money matter$ financial education
TRANSCRIPT
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Money Matter$ Workshop
Home Conference2012Sue Rogan
MD CASH Campaign
MD CASH Campaign
Maryland CASH (Creating Assets, Savings and Hope) Campaign: a network of organizations from across Maryland that seeks to improve the financial stability of working families.
Advocates on behalf of low-and moderate-income taxpayers throughout the state
Assists partners in capacity building and training—VITA sites
Provides financial education programs
MD CASH Campaign
In partnership with Consumer Credit Counseling Service of Maryland and Delaware, Inc., MD CASH Campaign created:
Maryland Money Helpline (877-254-1097)
free financial service where callers may speak with a certified, nonprofit financial counselor about debt, credit, budgeting, job loss and
more.
Objectives:• Clients explore their
beliefs/values/attitudes about money
Resources: • Utah State University CE's
"Financial Attitudes and Goals"
Tools:• Money Habitudes• Money Personality Quiz
Financial Beliefs/Attitudes
Financial Beliefs
“Money”—What comes to mind?
Money Memories
How do you use your $?
Influencing Factors —family; social, religious; media
Financial Goals, Tools & Resources
Objective: Brainstorm with client on various "term" financial goals: • Short Term Financial Goals: Up to a year• Mid Term Financial Goals: 3-7 years• Long Term Goals Goals: 7+ years
Resources: www.nefe.org; www.mymoney.gov
Tools: Write some examples of financial goals on note cards and have client sort them into long term and short term PB & J Exercise
Create a "vision board“
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Financial Goal Statement
“We want to buy a car in 5 years (May 2XXX). We will save $16.66 per month (a total of
$1,000) to down payment.”
Spending Plans
Objective: Clients track their spending, create a real time Spending Plan, and learn to check it frequently to stay on track Resources: MD Extension Fact Sheets: http://extension.umd.edu/family/ManagingMoney/index.cfm MD CASH Campaign toolkit: www.mdcash.org
Tools: Sample Spending Plans; Excel spreadsheet, Software such as Quicken, online sites such as www.mint.com, Bean Game
Spending Plan
Spending log
Put fixed expenses first
Identify needs vs. wants
Put savings/goals in
Prioritize spending plan
Estimate Income
wages, salaries
cash gifts, inheritances
child support, alimony
tax refunds
farm income
interest dividends
Social Security
public assistance
rental income
commissions, tips, bonuses
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Define Expenses
Fixed
Flexible
Periodic
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Fixed Expenses
Due on specific dates, in specific amounts
Less control
Examples: taxes, rent, car payment, utility budget plans
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Flexible
Fixed
Flexible
Periodic
Flexible Expenses
Living expenses that vary from month to month
More control over amounts spent
Examples: telephone, food, clothing, entertainment, transportation, gifts
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Fixed
Flexible
Periodic
Periodic Expenses
Occur occasionally during the year
Catch you off-guard
Examples: automobile insurance premiums, car or appliance repairs or replacement, tag renewals
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Fixed
Flexible
Periodic
Prioritized Spending
What
about
Starbucks?
Ways of Increasing Income
Upgrade present job
Additional family member to work
Part-time jobs
Overtime
Government assistance
Child support
Social security
Veterans benefits
Food stamps
Unemployment insurance
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Ways of Decreasing Expenses
Energy Audit, implement energy efficient ideas, ck energy bill before moving in
Thrift Store shopping
Use coupons if it makes Cents
Avoid fees
Don’t go into stores
Others?
Credit
Objectives: Clients-- learn how to get their free credit report, how to dispute errors and ways to improve their credit score.
Resources: www.annualcreditreport.com ; www.mymoney.gov; www.ftc.gov
Tools: FTC Brochure, local credit cafes, pie chart of credit score—tipsheet on www.mdcash.org
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What is Credit?
Copyright 2011 Maryland CASH Campaign
• Money or services given with expectation of repayment, usually with interest.o Interest = Money paid for a borrower’s use
of money, calculated as a percentage of the money borrowed and paid over a specified time.
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Why Credit is Important
Copyright 2011 Maryland CASH Campaign
• Credit• Housing• Insurance• Employment
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What is a Credit Report?• Credit Report: a report that is compiled by credit
reporting bureaus on an individual’s history of debt, credit and borrowing behavior
• Major Credit Reporting Bureaus:o Equifaxo Experiano TransUnion
• Retrieve a free consumer credit report at AnnualCreditReport.com or call 1-877-322-8228
What’s on Your Credit Report?
Personal Information
Account Information
Inquiries
Collections
Public Record Information
Creditor’s Contact Information
How Long Do Items Stay on Credit Report?
7 years?
10 years?
Indefinitely?
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Sample Credit Report
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Disputing Incorrect Information
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What is a Credit Score?• Credit Score: a number based on the
analysis of an individual’s credit reports that represents the creditworthiness of that person.
• Fair Isaac Corporation (FICO) is renowned for their credit scoring model.
• Credit scores are available for purchase. Alternatively, you can use credit score estimators.
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Basics of Credit Scoring
Copyright 2011 Maryland CASH Campaign
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Myths About Credit• Close old accounts.• Never close any
accounts.• You must carry a balance
to build credit.• Individuals with higher
incomes have higher credit scores.
• If I get married, my spouse and I will have a joint credit score.
• All credit scores are the same.
4 C’s of Credit
Character
Capacity
Collateral
Capital
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How to Build/Rebuild Credit
• Open a bank or Credit Union checking and savings account
• Secured credit card
• Installment Credit Account
• Department store Charge Card
• Co-Signer/Authorized User
Managing Debt
Objective: Client learns to verify debt, prioritize debt payments and create a plan to get out of debt.
Resources: National Consumer Law Center, www.nclc.org Nolo, www.nolo.com , credit counseling agencies, FTC, www.ftc.gov
Tools: Debt Worksheet, sample creditor letters
Managing Debt
Rip off the band aid—assessment of debt
Create Budget
Emergency Fund
Call Creditors
Payment Plan—everything in writing!
How to choose what to pay first?
Summary
Help Clients:
Understand their money values/habits
Create a Spending Plan and Check it—weekly
Learn that Emergency Savings is critical
Develop specific steps to attain financial goals
Understand their credit history and ways to improve score
Become empowered to avoid/get out of debt
