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Financial Empowerment Curriculum Moving Ahead Through Financial Management

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Financial Empowerment Curriculum Moving Ahead Through Financial Management Module One: Understanding Financial Abuse Keeping Safe and Starting Over – PowerPoint PPT presentation

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Title: Financial Empowerment Curriculum Moving Ahead Through Financial Management


1
Financial Empowerment Curriculum
Moving Ahead Through Financial Management
Module One Understanding Financial Abuse Keeping
Safe and Starting Over
2
Financial Empowerment Curriculum
3
Module One Objectives
  • Recognize the signs of a financially abusive
    relationship.
  • Recall how to keep safe after ending a
    financially abusive relationship.
  • Explain the financial impact of separation,
    divorce and child support.
  • Describe some of the consequences of disclosing
    abuse.
  • Explain the challenges to maintaining your
    privacy and changing your identity in regard to
    financial abuse.

4
Module One Opening Exercise
  • Before we begin to discuss financially abusive
    relationships, take a moment to reflect on your
    personal beliefs and ideas.
  • What messages were you given about money growing
    up?
  • How has that impacted you today?
  • What messages about money do battered women get
    in abusive relationships?

5
Module One Understanding Financial
Abuse Financially Abusive Relationships Safety
Planning Separation, Divorce and Child
Support Disclosing Abuse Privacy Challenges and
Identity Change
5
6
Financially Abusive
Relationships
  • What does a healthy financial relationship look
    like?
  • Both partners have access to financial statements
    although one partner might manage bill paying
  • Couples identify when they have different values
    about money and negotiate financial goals
  • Both recognize and respect that decision-making
    is equal regardless of who earns more income

7
Financially Abusive
Relationships
  • What does a healthy financial relationship look
    like?
  • Each partner has access to money on their own
  • Both are knowledgeable how money is spent

7
8
Financially Abusive
Relationships
  • What is financial abuse?
  • Financial abuse often begins subtly and
    progresses over time
  • The aim of financial abuse is to gain power and
    control in a relationship
  • Every type of abuse is aimed at attaining and
    maintaining control over another person
  • Abuse traps a person in a relationship

8
9
Financially Abusive
Relationships
  • What does financial abuse look like?
  • Controlling how money is spent
  • Withholding money or giving an allowance
  • Withholding basic living resources, medication or
    food
  • Not allowing you to work or earn money
  • Forcing you to work
  • Stealing money from you or your family
  • Stealing your identity, money, credit or property

9
10
Financially Abusive
Relationships
  • A partner may be abusive if he
  • Makes financial decisions without consulting you
  • Forbids you from working or attending school
  • Overuses your credit cards or refuses to pay the
    bills
  • Forces you to file fraudulent tax claims
  • Prevents you from owning or using credit cards
  • Harasses you at your workplace
  • Claims you cheat on your benefits
  • Forces you to sign over assets and
    power-of-attorney

11
Module One Understanding Financial
Abuse Financially Abusive Relationships Safety
Planning Separation, Divorce and Child
Support Disclosing Abuse Privacy Challenges and
Identity Change
11
12
Safety Planning
Give hope and help the woman manage in small
steps Step One Evaluate current personal
finances. Step Two Assess all assets and
liabilities. Step Three Find ways to save
money immediately. Step Four Seek financial
independence, one step at a time.
12
13
Safety Planning
  • Gaining access to assets
  • Strategies to explore while in the relationship
  • Put aside money from bonuses or increases
  • Earn additional income from recycling, sale of
    assets, etc.
  • Put extra income in private separate account,
    safe deposit box or in safe keeping with trusted
    family or friend
  • Strategies when leaving a relationships
  • Consider taking half the joint funds immediately
    upon leaving (75 if you have children), and
    remember this is for protection
  • Immediately open a separate bank account or safe
    deposit box. Change all direct deposits to a new
    account
  • Change all pin numbers

14
Safety Planning
  • Consider storing documents in the following
    categories
  • Financial Records
  • Retirement, life insurance
  • Legal Documents
  • Child support or custody papers, divorce decree
  • Property Documents
  • Record of repairs, large purchases, lease
    agreements
  • Health Records
  • Immunizations, statement from doctors
  • Expense Documents
  • Credit card statements, utility bills

15
Safety Planning
  • Disclosing Abuse
  • Assist the survivor in understanding the pros and
    cons of disclosing abuse.
  • Sometimes its best not to disclose current or
    past abuse because it can have a negative impact
  • Some people may respond insensitively and or
    blame the survivor for involvement in the
    situation
  • The survivor may experience discrimination in
    employment, housing and access to services

15
16
Safety Planning
  • How can an order of protection help secure
    finances?
  • It can remove a batterer from the home
  • It can prohibit an abuser from going to the
    survivors home or work
  • Order of protection can be a tool for accessing
    economic relief
  • Examples temporary child support, spousal
    support, mortgage and rent payment, etc.
  • However, policies and practices might differ by
    state

16
17
Safety Planning
  • Housing search
  • If a potential landlord checks the survivors
    credit report, the abuser can discover her new
    address
  • Limit housing search to private property owners
    rather than larger property-management firms
  • Private property owners may use proof of credit
    history that a survivor provides rather than
    checking with a credit bureau
  • A survivor might have an option to supply a copy
    of her credit report for housing applications
  • A roommate who will agree to have the utilities
    listed in their name may be an option

18
Safety Planning
  • Computer safety
  • Find out how much of your information is on the
    Internet by searching for your name, phone number
    and address
  • Be cautious about completing applications online
    or using the Internet to e-mail a landlord or
    mortgage company
  • Information sent over the Internet can be
    intercepted or monitored
  • To protect your privacy, fax the information or
    send it by mail
  • If available, utilize state address
    confidentiality programs

19
Safety Planning
  • How do you stay safe at your workplace?
  • If safe to disclose, provide a photograph of the
    abuser
  • If possible the survivor might make arrangements
    to be escorted to and from the parking lot
  • Have telephone calls screened
  • Change work schedule and travel route to and from
    work
  • Save threatening e-mails, voice mails, letters
    and gifts
  • Request that workspace be relocated to a more
    secure area
  • Get a donated cell phone from a local domestic
    violence shelter

19
20
Module One Understanding Financial
Abuse Financially Abusive Relationships Safety
Planning Separation, Divorce and Child Support
Disclosing Abuse Privacy Challenges and Identity
Change
21
Separation, Divorce and
Child Support
  • Do the following prior meeting with an attorney
  • Take an inventory of possessions and list these
    in three categories items that are yours, items
    that are your partners, and items you own
    together
  • Determine living expenses, including expenses
    related to the children
  • Research current insurance coverage
  • Remember that less time with an attorney equals
    to money saved

22
Separation, Divorce and
Child Support
  • Important documents to take
  • Past income tax returns
  • One of your partners paycheck stubs
  • Copies of your partners employee-benefit
    statement
  • Your wish list of assets you would like to retain

23
Separation, Divorce and
Child Support
  • What about child support?
  • You may be able to collect child support if you
    have at least one child under eighteen
  • You can pursue child support enforcement in
    several ways by working with your local child
    support enforcement agency or going to court
  • People who have received assistance under TANF,
    Medicaid and federally-assisted foster care
    programs are automatically referred for
    child-support enforcement services
  • .

23
24
Module One Understanding Financial
Abuse Financially Abusive Relationships Safety
Planning Separation, Divorce and Child Support
Disclosing Abuse Privacy Challenges and Identity
Change
25
Disclosing Abuse
  • Contact DHS for public assistance programs
  • Discuss the pros and cons of disclosing domestic
    violence
  • Request DV indicator flags to placed within your
    personal file
  • Once you receive public benefits, you will have
    regular contact with your caseworker and be
    required to demonstrate that you meet
    requirements
  • Be prepared to answer questions about your
    finances
  • If denied, you have a right to appeal the
    decision
  • Federal and statewide public assistance programs
    have a welfare-to-work policy that requires
    participants in public assistance programs to
    undergo job training and find work if
    FVO is not applied

26
Disclosing Abuse
  • Family Violence Options (FVO) provides special
    provisions
  • Passed as part of the Personal Responsibility
    Work Opportunity Reconciliation Act of 1996
  • Safety net for victims of domestic violence
  • Option gives states flexibility to address
    specific problems facing poor women who survive
    domestic violence
  • States that adopt Family Violence Option (FVO)
    must
  • Conduct individualized client assessment by a
    person trained in domestic violence
  • Provide a waiver from TANF and child support
    requirements, accompanied by a service plan
    developed by someone trained in domestic violence
  • Can include extending the time limit and family
    cap provisions

27
Disclosing Abuse
  • Points to consider in disclosing abuse
  • Analyze policies to determine the short and
    long-term implications of disclosure to courts,
    TANF and/or employers
  • Research employers confidentiality program and
    employee-assistance program
  • Learn about legal rights to take time off, such
    as extended-leave or vacation-time policies

28
Module One Understanding Financial
Abuse Financially Abusive Relationships Safety
Planning Separation, Divorce and Child
Support Disclosing Abuse Privacy Challenges and
Identity Change
28
29
Privacy Challenges and
Identity Change
  • Consider the following before a change of
    identity
  • Check if your state has an address
    confidentiality program
  • Consider getting a P.O. Box
  • Contact banks, utilities, credit cards, phone
    companies, etc.
  • Place a new or extra password on account
  • Reduce the number of accounts in survivors name
  • Find housing that includes utilities in the
    monthly rent

30
Privacy Challenges and
Identity Change
  • As you consider any change, beware of identity
    theft
  • Account take-over occurs when someone acquires
    your existing credit account information and
    purchases products and services using the actual
    credit card or the account number and expiration
    date
  • Application fraud, also called true-name
    fraud, occurs when someone uses your Social
    Security Number and other identifying information
    to open new accounts in your name

31
Privacy Challenges and
Identity Change
  • How can someone locate personal information?
  • Digging through trash bins for credit card
    applications and documents containing your date
    of birth or SSN
  • Stealing mail from the mailbox to obtain newly
    issued credit cards, bank and credit card
    statements, etc.
  • Accessing a credit report fraudulently (e.g.,
    pose as an employer, loan officer or landlord to
    obtain information)
  • Using the Internet to track personal information
    or pay an information broker for a background
    check report

32
Privacy Challenges and
Identity Change
  • Know what information is publically available
  • Learn How Your Financial Institution Manages Data
  • Read Privacy Notices
  • Shred Everything
  • Understand Opt-Out Choices
  • Beware of Requests for Personal Information
  • Change Passwords and PINs
  • Practice Computer Safety
  • Purchase Identity Theft Insurance

33
Module One Review Exercise
  • Think about what we have discussed during the
    past hour.
  • What do you believe was the most important piece
    of information you learned today?
  • What is one action item you will commit to doing
    to improve your current situation?
  • Be prepared to share your ideas and thoughts with
    the class.
  • You have five minutes.

33
34
Financial Empowerment Curriculum
Moving Ahead Through Financial Management
THANK YOU!
35
Financial Empowerment Curriculum
Moving Ahead Through Financial Management
Module Two Learning Financial Fundamentals Income
and Assets Debts and Liabilities
36
Financial Empowerment Curriculum
37
Module Two Objectives
  • Explain the basic concepts related to finance
    management.
  • Evaluate possible financial resources and
    assistance.
  • Review budgeting basics and saving strategies.
  • Identify sources of income and uncover your
    assets.
  • Recall how to manage your debt and determine your
    liabilities.
  • Explain the various banking options available to
    you.

38
Module Two Opening Exercise
  • Before we begin to discuss basic financial
    fundamentals, I want you to take a moment to
    reflect on your personal experience.
  • On a scale of 1-10, how comfortable are you with
    your personal finances?
  • Do you regularly budget?
  • Be prepared to share your ideas and thoughts with
    the class.
  • You have five minutes.

39
Module Two Learning Financial
Fundamentals Finance Management Budgeting
and Saving Assets and Liabilities Banking
Options
40
Finance Management
  • Prioritizing needs
  • It is important to differentiate between a need
    and a want when making financial decisions
  • A need is something essential you must have in
    order to survive and live
  • Needs are must haves such as food and shelter
  • A want is not essential but makes life easier
  • However, battered women must identify wants and
    needs for themselves

41
Finance Management
  • Getting started
  • Become Informed
  • Talk to friends and co-workers who you trust and
    ask them for advice on financial planning. Watch
    money-management television programs and read
    about personal finance.
  • Worst-Case Scenarios
  • Ask yourself, Whats the worst thing that can
    happen to me in my situation? Is the worst-case
    financial scenario something you can handle?
  • Take Action
  • Once youve gathered sufficient data and
    information, be decisive and take action.

42
Module Two Learning Financial
Fundamentals Finance Management Budgeting
and Saving Assets and Liabilities Banking
Options
43
Budgeting and Saving
  • What is a budget?
  • A budget is a tool that will help you make
    critical spending decisions.
  • A good budget can help keep spending on track and
    uncover hidden cash flow problems that might free
    up more money.
  • Freeing up additional money can help move an
    individual closer to achieving other goals.
  • Freeing up money can help a survivor minimize
    financial strain and pay down debt.
  • Debt is common in the United States, and there
    are many resources to help you manage it.

43
44
Budgeting and Saving
  • Complete the following steps to create a
    personalized budget
  • Step 1 Identify your net monthly income
  • This is the money that comes into your household,
    after deducting taxes, Social Security insurance,
    etc.
  • Step 2 Identify your monthly expenses
  • Monthly expenses include rent and phone bills, as
    well as those that occur periodically, like car
    insurance and medical expenses.
  • Step 3 Subtract your monthly expenses from your
    income
  • The difference between your income and expenses
    indicates whether or not you have any money to
    spare. Can you reduce expenses or earn more money
    to cover shortages?

45
Budgeting and Saving
Below is the first half of a budgeting worksheet
to review.
46
Budgeting and Saving
Below is the second half of a budgeting worksheet
to review.
47
Budgeting and Saving
  • What is the correlation between financial goals
    and emotions?
  • For many of us, emotions and money are closely
    tied to spending
  • After a divorce or separation, many women finally
    feel free since their partner typically
    controlled all the spending
  • Woman often feel like they deserve to buy new
    things and enjoy their new freedom after leaving
    an abusive relationship
  • Shopping can become an outlet or avenue for
    relief

48
Budgeting and Saving
What are ways to treat yourself without breaking
the bank?
49
Budgeting and Saving
  • Why is saving money so important?
  • A goal for an emergency fund should be to have
    enough money to pay three months of living
    expenses.
  • Its important to put money away consistently.
  • Its better to save 10 every month than to save
    25 only occasionally. Put money aside by making
    a deposit to your account as though you were
    paying a monthly bill.
  • The secret to saving money is the miracle of
    compound interest.
  • Example, if a 20-year-old makes a one-time 5,000
    contribution to her retirement account with eight
    percent return, it will grow to 160,000 by the
    time she retires at age 65.
  • But if she waits until shes 39, that 5,000
    would only grow
    to 40,000.

50
Budgeting and Saving
  • Below is a summary of the typical types of
    savings accounts
  • Interest-Earning Savings Accounts Youll earn
    about two percent interest on your savings and
    receive a monthly statement in the mail. Funds
    can be withdrawn at any time.
  • Money Market Accounts These pay about one-half
    percent higher interest than savings accounts,
    but may require a higher minimum balance. You can
    usually make as many deposits as you like for
    free, but you can only write three checks each
    month.
  • Certificates of Deposit If you have money that
    can be tied up for three months to six years,
    certificates of deposit will offer the highest
    interest rates, depending on the term you choose.
    There are stiff
    penalties for early withdrawals, so choose a
    term you
    can live with.

51
Module Two Learning Financial
Fundamentals Finance Management Budgeting
and Saving Assets and Liabilities Banking
Options
52
Assets and Liabilities
  • First research your partners assets and personal
    wealth
  • Are your property and financial assets held in
    both of your names?
  • Is the home or other property in both names?
  • Do they have joint bank accounts?
  • Is there a pension or retirement plan from
    current and previous jobs?
  • Can you find out what information is required
    before a pension plan will pay benefits directly
    to the survivor?

53
Assets and Liabilities
  • If you have the time, research the following
  • Are there antiques, tools, artwork or collections
    whose value could be underestimated?
  • Is there income that has not been reported on tax
    returns or financial statements?
  • Are there any certificates of deposit?
  • Is there a business?

54
Assets and Liabilities
  • First research your personal debts and personal
    liabilities.
  • Make a list of your outstanding debts.
  • Figure out how much you owe. Include educational
    loans, home improvement loans, checking-account
    overdrafts, personal loans, rent-to-own
    agreements and other installment purchases.
  • Prioritize and decide which debts to pay first.
  • Sort your list by interest rate, putting the
    account with the highest interest rate at the
    top.
  • Find credit cards and loans with the lowest
    interest rate.
  • Lower interest rates are available for good
    customers, but you must request them. Ask your
    credit card company if they would consider
    lowering your rate.

55
Assets and Liabilities
Below is a chart to help you manage and pay off
debt
56
Module Two Learning Financial
Fundamentals Finance Management Budgeting
and Saving Assets and Liabilities Banking
Options
57
Banking Options
  • Familiarize yourself with the various banking
    options
  • Banks
  • Banks are financial institutions that accept
    deposits and channel money into lending
    activities. Traditional banks serve the general
    public.
  • Credit Unions
  • Credit unions are community-based financial
    cooperatives that offer a wide- range of services
    and serve their members.
  • Payday Lenders Car Title Loans
  • Payday lenders provide small cash advances using
    a postdated personal check. Although the loans
    are short-term, the loan fees are nearly equal to
    a 400 percent annual percentage rate (APR).
  • Check Cashing Stores
  • Check cashing stores are small businesses that
    cash
    checks for a fee. In general the fee is four
    percent.

58
Banking Options
  • Determine which banking option is best for your
    situation
  • Do you have the required minimum amount to open
    up an account at a bank or credit union?
  • If you want to open up your account at a credit
    union, do you know how to become a member?
  • Are the banks hours of operation and locations
    convenient with your schedule?

59
Module Two Review Exercise
  • Think about what we have discussed during the
    past hour.
  • What do you believe was the most important piece
    of information you learned today?
  • What is one action item you will commit to doing
    to improve your current situation?
  • Be prepared to share your ideas and thoughts with
    the class.
  • You have five minutes.

60
Financial Empowerment Curriculum
Moving Ahead Through Financial Management
THANK YOU!
61
Financial Empowerment Curriculum
Moving Ahead Through Financial Management
Module Three Mastering Credit Basics Reviewing,
Understanding and Improving Your Credit
62
Financial Empowerment Curriculum
63
Module Three Objectives
  • Explain how to access and review your credit
    report.
  • Identify the factors that control your credit
    report and credit score.
  • Recall strategies that will help you increase
    your credit score.
  • Describe the impact of bankruptcy.

64
Module Three Opening Exercise
  • Before we begin to discuss basic financial
    fundamentals, I want you to take a moment to
    reflect on your personal experience.
  • On a scale of 1-10, how well do you understand
    your credit report
  • Have you ever requested a copy of your credit
    report? What about your credit score?
  • Be prepared to share your ideas and thoughts with
    the class.
  • You have five minutes.

64
65
Module Three Mastering Credit
Basics Reviewing Your Credit
Report Understanding Your Credit Score Improving
Your Credit Score Understanding Bankruptcy
66
Reviewing Your Credit Report
  • To master your credit you need to obtain your
    credit report.
  • Each of the three credit reporting agencies must
    provide you with a free copy of your credit
    report every 12 months (upon request).
  • A central Website handles requests for the three
    agencies and you may order your reports online,
    by phone or by mail.
  • Annual Credit Report Request Service P.O. Box
    105281 Atlanta, GA 30348-5281

    1-877-322-8228 http//www.annualcreditreport.com
  • Equifax 1-800-525-6285 www.equifax.com
    Experian 1-888-EXPERIAN
    (397-3742) www.experian.com TransUnion
    1-800-680-7289 www.transunion.com
  • Dont be misled by other sites.

67
Reviewing Your Credit Report
Why is your credit score so important regarding
rate?
68
Reviewing Your Credit Report
What does a credit report look like anyway?
69
Reviewing Your Credit Report
  • Does checking your credit report lower your
    credit rating?
  • Checking your credit score or pulling your own
    credit report does not hurt your credit rating.
  • In addition, credit inquiries made by companies
    checking your credit report to send you
    pre-approved offers do not count either. 
  • However, if you respond to those offers, and the
    credit card company or mortgage lender pulls your
    credit report to do a more thorough
    investigation, it does count. 
  • Each credit inquiry can lower your score by five
    points.
  • However, the FICO scoring system counts multiple
    inquiries made in a 14-day period as just one
    inquiry for large purchases like home or
    car loans, allowing you to shop for the best
    interest rate.

70
Module Three Mastering Credit
Basics Reviewing Your Credit
Report Understanding Your Credit Score Improving
Your Credit Score Understanding Bankruptcy
71
Understanding Your Credit Score
How is your credit score determined?
72
Understanding Your Credit Score
  • How do these five factors impact my credit score?
  • Your credit score takes into consideration all
    these categories of information, not just one or
    two.
  • The importance of any factor depends on the
    overall information in your credit report.
  • The information in your credit report changes, so
    does the importance of any factor in determining
    your credit score.
  • It's impossible to say exactly how important any
    single factor is in determining your score, since
    they are different for everyone.
  • Different debt is weighted differently.
  • Example Revolving debt (i.e., credit cards) is
    weighted heavier than school, medical and
    mortgage debt.

73
Module Three Mastering Credit
Basics Managing Your Debt and
Liabilities Reviewing Your Credit
Report Improving Your Credit Score Understanding
Bankruptcy
74
Improving Your Credit Score
  • What are some payment tips to improve my credit
    score?
  • Pay your bills on time. Delinquent payments and
    collections can have a major negative impact on
    your FICO score.
  • If you have missed payments, get current and stay
    current.The longer you pay your bills on time,
    the better your credit score.
  • Be aware that paying off a collection account
    will not remove it from your credit report and it
    will stay on your report for seven years.
  • If you are having trouble making ends meet,
    contact your creditors or see a legitimate credit
    counselor.

75
Improving Your Credit Score
  • What are some payment tips in regard to the
    amount owed?
  • Keep balances low on credit cards. High
    outstanding debt can affect a credit score.
  • Pay off debt rather than moving it around.
  • Don't close unused credit cards as a short-term
    strategy to raise your score.
  • Don't open a number of new credit cards that you
    don't need, just to increase your available
    credit. This approach could backfire and
    actually lower your credit score.
  • Consider following the 30 rule (i.e. if your
    limit is 1,000,
    try to keep your balance below 300). See sample
    exercise on
    next slide.

76
Improving Your Credit Score
  • Exercise Debt/Limit
  • CARD A 500 balance/1,000 limit
  • CARD B 100 balance/1,000 limit
  • ______________________________
  • TOTAL 600 balance/2,000 total limit 30
    balance/limit
  • Note that if you pay off Card B and close the
    account, then you would now have a 50
    balance/total limit.

77
Improving Your Credit Score
  • What are some payment tips in regard to new
    credit?
  • Shop around for a loan within a specific period
    of time.
  • Re-establish your credit history if you have had
    problems.Opening new accounts responsibly and
    paying them off on time will raise your credit
    score in the long-term.
  • Apply for and open new credit accounts only as
    needed.
  • Use credit cards but manage them responsibly.
  • In general, having credit cards and loans (and
    paying timely payments) will raise your credit
    score.
  • Someone with no credit cards, for example, is at
    higher-risk
    than someone who has managed credit
    responsibly.

78
Improving Your Credit Score
  • If you discover an error on your report, do the
    following
  • Make a copy of your credit report and circle
    incorrect information.
  • Write a letter to the agencies detailing the
    inaccurate information.
  • Explain each dispute and request an investigation
    for resolution.
  • Send a similar letter to the creditor reporting
    the incorrect information.
  • Send all materials by certified mail with return
    receipt.
  • The reporting agency will initiate an
    investigation by contacting creditors to verify
    the accuracy of the information.
  • It is the creditors responsibility to prove the
    debt is yours. If they do not, it should be
    removed.
  • Note, if you dispute a debt that you owe, it may
    reappear later.

79
Module Three Mastering Credit
Basics Reviewing Your Credit
Report Understanding Your Credit Score Improving
Your Credit Score Understanding Bankruptcy
80
Understanding Bankruptcy
  • What is bankruptcy?
  • Bankruptcy is a last resort.
  • It cannot clean up a bad credit record and will
    be part of your credit record for up to 10 years.
  • Before considering bankruptcy, consult a
    nonprofit credit counselor.
  • There are different forms of bankruptcy.
  • Chapter 7 wipes out all debts and provides
    certain personal-property exemptions.
  • Chapter 13 is a court-approved repayment plan.
    The debtor keeps all property and makes regular
    payments on the debts after
    filing for bankruptcy.

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Understanding Bankruptcy
  • What are the long-term effects of bankruptcy?
  • It is a very long process to re-establish credit
    after filing for bankruptcy.
  • It could determine whether or not you get the job
    you want. Some businesses use credit reports to
    make employment decisions.
  • Your insurance rates may increase.
  • It may be difficult to rent an apartment or
    qualify for a home loan.
  • Bankruptcies stay on your credit report for 10
    years.
  • Phone companies and other utility and service
    providers may look at your credit history before
    providing service.

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Understanding Bankruptcy
  • Before filing bankruptcy, consider the following
    strategies
  • Consider a smaller home or vehicle. If you
    reduce spending, you may be able to find the
    money to repay your debt.
  • Talk with your creditors. Creditors are often
    willing to work out a payment plan to help you
    pay off what you owe.
  • Consider a debt consolidation loan. To pay your
    debt, you may be able to borrow against your
    workplace retirement plan or other securities.
  • Talk with a nonprofit counseling agency. These
    agencies can help you create a plan to handle all
    of your debts.
  • Talk to an attorney. Expert advice can help you
    understand the consequences of declaring
    bankruptcy.

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Module Three Review Exercise
  • Think about what we have discussed during the
    past hour.
  • What do you believe was the most important piece
    of information you learned today?
  • What is one action item you will commit to doing
    to improve your current situation?
  • Be prepared to share your ideas and thoughts with
    the class.
  • You have five minutes.

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Financial Empowerment Curriculum
Moving Ahead Through Financial Management
THANK YOU!
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Financial Empowerment Curriculum
Moving Ahead Through Financial Management
Module Four Building Financial
Foundations Homes, Loans and
Automobiles
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Module Four Objectives
  • Explain the various types of financial paperwork
    that exist.
  • Recall the various home options to consider when
    seeking financial living independence.
  • Describe the difference between various loan
    options.
  • Apply for a loan and recall how to prepare for
    the application process.
  • Describe the path to achieve home ownership.

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Module Four Opening Exercise
  • Before we begin to discuss how to apply for a
    loan, buy a car or purchase a home, I want you to
    take a moment to reflect on your personal
    experience.
  • On a scale of 1-10, how comfortable are you with
    the loan application process?
  • Why would you rate yourself the way you did?
    What life experiences have provided you the
    opportunity to apply for a loan?
  • Be prepared to share your ideas and thoughts with
    the class.
  • You have five minutes.

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Module Four Building Financial
Foundations Housing Options Loan
Options Loan Application Process
Home Ownership
90
Housing Options
  • Housing options for survivors
  • Transitional housing programs can be an option
    for someone who is leaving an emergency shelter
    or is not yet in a position to afford living
    completely independently.
  • Before you rent, determine how much you can
    afford. It is recommended that your rent be
    between 25-30 of your income.

91
Housing Options
  • More housing options for survivors
  • If you have a lease or rental agreement with the
    abuser, lease bifurcation may allow for removal
    of the survivors name or have the abusers name
    removed from the lease.  
  • The Section 8 program makes privately owned
    rental housing affordable to low-income
    households. It provides rent subsidies (either
    rental certificates or vouchers) for eligible
    tenants.

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Housing Options
  • Items you will need to collect with most housing
    applications
  • Birth Certificate or Social Security Number.
  • If you cannot access either, you can use your
    drivers license or state ID card to request a
    copy.
  • The most recent copy of your bank, investment or
    credit card statements.
  • If you cannot find paper copies of documents,
    request an electronic copy to be sent to a
    private e-mail account or pick it up in person.
  • Dont worry if you cant access your utility or
    other monthly expenses. Your most recent bank
    statement will provide information about monthly
    expenses (or if you pay via money orders, make
    copies of these
    statements).

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Housing Options
  • Consider the following before signing a lease
  • Do not put money down unless youre sure you want
    the unit.
  • Calculate the anticipated costs of utilities
    (i.e., heat, electricity) when determining
    whether you can afford an apartment.
  • Check the apartment to ensure that its in
    acceptable condition and put all agreements for
    repairs in writing.

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Housing Options
  • More items to consider the following before
    signing a lease
  • Evaluate how the superintendent or landlord
    responds to emergencies.
  • Talk with prospective neighbors about the
    landlord.
  • Visit the property at night and during the
    weekend to become more familiar with the
    community.

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Module Four Building Financial
Foundations Housing Options Loan
Options Loan Application Process
Home Ownership
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Loan Options
  • What is an unsecured loan?
  • An unsecured loan is a loan obtained without
    collateral (such as a house or car). This loan
    is also called a signature loan. There are three
    main types of unsecured loans
  • I Owe You (I.O.U.) Loan
  • Credit Card Loan
  • Personal Loan

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Loan Options
  • What is an secured loan?
  • Secured loans are those loans that are protected
    by an asset or collateral of some sort (such as a
    car or house). From a lenders point of view,
    these types of loans are less of a risk because
    the lender can recover their loss by
    re-possessing the asset used for the loan.
  • Debt Consolidation Loan
  • Car Loan
  • Mortgage Loan

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Loan Options
  • Before you buy a car, consider the following
  • The primary difference between loans for new and
    used cars is that new care loans tend to come at
    a lower interest rate.
  • You should be very careful when shopping for a
    car loan to ensure that they get the best loan
    for their needs.
  • Visit www.edmonds.com to determine how much of a
    car loan you can afford.
  • As a general rule, loans with short terms are
    better because borrowers pay less interest, and
    the lower the interest rate, the less costly the
    used car financing. However, the monthly payment
    will be higher.

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Loan Options
The following chart provides an overview on
mortgage loans.
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Loan Options
  • Before you apply for a mortgage, be familiar
    with
  • Prepayment penalties are monetary penalties that
    occur when a borrower paysoff a loan earlier than
    was originally agreed.
  • Negative Amortization (Neg Am) may be appealing
    to first-time buyers who cant afford huge
    upfront mortgage payments, however may result in
    unmanageable monthly payments in the end.
  • Predatory lending is the practice of using
    unfair, deceptive, and abusive tactics in lending
    money.
  • Payday loans or car title loans are short-term
    loans that are offered to individuals without
    regard to credit. Though these loans are
    relatively easy to obtain, they are granted at
    unreasonably high interest rates.

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Module Four Building Financial
Foundations Housing Options
Loan Options Loan Application
Process Home Ownership
102
Loan Application Process
  • The following are used to evaluate loan
    applications
  • Employment History Most lenders look for two
    consecutive years of employment within the same
    industry.
  • Credit History You must demonstrate that you
    can manage credit responsibly. Lenders look for
    a history of on-time payments.
  • Outstanding Liabilities Your total monthly
    payments for debts should not exceed 42 percent
    of your monthly earnings.
  • Cash and Asset Reserves Lenders may request
    information about your cash available (checking
    and savings).

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Loan Application Process
  • The following is good to know before applying for
    a mortgage
  • Loan prequalification is a process that
    pre-approves a homebuyer for a specific loan
    amount when purchase a home. It helps you look
    for homes you can afford and gives you a
    competitive advantage.
  • The mortgage application not only asks for
    information about you but also requires
    information about the property (since it will be
    used as collateral). The property information
    can be found in the appraisal.
  • Before submitting a mortgage application, check
    your credit.

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Module Four Building Financial
Foundations Housing Options
Loan Options Loan Application
Process Home Ownership
105
Home Ownership
  • Before buying a home, ask yourself these
    questions
  • Do you have a steady income and a stable job?
  • Do you plan to stay in the same city for at least
    three to five years?
  • Do you have a budget? Do you stick to it?
  • Do you have a good credit history?
  • Do you have savings for a down payment and
    closing costs?
  • Have you researched programs that offer down
    payments and closing costs for survivors of
    domestic violence?
  • Have you looked at low and moderate-income
    mortgage programs?
  • Have you taken homebuyer-education classes?

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Home Ownership
  • Below are some additional tips when looking to
    buy a home
  • Get help before you sign. If youre concerned
    about being a victim of predatory lending,
    contact the Better Business Bureau regarding the
    lender.
  • Read the fine print. Watch for balloon payments,
    high interest rates and fees, and credit life
    insurance.
  • Shop around. Comparison shop to get a loan with
    the best-terms.
  • Avoid high-pressure sales. Take your time when
    comparing lenders.
  • Review total costs. A low monthly payment isn't
    always a deal.
  • Watch what you sign. Never sign a blank document
    or any document the lender promises to fill in
    later.

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Module Four Review Exercise
  • Think about what we have discussed during the
    past hour.
  • What do you believe was the most important piece
    of information you learned today?
  • What is one action item you will commit to doing
    to improve your current situation?
  • Be prepared to share your ideas and thoughts with
    the class.
  • You have five minutes.

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Financial Empowerment Curriculum
Moving Ahead Through Financial Management
THANK YOU!
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Financial Empowerment Curriculum
Moving Ahead Through Financial Management
Module Five Creating Budgeting Strategies Saving
and Investing Insurance and Education
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Module Five Objectives
  • Recall strategies that will help you save money
    short- and long-term.
  • Describe the various options to invest your
    money.
  • Explain the various insurance options available.
  • Recall the importantance of a solid education and
    how to pursue a college degree.

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Module Five Opening Exercise
  • Before we begin to discuss how to budget and
    prepare for a brighter future, I want you to take
    a moment to reflect on your personal experience.
  • On a scale of 1-10, how comfortable are you with
    budgeting, saving and investing money, and
    continuing your education?
  • Why would you rate yourself the way you did?
    What life experiences have provided you the
    opportunity (or taken away the opportunity) to
    allow you to become financially independent?
  • Be prepared to share your ideas and thoughts with
    the class.
  • You have five minutes.

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Module Five Creating Budgeting
Strategies Savings Strategies Investment
Options Insurance Overview Education
Opportunities
114
Savings Strategies
  • Why is saving money so important?
  • An emergency savings fund should have enough
    money to pay three to six months of living
    expenses such as repairs on a car or leaky roof.
  • Its important to put money away consistently.
  • Its better to save 10 every month than to save
    25 only occasionally. Put money aside by making
    a deposit to your account as though you were
    paying a monthly bill.
  • The secret to saving money is the miracle of
    compound interest.
  • Example, if a 20-year-old makes a one-time 5,000
    contribution to her retirement account with eight
    percent return, it will grow to 160,000 by the
    time she retires at age 65.
  • But if she waits until shes 39, that 5,000
    would only grow to
    40,000.

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Savings Strategies
  • How do I make compounding work for me?
  • Start early. The younger you start, the more
    time compounding can work in your favor. If you
    didnt start early, dont despair, there is still
    time. Put away as much as you possibly can.
    Federal regulations allow older workers to put
    more money into retirement plans.
  • Make regular investments. Remain disciplined and
    make saving for retirement a priority. Do
    whatever it takes to maximize your contributions.
    If you work for a company that provides a match,
    make sure that you enroll to equal the highest
    match from the company.
  • Be patient. Do not touch the money. Compounding
    only works if you allow your investment to grow.
    The results will seem slow at first, but
    persevere. Most of the magic of compounding comes
    at the very end of the investment.

116
Savings Strategies
  • Below is a summary of the typical types of
    savings accounts.
  • Interest-Earning Savings Accounts Youll earn a
    small percentage of interest on your savings and
    receive a monthly statement in the mail. Funds
    can be withdrawn at any time.
  • Money Market Accounts These pay about one-half
    percent higher interest than savings accounts,
    but may require a higher minimum balance. You can
    usually make as many deposits as you like for
    free, but you can only write three checks each
    month.
  • Certificates of Deposit If you have money that
    can be tied up for three months to six years,
    certificates of deposit will offer the highest
    interest rates, depending on the term you choose.
    There are stiff penalties for early withdrawals,
    so choose a term you can live
    with.

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Module Five Creating Budgeting
Strategies Savings Strategies Investment
Options Insurance Overview Education
Opportunities
118
Investment Options
  • What are the different ways I can invest money?
  • Put money into stocks, bonds or mutual funds
    using a personal financial representative (PFR).
  • Buy real estate.
  • Start your own business.
  • Sometimes people refer to these options as
    "investment vehicles.
  • Each of these vehicles has positives and
    negatives.
  • The point is that it doesn't matter which method
    you choose for investing your money, the goal is
    always to put your money to work so it earns you
    an additional profit.

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Investment Options
  • The following are ways to save for your
    retirement.
  • Individual Retirement Accounts (IRAs) are
    retirement savings accounts that provide tax
    advantages when you save for retirement. There
    are different types of IRAs, some provided by
    employers and others are set up by individuals.
  • Pensions are retirement plans set up by employers
    to provide benefits to retired employees.
  • 401(k) Plans are retirement plans that defer
    income taxes on retirement savings and any
    interest they may earn until withdrawn. Most
    plans are sponsored by employers.

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Investment Options
  • To plan for your retirement needs, consider these
    questions
  • How long will your retirement last? When do you
    plan to stop working? Will you retire early or
    are you planning to work at least part-time as
    long as you can? How long are you likely to live?
  • How much will a dollar be worth? During times of
    inflation or rising prices, youll need more
    income to support your current lifestyle. When
    calculating how much money youll need for
    retirement, assume inflation rates of three to
    four percent.
  • How much will you spend? What type of retirement
    do you envision? Do you plan to stay in your
    current home? Do you plan to retire to a beach
    community in Florida? The first lifestyle will
    probably cost less than the second.

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Investment Options
  • What are other asset-building programs available?
  • Individual Development Accounts (IDAs)
  • Micro-Enterprise Development
  • Financial Literacy Programs
  • Financial Incentives
  • Federal and State Earned-Income-Tax Credits
    (EITCs)
  • Emergency Assistance Funds
  • Miscellaneous Savings Programs

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Module Five Creating Budgeting
Strategies Savings Strategies Investment
Options Insurance Overview Education
Opportunities
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Insurance Overview
  • What types of insurance is available?
  • Health and Medical Insurance
  • Health Savings Accounts (HSAs)
  • Auto Insurance
  • Homeowners or Renters Insurance
  • Life Insurance
  • Long-Term Care Insurance
  • Disability Insurance

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Module Five Creating Budgeting
Strategies Savings Strategies Investment
Options Insurance Overview Education
Opportunities
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Education Opportunities
  • What are some education and training options
    available?
  • General Educational Development (GED)
  • On-The-Job Training (OJT)
  • Community Colleges
  • Trade or Vocational Schools
  • Certification Programs
  • Online Education
  • Four-Year Colleges and Universities

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Education Opportunities
  • Are there any programs to help fund my education?
  • State-Sponsored College Savings (529) Plans
  • Education IRAs
  • Prepaid Tuition Plans
  • Financial Aid, Scholarships and Grants
  • Free Application for Federal Student Aid (FAFSA)
  • Federal Pell Grants
  • Federal Stafford Loans and Federal PLUS Loans
  • Tuition Reimbursement
  • The Allstate Foundation Moving Ahead Direct
    Assistance Fund

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Module Five Review Exercise
  • Think about what we have discussed during the
    past hour.
  • What do you believe was the most important piece
    of information you learned today?
  • What is one action item you will commit to doing
    to improve your current situation?
  • Be prepared to share your ideas and thoughts with
    the class.
  • You have five minutes.

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Financial Empowerment Curriculum
Moving Ahead Through Financial Management
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