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 seventh edition of Clear Path Credit Consultants' 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.

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Tips to Take Charge of Your Charging

What puts you in control of your financial future and creates financial freedom? It is something everyone has the ability to do; create a spending plan, also known as a budget, that includes financial goals and live within your means. However, sometimes individuals do not know what their income will buy them. This starts the process of living outside of their earnings. The first phase is charging purchases without realizing or worrying how the bill will be paid. The second phase is charging to bridge the ever widening gap in your cash flow created by a lifestyle larger than your paycheck. The final phase culminates in taking cash advances from one credit card to pay another. Not everyone is in mounds of debt, but everyone can benefit from examining their credit card and spending habits.

Tips to take charge of your charging and spending:
1) Realize the difference of spending money to achieve goals and spending money simply to spend money. Also, be aware if you are charging an item you can not afford to pay during the grace period, you are not spending money ... you are going into debt. There is a huge difference.
2) Contact your creditors and set your own high credit limit.
3) Be thrifty. Examples of frugalness are: look for bargains, shop with a list and leave the credit cards at home, go to a matinee to avoid full price movie prices, evaluate modern conveniences (do you really need two phone lines in your home and a cell phone?) and make homemade meals instead of dining out. Learn to be creative and ask yourself," Will spending this money enhance my life?"
4) Keep a log of money saving tips that work for you.
5) Track your credit purchases. Piddle things put on a credit card add up, particularly with high interest rates. If you use numerous credit cards, wrap the charge receipt around the card. This serves two purposes: a) it will become apparent how often you charge and b) the receipts are easily located so you can calculate a weekly total of your charging. Pose to yourself, "Is this credit card balance what I want my life to look like?"
6) Minimize the number of credit cards. Two or three credit cards are all anyone needs. Writing monthly checks to nine creditors is time consuming and remembering multiple due dates makes you a prime candidate for late fees.

Please keep in mind, you may be able to afford your current lifestyle, but what if an altering event occurs? Such as you are laid off or your spouse dies. Are you living to close to the financial edge? Ideally, credit card balances should not be more than ten percent of your after tax income. If your debt is unmanageable a lifestyle change will need to occur. This takes into consideration transitioning from your current spending rituals. It will not happen in a blink of an eye, but with dedication and perseverance living a financially secure life is an obtainable goal. Clear Path Credit Consultants can assist by listening to you, creating a spending plan and developing a method to repay debt.

Being a Knowledgeable Consumer is Powerful

To be a knowledgeable consumer, Clear Path Credit Consultants challenges you to think differently about wealth. Who is more wealthy: a) Mr. and Ms. Jones who make an annual household income of $125,000, initially mortgaged a $250,000 home and drive luxury foreign cars or b) Mr. and Ms. Smith who make an annual household income of $75,000, initially mortgaged a $150,000 home and drive reliable cars owned outright? The answer is: it depends on net worth.

Keeping up with the Joneses is a common phrase that many people acknowledge as a way of life. It is a mantra, even a battle cry. However, here is where we need to rethink our belief or wealtlh. Net worth is defined as assets minus liabilities. It is your equity. A behind the scene look at the Joneses and Smiths reveal:

The Joneses: Their beautiful $250,000 home is a total liability as opposed to an asset. They sucked the equity out of the home through a cash out refinance to partially pay off $75,000 in credit card debt. Since this was the second refinancing of the home, the lender snuck in a prepayment penalty of three percent. Therefore, they are socked with an out of pocket fee of thousands of dollars if the house is sold prior to paying off the mortgage. In addition, more is owed on the luxury cars than they are worth, thanks to buying a new car every two years and rolling the old loan into the price of the new car.

The Smiths: When purchasing their home, the down payment was twenty percent and did not require private mortgage insurance (PMI). This saved approximately one hundred dollars a month in mortgage payments. Also, over the last few years the equity in the home has grown. Their six and seven year old cars are well maintained and adequate savings are in the bank for "wear and tear" repairs. The money saved on car payments is being banked so the next vehicle will not need an auto loan to drive off the car lot. They are convenience users when it comes to credit cards, meaning the balances are paid monthly and no finance charges occur.

In this simplified illustration, it is apparent the Smiths have more net worth than the Joneses due to their ownership in the assets and less liability. The Smiths highlight that financial satisfaction has more to do with how you manage your money than it does with the amount of money you have!

Is being wealthy an image you are maintaining or a plan of financial security? Clear Path Credit Consultants builds its reputation through analyzing clients' standards of living and their emotional attachment to money.

Business Minded

Management decisions show up on financial statements. With this in mind, small business owners should ask :
* Am I confident my billing rate is covering business overhead and providing income not only to grow my business, but cover my standard of living?
* Do I have exact business goals and a strategy to reach them and how far do I need to forecast?
* Why is cash flow more important than profit for a business looking to expand?
* What does retained earnings mean to me?
* Is the motto,"you need to spend money to make money" valid...or are there successful ways to make money without spending money?
* Why is cash flow the most important of the three financial statements (cash flow, income and balance)?
* What are the warning signs of a cash flow crisis and how are they corrected?

Clear Path Credit Consultants offers money management skill sessions and cash flow budgets to increase your knowledge and business success.

Seminars Worth your Time

Consumer Alert: What the Credit Industry Does Not Want You to Consider: Being a knowledgeable consumer is powerful! Financial institutions have hefty marketing budgets and many consumers believe the bombarding advertisements are in their best interest. The fact is this industry makes money off of our money and is far from customer friendly, as witnessed by the Federal Trade Commission’s attempt to regulate it. Join Deborah Kuehn MBA, owner of Clear Path Credit Consultants, to become informed on the decisions you make regarding debt counseling and consolidation, mortgages, refinancing, home equity loans and lines of credit, foreclosure, balance transfers, cash advances and auto insurance. This presentation will dissect actual documents and advertisements.
The free lecture will be held as part of the Money Wise Mastermind group on October 30, 2003 at 11:30 a.m. in La Madeleine’s Restaurant (Tatum & Shea, Scottsdale). Non-members of Money Wise are welcome. So please come and enjoy lunch while unlocking the hush –hush of financial services. Registration is not necessary. For further information please call: 623-580-9293 / Clear Path Credit Consultants.

Success Spa presents Organization and Other Juggling Acts During the Holidays: Topics and Speakers are noted. * Be organized and enjoy the holidays (Sue Shipman, Ultimate Oganizers), *Downsize holiday spending, not holiday joy (Deborah Kuehn MBA, Clear Path Credit Consultants) *Balancing you and your family (Kathleen Todd, life coach) *Enjoy being single during the holidays (Deb Wingo, life coach) and *Easy party apetizers (Sarah Teselle). Held November 1, 2003 from 8:30 a.m. to 3:30 p.m. at Southwest Institute of the Healing Arts (1100 E. Apache, Tempe). Continental breakfast and snacks provided. Ten percent of proceeds to benefit the Casey Family Foundation (scholarships for foster children). Cost: $50.00/person (full day) $25/person (half day). Bring a friend for FREE if you preregister! Contact: Megan Davis, MSW at 480-768-0175.

What are you doing to keep your household and business finances prosperous: Join Deborah Kuehn MBA, owner of Clear Path Credit Consultants to discuss relevant approaches to managing both aspects of a small business owner’s life. This twenty-minute presentation is interactive and will conclude with a brief time to ask credit related questions. Held on November 5, 2003 at Border and Books (73rd Ave & Bell Road) from 10:30 a.m. to 11:30 a.m. as part of the Successful Homebased Business Networking Group. Open to the public.

Upcoming in Footsteps Along the Path

Next issue look for information on survivors' responsibilities of debt repayment upon a family member's death.

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Deborah A. Kuehn is the sole proprietor of Clear Path Credit Consultants, a financial management education service. Clear Path Credit Consultants teaches people to reach their financial goals and create a solvent and credit worthy lifestyle.
"Clear Path Credit Consultants: Helping you sleep better at night."
PH: 623-580-9293


This issue is dedicated to Clear Path Credit Consultants' anniversary!

Written by Deborah A. Kuehn, MBA
All rights reserved
Clear Path Credit Consultants is a registered trade name
Issue VII
October 17, 2003

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