Tools of Money Management

• Get and manage your income• Save money• Pay your bills• Get key documents in order• Protect your identity• Stay organized

Visual Aid 3.1

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

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.

Visual Aid 3.3

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?

Visual Aid 3.4

Banks versus Credit UnionsBanks

•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

Visual Aid 3.5

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.

Visual Aid 3.6

Budget Definition

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

Visual Aid 3.7

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.

Visual Aid 3.8

Online Budgeting

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

Visual Aid 3.9

10

Housing (Rent + Insurance or PITI)

25%

Utilities, Furnishings and

Maintenance9%

Food13%

Clothing3%

Transportation16%

Healthcare6%

Entertainment6%

Personal care1%

Life insurance, retirement and

savings11%

Education2%

Charitable contributions

4%Other

4%

Uses of Net Income

Optional Visual Aid

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

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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

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

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?

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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