Get Me Out of My Debt Dungeon! Juanita, a credit counselor, stared outside her office and saw the darkening sky, as a winter storm approached. Her next client, Bill, faced his own financial storm with debts mounting and no clear solution in sight. Juanita hunkered down to review his thick file, knowing that Bill would soon arrive looking for answers to his financial predicament. Juanita reviewed her notes summarizing Bill's current situation: Recent college graduate earning $36,000 as a salesperson at a local technology company. Base salary of $24,000 and $12,000 earned in commissions in the past year. His company has been struggling recently, and he is worried about potential layoffs. His three largest monthly expenses: 0 Rent: He rents a one-bedroom apartment in a "hip" part of the city for $1,200 per month. His lease is up next month, and he needs to let the landlord know if he wants to stay there. He pays his rent on-time every month. His parents, who live in the same city, have always offered him his old bedroom if he wants to move back in but would expect him to pay "some" rent. o Food: He loves dining out 2-3 times per week at nice restaurants with friends and spends about $500 per month on food using his debit card. o Entertainment: Concerts, sporting events, movies; Bill vowed that he would enjoy the city life and clearly has by spending about $500/month to entertain himself and friends. When Bill arrived for their meeting, Juanita thought a great starting point for their discussion would be to discuss his spending habits. Juanita's experience as a credit counselor had taught her that you couldn't treat the symptom (high debt levels) without addressing the cause (spending more than you take in) first. While Bill was anxious to talk about solutions first, Juanita pulled out a worksheet they worked through together. Answer this: 1. Complete the worksheet below to analyze Bill's current budget situation: Annual Salary + Commission Monthly Salary + Commission Monthly Take-home Pay Salary + Commission) (assume 75F of Monthly Monthly Expenses Rent Food Entertainment TOTAL Expenses Take-home Pay - Expenses Juanita realized that she needed to explain to Bill how her credit counseling services differed from the debt consolidation services whose commercials he loved. She shared this Youtube video and article with him to deepen his understanding of credit counseling services and help him draw distinctions between the two. Bill went on: Juanita, I have to admit that I am even more confused now. I know that you are a credit counselor and that you offer a bunch of services to help me. I am not sure how you differ from that debt consolidation firm we saw in the video. You both seem to provide the same set of services. Well, one pretty obvious difference is that they seem to have much better commercials and make claims that have a stronger appeal to me. Also, I don't understand why they charge me for their service and you're free. I always thought you got what you pay for so worried that your service isn't as good. Answer this: 8. Help Bill by identifying, in your own words, at least three differences between credit counselors and debt consolidation firms. 9. Which service do you think he should choose? Why? Get Me Out of My Debt Dungeon! Juanita, a credit counselor, stared outside her office and saw the darkening sky, as a winter storm approached. Her next client, Bill, faced his own financial storm with debts mounting and no clear solution in sight. Juanita hunkered down to review his thick file, knowing that Bill would soon arrive looking for answers to his financial predicament. Juanita reviewed her notes summarizing Bill's current situation: Recent college graduate earning $36,000 as a salesperson at a local technology company. Base salary of $24,000 and $12,000 earned in commissions in the past year. His company has been struggling recently, and he is worried about potential layoffs. His three largest monthly expenses: 0 Rent: He rents a one-bedroom apartment in a "hip" part of the city for $1,200 per month. His lease is up next month, and he needs to let the landlord know if he wants to stay there. He pays his rent on-time every month. His parents, who live in the same city, have always offered him his old bedroom if he wants to move back in but would expect him to pay "some" rent. o Food: He loves dining out 2-3 times per week at nice restaurants with friends and spends about $500 per month on food using his debit card. o Entertainment: Concerts, sporting events, movies; Bill vowed that he would enjoy the city life and clearly has by spending about $500/month to entertain himself and friends. When Bill arrived for their meeting, Juanita thought a great starting point for their discussion would be to discuss his spending habits. Juanita's experience as a credit counselor had taught her that you couldn't treat the symptom (high debt levels) without addressing the cause (spending more than you take in) first. While Bill was anxious to talk about solutions first, Juanita pulled out a worksheet they worked through together. Answer this: 1. Complete the worksheet below to analyze Bill's current budget situation: Annual Salary + Commission Monthly Salary + Commission Monthly Take-home Pay Salary + Commission) (assume 75F of Monthly Monthly Expenses Rent Food Entertainment TOTAL Expenses Take-home Pay - Expenses Juanita realized that she needed to explain to Bill how her credit counseling services differed from the debt consolidation services whose commercials he loved. She shared this Youtube video and article with him to deepen his understanding of credit counseling services and help him draw distinctions between the two. Bill went on: Juanita, I have to admit that I am even more confused now. I know that you are a credit counselor and that you offer a bunch of services to help me. I am not sure how you differ from that debt consolidation firm we saw in the video. You both seem to provide the same set of services. Well, one pretty obvious difference is that they seem to have much better commercials and make claims that have a stronger appeal to me. Also, I don't understand why they charge me for their service and you're free. I always thought you got what you pay for so worried that your service isn't as good. Answer this: 8. Help Bill by identifying, in your own words, at least three differences between credit counselors and debt consolidation firms. 9. Which service do you think he should choose? Why