Your Money, Your Goals

284 Pages·2014·1.79 MB·English

YOUR MONEY, YOUR GOALS
A financial empowerment
toolkit for Social Services
programs
Consumer Financial
April 2015
Protection Bureau

Table of contents

MODULE 1: Introduction to the toolkit .....................................................................1 

An introduction to the CFPB............................................................................. 2 

Financial empowerment and your life .............................................................. 4 

Financial empowerment: A way to improve client and program outcomes .... 4

Making referrals ................................................................................................ 6 

The goal of Your Money, Your Goals................................................................ 7 

MODULE 2: Assessing the situation ........................................................................9 

Tool 1: Financial empowerment self-assessment ...........................................11 

Tool 2: Client goal and financial situation assessment.................................. 21 

MODULE 3: Starting the conversation ...................................................................27 

When should I bring up money topics? ..........................................................28 

How should I bring up money topics? ............................................................ 29 

MODULE 4: Emotional and cultural influences on financial decisions ...............39 

Emotional influences on financial decisions .................................................. 39 

Cultural influences on financial decisions ......................................................40 

Cultural conflicts ............................................................................................. 41 

How can this understanding help my clients?................................................ 41 

MODULE 5: Using the toolkit ..................................................................................43 

How does it work? ........................................................................................... 43 

i YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR SOCIAL SERVICES PROGRAMS
Tool 1: Client financial empowerment checklist ............................................ 45 

MODULE 6: Setting goals ........................................................................................49 

Setting SMART goals.......................................................................................50 

Turning goals into savings targets .................................................................. 52 

What about revising goals? ............................................................................. 54 

Saving for education ........................................................................................ 55 

Tool 1: Goal setting tool.................................................................................. 57 

MODULE 7: Saving for the unexpected, emergencies, and goals .......................61 

What is savings? .............................................................................................. 61 

How to save .....................................................................................................62 

Savings and public benefits............................................................................. 63 

Savings plan ..................................................................................................... 63 

What are the benefits of a savings plan?......................................................... 65 

A safe place to save .......................................................................................... 67 

Direct deposit and savings ..............................................................................68 

Tool 1: Savings plan .........................................................................................71 

Tool 2: Benefits and asset limits .................................................................... 75 

Tool 3: Finding a safe place for savings ......................................................... 79 

Tool 4: Increasing your income through tax credits ......................................83 

MODULE 8: Managing income and benefits ..........................................................87 

Income ............................................................................................................. 87 

Benefits ............................................................................................................88 

Getting income ................................................................................................89 

Tool 1: Income and financial resource tracker ............................................... 93 

Tool 2: Strategies for increasing sources of cash and financial resources .... 97

ii YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR SOCIAL SERVICES PROGRAMS
Tool 3: Cash, paychecks, direct deposit, payroll cards, and EBT—
understanding the benefits and risks.............................................................101 

MODULE 9: Paying bills and other expenses ......................................................107 

Paying bills..................................................................................................... 108 

When cash is short: Prioritizing bills ............................................................. 111 

Tool 1: Spending tracker................................................................................ 115 

Tool 2: Bill calendar .......................................................................................121 

Tool 3: Strategies for cutting expenses ........................................................ 125 

Tool 4: When cash is short—prioritizing bills and spending ....................... 129 

MODULE 10: Managing cash flow.........................................................................133 

What is a cash flow budget? .......................................................................... 133 

Making a cash flow budget ............................................................................ 134 

Tool 1: Cash flow budget ............................................................................... 135 

Tool 2: Cash flow calendar ........................................................................... 145 

Tool 3: Improving cash flow checklist .......................................................... 149 

MODULE 11: Dealing with debt .............................................................................157 

What is debt? ..................................................................................................157 

Good debt, bad debt?......................................................................................157 

Tool 1: Debt management worksheet........................................................... 169 

Tool 2: Debt-to-income worksheet ...............................................................173 

Tool 3: Debt-reduction worksheet ................................................................177 

Tool 4: Student loan debt ..............................................................................181 

Tool 5: When debt collectors call ................................................................. 185 

MODULE 12: Understanding credit reports and scores .....................................193

What are credit reports? ................................................................................ 193 

iii YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR SOCIAL SERVICES PROGRAMS
Why do credit reports and scores matter? .................................................... 193 

What is in a credit report? ............................................................................. 194 

Negative information .................................................................................... 196 

Example credit report .....................................................................................197 

Disputing errors on credit reports ................................................................204 

What are credit scores? .................................................................................207 

Tool 1: Getting your credit reports and scores ..............................................211 

Tool 2: Credit report review checklist ...........................................................217 

Tool 3: Improving credit reports and scores................................................223 

MODULE 13: Evaluating financial service providers, products, and

services .............................................................................................................227 

Financial service providers ........................................................................... 227 

Choosing financial products..........................................................................228 

Managing a bank account..............................................................................229 

Tool 1: Selecting financial service products and providers.......................... 235

Tool 2: Evaluating financial service providers .............................................239 

Tool 3: Types of financial services................................................................243 

Tool 4: Opening account checklist ...............................................................249 

MODULE 14: Protecting consumer rights ............................................................255 

Consumer complaints.................................................................................... 256 

It’s your money—be aware and take care...................................................... 257 

Tool 1: Red flags............................................................................................ 261 

Tool 2: Protecting your identity ...................................................................263 

Tool 3: Submitting a complaint....................................................................269 

Tool 4: Learning more about consumer protection ..................................... 273 

iv YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR SOCIAL SERVICES PROGRAMS
MODULE 1:

Introduction to the toolkit

Welcome to the Consumer Financial Protection
Bureau’s Your Money, Your Goals: A financial Case manager
empowerment toolkit for social services
The term “case manager” is used
programs! If you’re reading this, you are
throughout this toolkit, and it refers
probably a case manager, or you work with case
to anyone who works directly with
managers.
people with low or moderate income
in a wide range of organizations and
Finances affect nearly every aspect of life in the
on a broad range of issues. Staff may
United States. But many people feel overwhelmed
have different titles, but they
by their financial situations, and they don’t know
generally come from non-profit or
where to go for help. As a case manager, you’re in
private sector organizations or city,
a unique position to provide that help. Clients
county, or tribal governmental
already know you and trust you, and in many
organizations, and they are generally
cases, they’re already sharing financial and other
responsible for the following with
personal information with you. The financial
clients:
stresses your clients face may interfere with their
progress toward other goals, and providing
 Conducting needs assessments
financial empowerment information and tools is
a natural extension of what you are already doing.  Developing action plans with
clients
What is “financial empowerment” and how is it
different from financial education or financial  Providing resources and referrals
literacy? needed to implement action plans
 Monitoring progress and
Financial education is a strategy that provides
evaluating results
people with financial knowledge, skills, and
resources so they can get, manage, and use their
money to achieve their goals. Financial education
1 YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR SOCIAL SERVICES PROGRAMS
is about building an individual’s knowledge,
skills, and capacity to use resources and tools, Financial empowerment
including financial products and services.
Empowerment is the process of
Financial education leads to financial literacy.
increasing the capacity of people to
make choices and transform those
Financial empowerment includes financial
choices into actions and desired
education and financial literacy, but it is focused
results, according to the World Bank.
both on building the ability of individuals to
Financial empowerment is building
manage money and use financial services and on
the knowledge and ability of
providing access to products that work for them.
individuals to manage money and use
Financially empowered individuals are informed
financial services products that work
and skilled; they know where to get help with
for them.
their financial challenges. This sense of
empowerment can build confidence that they can
effectively use their financial knowledge, skills,
and resources to reach their goals.
We designed this toolkit to help you help your clients become financially empowered
consumers. This financial empowerment toolkit is different from a financial education
curriculum. With a curriculum, you are generally expected to work through most or all of the
material in the order presented to achieve a specific set of objectives. This toolkit is a collection
of important financial empowerment information and tools you can access as needed based on
the client’s goals. In other words, the aim is not to cover all of the information and tools in the
toolkit - it is to identify and use the information and tools that are best suited to help your
clients reach their goals.
An introduction to the CFPB
CFPB is the abbreviation for the Consumer Financial Protection Bureau. The CFPB’s mission is
to make markets for consumer financial products and services work for Americans—whether
they are applying for a mortgage, choosing among credit cards, or using any number of other
consumer financial products.
Above all, this means ensuring that consumers get the information they need to make the
financial decisions they believe are best for themselves and their families—that prices are clear
up front, that risks are visible, and that nothing is buried in fine print.
2 YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR SOCIAL SERVICES PROGRAMS
We are working to give consumers the information they need to understand the terms of their
agreements with financial companies. We are working to make regulations and guidance as clear
and streamlined as possible so providers of consumer financial products and services can follow
the rules on their own.
Congress established the CFPB through the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 (Dodd-Frank Act). The Bureau:
 Writes the rules for providers of financial products.
 Oversees compliance with the rules.
 Brings enforcement actions to stop violations.
 Educates the public to help them navigate the market for financial services.
 Answers consumers’ questions, handles their complaints, and shares data with the public
about the consumer financial experience.
Our primary strategies are:
 Education—An informed consumer is the first line of defense against harmful

practices.

 Enforcement—We supervise banks, credit unions, and other financial companies, and
we enforce Federal consumer financial laws.
 Study—We gather and analyze available information to better understand consumers,
financial services providers, and consumer financial markets.
The Office of Financial Empowerment within the Division of Consumer Education and
Engagement developed this toolkit because case managers like you meet with thousands of
consumers that need high quality, unbiased financial information and tools to help them
address financial issues more effectively. This toolkit can help you help your clients reduce
financial stress as they become more financially empowered.
We hope you will use this information, the tools found within this toolkit, and the resources at
http://www.consumerfinance.gov with as many of your clients as possible. As you do, you’ll help
inform and empower the individuals in the community you serve to manage their finances in
ways that achieve their goals and dreams.
3 YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR SOCIAL SERVICES PROGRAMS
Financial empowerment and your life

As a case manager, you may sometimes hesitate
to share information about financial Case managers and financial
empowerment, because you feel like you don’t empowerment
know enough about it. Or you may feel like you
As a case manager, you are in a good
know the information but haven’t applied the
position to provide financial
information and tools to your own life. In other
empowerment services to your
words, you might sometimes feel like you don’t
clients. Case managers like you have
have the “right” to provide financial
access to and the trust of millions of
empowerment information, because you may feel
individuals who are most in need of
your own financial house may not fully be in
financial empowerment services. You
order.
may feel more equipped and
empowered to provide these services
You can help your clients face money issues that
when you read the content and use
may be complicating their lives if you feel
the tools provided in the toolkit.
knowledgeable about money and comfortable in

your own approach to money management,

credit, debt, and financial products. As you work

through each module of this toolkit, you will learn both the information and how the tools work.

As you try out the tools, you may also find ways to use your money to reach your own goals more

efficiently and effectively.

Financial empowerment: A way to improve
client and program outcomes
Sharing financial empowerment information and tools with clients may feel like a completely
different job—one more thing you’re being asked to add to your workload. But, once you become
familiar with the resources in this toolkit, we believe it can become natural to integrate its
contents into the work you do. That’s because its core functions relate to what you already do.
As a case manager, one of your job responsibilities is likely to be assessing client or client and
family needs. The toolkit starts you off with an assessment to help you understand your clients’
goals and the financial situations they may be facing.
4 YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR SOCIAL SERVICES PROGRAMS