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					    Financial Empowerment Curriculum
Moving Ahead Through Financial Management


                                Module One:
                     Understanding Financial
                                      Abuse
                           Keeping Safe and
                              Starting Over
Financial Empowerment Curriculum


          Module Five:           Module One:
            Creating            Understanding
           Budgeting              Financial
           Strategies              Abuse




   Module Four:                        Module Two:
     Building                            Learning
    Financial                            Financial
   Foundations                         Fundamentals


                     Module Three:
                       Mastering
                        Credit
                        Basics
             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.




                                  3
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?




                                     4
Module One:
Understanding Financial Abuse

Financially Abusive Relationships
Safety Planning
Separation, Divorce and Child Support
Disclosing Abuse
Privacy Challenges and Identity Change




                                         5

                        5
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




                                    6
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
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
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
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

                                     10
Module One:
Understanding Financial Abuse

Financially Abusive Relationships
Safety Planning
Separation, Divorce and Child Support
Disclosing Abuse
Privacy Challenges and Identity Change




                                         11
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
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


                                      13
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

                                      14
Safety Planning


Disclosing Abuse:

 Assist the survivor in understanding the pros and cons of disclosing
  abuse.
 Sometimes it’s 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
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 survivor’s 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
Safety Planning


Housing search:

 If a potential landlord checks the survivor’s 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

                                      17
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




                                      18
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
Module One:
Understanding Financial Abuse

Financially Abusive Relationships
Safety Planning
Separation, Divorce and Child Support
Disclosing Abuse
Privacy Challenges and Identity Change
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




                                     21
Separation, Divorce and
Child Support

Important documents to take:

 Past income tax returns
 One of your partner’s paycheck stubs
 Copies of your partner’s employee-benefit statement
 Your wish list of assets you would like to retain




                                      22
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
Module One:
Understanding Financial Abuse

Financially Abusive Relationships
Safety Planning
Separation, Divorce and Child Support
Disclosing Abuse
Privacy Challenges and Identity Change
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
                                     25
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
                                        26
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 employer’s confidentiality program and employee-
  assistance program
 Learn about legal rights to take time off, such as extended-leave or
  vacation-time policies




                                     27
Module One:
Understanding Financial Abuse

Financially Abusive Relationships
Safety Planning
Separation, Divorce and Child Support
Disclosing Abuse
Privacy Challenges and Identity Change




                                         28
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 survivor’s name
 Find housing that includes utilities in the monthly rent




                                      29
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




                                  30
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




                                      31
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

                                  32
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
    Financial Empowerment Curriculum
Moving Ahead Through Financial Management




                           THANK
                            YOU!
    Financial Empowerment Curriculum
Moving Ahead Through Financial Management


                               Module Two:
                          Learning Financial
                              Fundamentals
                         Income and Assets
                        Debts and Liabilities
Financial Empowerment Curriculum


          Module Five:           Module One:
            Creating            Understanding
           Budgeting              Financial
           Strategies              Abuse




   Module Four:                        Module Two:
     Building                            Learning
    Financial                            Financial
   Foundations                         Fundamentals


                     Module Three:
                       Mastering
                        Credit
                        Basics
              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.




                              37
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.




                                  38
Module Two:
Learning Financial
Fundamentals

Finance Management
Budgeting and Saving
Assets and Liabilities
Banking Options
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



                                     40
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, “What’s the worst thing that can happen to me in my
   situation?” Is the worst-case financial scenario something you can
   handle?
Take Action
Once you’ve gathered sufficient data and information, be decisive and take
   action.

                                    41
Module Two:
Learning Financial
Fundamentals

Finance Management
Budgeting and Saving
Assets and Liabilities
Banking Options
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
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?


                                   44
Budgeting and Saving


Below is the first half of a budgeting worksheet to review.




                               45
Budgeting and Saving


Below is the second half of a budgeting worksheet to review.




                             46
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




                                    47
Budgeting and Saving


What are ways to treat yourself without breaking the bank?




                              48
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.
 It’s important to put money away consistently.
 It’s 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 she’s 39, that $5,000 would only
  grow to $40,000.
                                     49
Budgeting and Saving


Below is a summary of the typical types of savings accounts:

 Interest-Earning Savings Accounts: You’ll 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.
                                      50
Module Two:
Learning Financial
Fundamentals

Finance Management
Budgeting and Saving
Assets and Liabilities
Banking Options
Assets and Liabilities


First research your partner’s 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?




                                    52
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?




                                   53
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.

                                       54
Assets and Liabilities


Below is a chart to help you manage and pay off debt”




                              55
Module Two:
Learning Financial
Fundamentals

Finance Management
Budgeting and Saving
Assets and Liabilities
Banking Options
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.
                                     57
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 bank’s hours of operation and locations convenient with your
  schedule?




                                    58
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.




                                   59
    Financial Empowerment Curriculum
Moving Ahead Through Financial Management




                           THANK
                            YOU!
    Financial Empowerment Curriculum
Moving Ahead Through Financial Management


                              Module Three:
                     Mastering Credit Basics
                                 Reviewing,
                         Understanding and
                       Improving Your Credit
Financial Empowerment Curriculum


          Module Five:           Module One:
            Creating            Understanding
           Budgeting              Financial
           Strategies              Abuse




   Module Four:                        Module Two:
     Building                            Learning
    Financial                            Financial
   Foundations                         Fundamentals


                     Module Three:
                       Mastering
                        Credit
                        Basics
              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.




                                 63
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
Module Three:
Mastering Credit
Basics

Reviewing Your Credit Report
Understanding Your Credit Score
Improving Your Credit Score
Understanding Bankruptcy
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
 Don’t be misled by other sites.

                                   66
Reviewing Your Credit Report


Why is your credit score so important regarding rate?




                               67
Reviewing Your Credit Report


What does a credit report look like anyway?




                              68
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.
                                   69
Module Three:
Mastering Credit
Basics

Reviewing Your Credit Report
Understanding Your Credit Score
Improving Your Credit Score
Understanding Bankruptcy
Understanding Your Credit Score


How is your credit score determined?




                              71
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.

                                     72
Module Three:
Mastering Credit
Basics

Managing Your Debt and Liabilities
Reviewing Your Credit Report
Improving Your Credit Score
Understanding Bankruptcy
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.




                                     74
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.
                                      75
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.



                                    76
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.
                                    77
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 creditor’s 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.
                                     78
Module Three:
Mastering Credit
Basics

Reviewing Your Credit Report
Understanding Your Credit Score
Improving Your Credit Score
Understanding Bankruptcy
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.
                                     80
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.



                                       81
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.

                                     82
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.




                                   83
    Financial Empowerment Curriculum
Moving Ahead Through Financial Management




                           THANK
                            YOU!
    Financial Empowerment Curriculum
Moving Ahead Through Financial Management


                              Module Four:
                          Building Financial
                               Foundations
                          Homes, Loans and
                              Automobiles
Financial Empowerment Curriculum


          Module Five:           Module One:
            Creating            Understanding
           Budgeting              Financial
           Strategies              Abuse




   Module Four:                        Module Two:
     Building                            Learning
    Financial                            Financial
   Foundations                         Fundamentals


                     Module Three:
                       Mastering
                        Credit
                        Basics
               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.




                                  87
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.


                                  88
Module Four:
Building Financial
Foundations

Housing Options
Loan Options
Loan Application Process
Home Ownership
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.




                                     90
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 survivor’s name or have the
  abuser’s 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.




                                   91
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 driver’s 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.
 Don’t worry if you can’t 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).

                                     92
Housing Options


Consider the following before signing a lease:

 Do not put money down unless you’re 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 it’s in acceptable condition and
  put all agreements for repairs in writing.




                                        93
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.




                                   94
Module Four:
Building Financial
Foundations

Housing Options
Loan Options
Loan Application Process
Home Ownership
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




                                    96
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 lender’s 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




                                     97
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.


                                     98
Loan Options


The following chart provides an overview on mortgage loans.




                              99
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 can’t 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.

                                   100
Module Four:
Building Financial
Foundations

Housing Options
Loan Options
Loan Application Process
Home Ownership
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).




                                  102
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.




                                    103
Module Four:
Building Financial
Foundations

Housing Options
Loan Options
Loan Application Process
Home Ownership
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?
                                     105
Home Ownership


Below are some additional tips when looking to buy a home:

 Get help before you sign. If you’re 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.


                                  106
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.




                                  107
    Financial Empowerment Curriculum
Moving Ahead Through Financial Management




                           THANK
                            YOU!
    Financial Empowerment Curriculum
Moving Ahead Through Financial Management



                               Module Five:
                         Creating Budgeting
                                  Strategies
                        Saving and Investing
                    Insurance and Education
Financial Empowerment Curriculum


          Module Five:           Module One:
            Creating            Understanding
           Budgeting              Financial
           Strategies              Abuse




   Module Four:                        Module Two:
     Building                            Learning
    Financial                            Financial
   Foundations                         Fundamentals


                     Module Three:
                       Mastering
                        Credit
                        Basics
              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.




                                   111
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.

                                    112
Module Five:
Creating Budgeting
Strategies

Savings Strategies
Investment Options
Insurance Overview
Education Opportunities
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.
 It’s important to put money away consistently.
 It’s 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 she’s 39, that $5,000 would only
  grow to $40,000.
                                    114
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 didn’t start early, don’t 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.

                                      115
Savings Strategies


Below is a summary of the typical types of savings accounts.

 Interest-Earning Savings Accounts: You’ll 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.

                                   116
Module Five:
Creating Budgeting
Strategies


Savings Strategies
Investment Options
Insurance Overview
Education Opportunities
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.

                                  118
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.



                                  119
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, you’ll need more income to support your current lifestyle. When
  calculating how much money you’ll 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.

                                     120
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



                                   121
Module Five:
Creating Budgeting
Strategies


Savings Strategies
Investment Options
Insurance Overview
Education Opportunities
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



                                 123
Module Five:
Creating Budgeting
Strategies


Savings Strategies
Investment Options
Insurance Overview
Education Opportunities
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



                                 125
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


                                   126
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.




                                  127
    Financial Empowerment Curriculum
Moving Ahead Through Financial Management




                           THANK
                            YOU!

				
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