Triune Pro Bono Frequently Asked Questions
- What is Triune Pro Bono?
- How can I balance my budget?
- Can I get out of debt?
- Can I handle a financial emergency?
- When should I start saving for retirement?
- How can I pay for my childrens' education?
- Is bankruptcy an option for me?
- Q. What is Triune Pro Bono?
A. Like many financial advisors, we feel a special obligation to make our professional skills and other resources available to those who cannot afford to pay for our services. Triune has taken a step beyond this obligation by developing a separate division, "Triune Pro Bono", which actively seeks clients who would otherwise not have access to a professional advisor. A certain segment of available Triune resources is set aside to provide these pro bono services.
- Q. How can I balance my budget?
A. The first step in managing your financial affairs is finding out what is really going on with your income and expenses. Unfortunately, most people don’t track their income and expenses each month, so they don't really know where all the money went. TPB will show you how to use some very simple systems that track all of your income and expenses, and after about three months or so you will begin to see just what is happening each month with your money. Then TPB will help you manage your future income and expenses through an easy-to-use budgeting and reporting system. Each month you will have a plan for each dollar you earn, what is spent, saved, invested or given away. TPB will help you see what your financial problems are and help you decide what action to take to balance your budget, spend less than you earn, save for emergencies, invest for the future and become a generous giver.
- Q. Can I get out of debt?
A. Debt is always a symptom of a deeper problem: spending more than you make. While few people have the desire and discipline to pay cash for a house (some do!), deciding to pay cash for everything except a home purchase is the first step of getting out of debt. You must begin at once to spend less than you make, so that the debt can eventually be paid, and then cash can be saved for future purchases. This may involve increasing income, delaying gratification or both.
TPB will help you put together a plan to pay off all of your debts. If your income is not sufficient to keep all of your payments current you may have to prioritize which creditor you pay first and how much you can pay, if anything, to those creditors with lower priority. Then when you have been successful in increasing income and/or reducing spending you can use the cash to systematically pay down your debts. TPB will work with you throughout this process to achieve your goal of becoming debt free. You may be forced to seek the protection of bankruptcy court in this process, but usually a plan can be developed that will avoid this extreme measure.
- Q. Can I handle a financial emergency?
A. Sadly, many people who come to TPB cannot handle a financial emergency given their current financial circumstances. Most people just don't think it is important to save enough cash to handle the emergencies that eventually hit each of us. They typically use borrowed money (primarily credit cards) to pay for emergency expenses, but then it seems every use of money becomes an emergency, because people are stuck in a cycle of paying back credit card companies in addition to paying for "normal" expenses. However, there are many ways to quickly accumulate an emergency fund to handle such circumstances.
For many people establishing an emergency fund is as simple as realizing that saving for emergencies, as well as for significant future purchases (such as cars, home improvements and vacations), needs to come before investing. People often have substantial retirement account balances but no cash (savings) available to meet emergency needs. Then when emergencies come, they borrow against their retirement funds if they can or use other credit to pay for emergency needs—both of which are very bad ideas. These people may need to stop investing until they have finished saving.
Other people may need to take more drastic measures, like selling some items they bought before they could really afford them. Others may need to take a second job to temporarily gain additional income, and save rather than spend that extra income. Whatever your situation, TPB will help you develop a plan to build up your savings so that cash, not credit, can be used in the future to meet emergency needs.
- Q. When should I start saving for retirement?
A. People should start saving for retirement only after first having an emergency fund saved (typically 3-6 months of necessary expenses) and no debt, except a first mortgage on your home. Many people "get the cart before the horse" and begin investing while they are still deeply in debt. This is essentially the same as borrowing money (usually at an extremely high interest rate) and investing that money, a very risky plan. If you start investing before you have saved enough to cover emergencies you may be forced to sell your investments at a bad time (the stock market does go down on occasion, sometimes way down), and if your investments are in retirement funds they may not be available to sell at any price.
If you begin investing only after you are debt free and have a reasonable emergency fund, you will have more cash flow to invest (no monthly debt payments), and the chances are much greater that your investments will "stick,” and not have be invaded to pay for emergency needs or large purchases for which you should also have been saving.
TPB will help you put together a plan to get out of debt, build up an emergency fund, set aside cash for future major purchases and then start your investment program.
- Q. How can I pay for my childrens' education?
A. You should start saving for higher education as early as possible, but only after you are able to invest enough money to be reasonably assured you will be able to retire with dignity. This is equivalent to the airline attendant telling you to put on your own oxygen mask before helping others (your children) with theirs. There are many ways to finance your childrens' education, but funding your retirement is, in the future, going to largely be up to you.
While the cost of higher education continues to rise rapidly, the "cost" of education often involves a standard of living that is unrealistic. There is no better time to learn the invaluable lesson of living frugally than during the college years, but many students take out student loans to support a lifestyle their parents achieved after working decades! Starting a career after graduation with tens or even hundreds of thousands of dollars of student loan debt is a very bad plan.
There are grants and scholarships available for those with unusual intelligence or just perseverance, and part-time, entry level jobs available in most locales for anyone that really wants to work. Community colleges offer a lower cost education alternative for the first two years, and many companies provide education assistance for their workers. So even if you, as a parent, cannot afford Ivy League educations for your children, there are alternatives if you plan ahead. TPB will help you determine how much you can afford to contribute to your childrens' education, and develop a plan to make it happen.
- Q. Is bankruptcy an option for me?
A. It may be, but it is usually a last resort. Most people who incur debt really do want to "make good" on their obligations. However, there can be circumstances largely beyond a person's control that result in financial disaster, and it was for just such circumstances that the bankruptcy laws were designed. Uninsured health care costs are a typical example of such circumstances, but then health care professionals are among the most caring and compassionate people on the planet, and may be willing to work out a payment plan you can, over time, manage. So even in this type of circumstance the protection of the bankruptcy court may not be needed if you are willing to work with your health care creditors. TPB will help you evaluate what you can afford to pay, so that you can determine if such a payment plan is realistic.
Another typical scenario is someone who has used personal credit to prop up a failing business venture, and amounts owed are far beyond the reasonable capabilities of the individual to pay. TPB can help you put together a personal balance sheet of what you own and what you owe, and a budget showing your ongoing personal earning capacity and spending needs, information that will allow a bankruptcy attorney to quickly assess whether bankruptcy is a viable option for you. TPB will also be available to meet with you and your attorney to assist you in making this decision.