 – noon: The Arizona Small Business Association, 4130 E. Van Buren St. Phoenix AZ
RSVP by July 10 at www.asba.com, Cost for all 4 weeks is only $60
Whether you are starting a business or changing your company strategies, a business plan is the essential tool that gives you focus and competitive advantage. The four-week course is lead by Valley entrepreneurs who know the value of this living document. ASBA TIME sponsors this program. Debi Kuehn is a TIME facilitator and creator of Write Your Business Plan in 4 Weeks!
Students say:
“Taking the plunge to write my business plan has had the most profound effect.” – Lucy Herman, Herman and Associates LLC
“Thoroughly enlightening and very useful” – Shona Patel, Hoogly River

July 19: Career Technical Education Conference
Tucson, This conference is not open to the public
Debi Kuehn will speak and answer teachers’ questions on student competencies for the financial field, focusing on what high school students need to know to pursue a career in various financial areas. Debi and other speakers at this state wide event will also inform teachers about the changes in this industry. Debi participated in setting Arizona’s financial educational competencies at the end of 2004.

Deborah A. Kuehn is the owner, educator and consumer advocate of Clear Path Financial Education Services. Clear Path believes knowledge is power and prosperity.

PH: 623.580.9293

Written by Deborah A. Kuehn, MBA
All rights reserved
Clear Path Financial Education Services is a registered trade name

Issue XVIII

June 1, 2005

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