Tools of Money Management

1. Tools of Money Management • Get and manage your income • Save money • Pay your bills • Get key documents in order • Protect your identity • Stay organized

2. Places to Put Savings • Envelopes—label them with your rules. Put the amount you are supposed to be saving into the savings envelope every time you get cash. • Savings account—you can set up a savings account at bank or credit union. If you are over 18, you can set up your own account without a custodian or joint owner. If you are under 18, you may need to a custodian or adult to co-signer with you.   • Online savings accounts—in addition to banks or credit unions you can visit in your community, you can open a savings account at an online bank. • Reloadable prepaid debit card—some prepaid debit cards offer a savings account feature. Visual Aid 3.2

3. Saving with a Paycheck • Direct Deposit—you can have your paycheck directly deposited into your savings account or checking account. If you use a checking account, you can then have a fixed amount automatically transferred to a savings account or some other kind of account. • Workplace-based savings opportunities—some employers will help you save for your retirement. Also money saved through work-place based retirement programs is not subject to income tax. So you also save on the amount of taxes you pay.

4. Loan Analysis Questions • How much is borrowed? • What is the interest rate for the pawnshop loan? • What is the interest rate for the credit union loan? • What collateral is required by the pawn shop? The credit union? • How much does the pawn shop loan cost? • How much does the credit union loan cost? • Why would people ever choose a pawn shop loan?

5. Banks versus Credit Unions Banks • For profit • You are a customer and anyone can be a customer • Profits go to owners and shareholders • Generally a wide range of products and services • Often many locations and online banking access • There are some things that can limit an individual from becoming a bank customer. Credit Unions • Non profit • You are a member owner—to join a credit union you have to meet member criteria. This is generally based on your job or where you live. • Profits are returned to the members through lower fees on products and services • Often fewer services than banks. • Often fewer locations than banks; online access to accounts depends on the credit union

6. Are Loans Assets? • Loans are not assets. • Loans are liabilities—when you have a loan, you owe someone money. • Loans can help you get assets, though. Most people use loans to get cars, educations and homes. • A loan gives you the ability to get an asset today, but obligates future income until the debt is paid off.

7. Budget Definition • A budget is really just a plan for how you will use your moneyto reach your goals. You set the goals. You make the plan using the resources you have.

8. Inputs for a Budget • To make a budget, you will need to know your sources of income: • Wages from a job • Earnings from self employment • Stipends from participation on the youth board or summer program • Gifts from family members or friends • Public benefits • As well as your uses of income: • Savings • Sharing—charitable contributions to other organizations • Debt repayment—credit card, student debt, pay day loan, and car payments for example • Expenses—all other expenses from rent and utilities to bus passes and gasoline to clothing and entertainment.

9. Online Budgeting • Spreadsheet on your computer • Budgeting software • Website-based budgeting • Apps for smart devices

10. Optional Visual Aid

11. Critical Documents • Certified copy of birth certificate • State picture identification card OR • Driver’s license • Green card or immigration documents (if applicable • Social Security Card • Medical records • Immunization records • School transcripts • Voter registration card • Bank or credit union account information • Credit reports Experian, Equifax and Transunion • Work permit if needed Visual Aid 3.10

12. Tips for Taking the Post-Training Assessment • Answer from your gut. Don’t over think the questions. • If you don’t know how to answer, just do the best you can. • If you have any questions, just let me know. • You will have about 10 minutes to complete this. • Please be sure to write your name and today’s date on the top of the form. Visual Aid 3.11

13. Talking Stick Questions • As a result of this training, what is one money management related thing you are going to start? • As a result of this training, what is one money management related thing you are going to continue doing? • As a result of this training, what is one money management related thing you are going to stop? Visual Aid 3.12

14. Web of Connectivity Questions • What is the most important thing you have learned? • What asset is it most important for you to build? What step will you take tomorrow to start building this asset? • What is something—information, skill, resource or tool—that you will be able to use starting tomorrow? • How has your social capital been strengthened or built through your experience? Visual Aid 3.13

15. Post-dated Letter to Yourself: Questions to guide your letter • What progress have you made toward your short and long terms goals? • Have you built any assets? Which ones? • Have you built your social capital? How? • How have you overcome obstacles? • How have you used the knowledge and skills gained through your participation in Keys to Your Financial Future to become more financially capable? Visual Aid 3.14