STEP 3: Learn how to use the Master Plan forecasting software to help students and parents complete assignments.

Quick Start Guide — The best way to use this valuable ancillary tool as part of your class assignments, is to set up a personal financial plan for yourself first. This will be a wonderful way to begin applying the financial principles to your own life that you will be teaching in the classroom.

(Complete PDF user's manual available on the software CD)

Installation: Insert the CD, and follow all prompts for installing the program on your PC. Click on the Master Plan 5.2 icon from within programs to launch the software.

Create a New Plan: From the main file menu, click on File and select New Plan. Under the Add Plan window, enter your name, age, and desired retirement age. Don't worry about anything else on the screen. Click OK.

Create a Spending Plan (used in Unit 2, Lesson 2):

Step 1: Select Spending from the main menu and click on Spending Plan. Enter your gross monthly income, less all payroll taxes. If you know you will be getting a raise in the next 12 months, enter projected income less estimated taxes.

Step 2: Enter spending categories in the provided fields; these are based on the way you have spent money in the past. To determine this, examine past receipts, bank and credit card statements, check registers, etc.

Step 3: Enter the average amount you have spent in the past few months in each category in the Avg/Month column. Then decide how much you are going to spend in each category over the next 12 months. Enter the amount in the appropriate column.

Step 4: Decide if the expense for each category is fixed or variable. If you are married and would like to include your spouse in the process, decide with him or her which category each of you will track, then enter the spending amount in the his and her columns.

Be sure your total expenses for all categories do not exceed your net spendable income. These must balance! If they don't, cut back on variable expenses; if you have excess, create a savings category and deposit there.

Power Down Debt (used in Unit 4, Lesson 4):

Step 1: From the main menu, select Debts, then click on Add/Edit Debts. Enter all your debts including the interest rate, months remaining, monthly payoff, and principal.

Step 2: Assign priorities for payoff to your debts in the provided fields based on lowest to highest interest rate, shortest to longest maturity, or smallest to largest principal.

Step 3: Print the Real Debt Report, which shows exactly how much money you will pay including interest and principal, on all your debts by clicking on Debts in the main menu and Real Debt Report, then click the printer icon at the top of the screen.

Step 4: After your debts are arranged a priority for payoff, the software can help you analyze how to apply “Power Down” techniques to eliminate them as quickly as possible. When you Power Down debt, you pay off the first debt in your list and add the amount you were paying on it to the payment amount for the next debt. When that bill is paid in full, you continue combining amounts to create an “exponential” payoff amount for the next debt. This will allow you to pay off debt three to four times faster.

Step 5: Assign a Power Down amount for each debt by inputing the current monthly payment for that debt in the Power Down Amount field.

Step 6: If through tracking your spending you find “extra” money you have not been using wisely, you can also apply an “Accelerator Payment” to all of your debt. Select Debts in the main menu and click on Get Out of Debt Report. Click the Include “Accelerator Payment” in this report box and enter your desired amount. In the Interest Rate field, enter a conservative rate of return you hope to receive on the interest money you save by powering down. Click Run Report. This report will show you how many years it will take to get out of all debt if you apply Power Down amounts and Accelerator Payments to your debt.

Forecast Your Savings and Organize Finances to Protect from Loss and Taxes (used in Unit 3, Lesson 2 and Unit 8, Lesson 1):

Step 1: Select Savings from the main menu and click Investents and Savings. Enter each of your savings items depending on how they are taxed. Click on the appropriate “Tax Drawer” and enter description, current amount in the savings item, the annual deposit you make and the annual rate of return.

Step 2: Enter life insurance and capital gains items into their own drawers.

Step 3: Once your savings and debts are entered, you can uses the “Master Worksheet” to see what your debts and savings will mean for you in the future. Select Master Worksheet from the main menu. A snapshot of your current financial situation will be displayed, including how much you are paying in debt each month, how much your investments and savings will be worth at retirement, and how much of them will be subject to tax.

Step 4: Change debt and savings items from within the Master Worksheet to play “what if” scenarios with your money. Power Down debts to see how fast they can be eliminated and how that will affect your savings. Change savings items from taxed, to tax-deferred, to tax-free, etc. to see how you can keep more money protected from taxes depending on what type of retirement savings or investment account you put your money in. You can print the Master Worksheet by clicking on the printer icon.

Check Out Other Forecasting Features of the Software

Experiment with other areas of the Master Plan software, including the Retirement Worksheet. A hard copy of the worksheet will be assigned to students and their parents to complete. You can complete it online to see if you are on track to have enough money at your desired retirement age and how you can take steps each month to save that money. You may wish to assign the parents and students who have been using the Master Plan software to complete the Retirement Worksheet assignment from Unit 7 using the software instead of by hard copy.

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