Understanding personal finances is important to everyone, but especially those with limited resources. These families and individuals must exhibit financial discipline to ensure their bills are paid and their needs are satisfied. Too often, however, they have no experience with financial protocols or institutions, making it even more difficult for them to achieve long-term goals and enjoy life without worrying about money. Even though personal financial skills aren’t secrets, few are ever taught them, forcing many to manage their finances in improvised and often counterproductive ways.
Before offering financial literacy training to residents, however, you must first determine whether they want or even need it. You can do this in several ways, including having individual discussions, asking the property manager to identify residents who have a history of rent delinquency, or administering resident surveys. Once potential clients have been identified, it is important to address the subject sensitively, as discussing financial matters is quite personal.
The Financial Literacy section of this manual is designed to guide you in helping residents learn the basics of financial literacy: household spending, checking, savings and credit. Sample outlines and exercises for providing group training and individual consultations are included.
There are, of course, other important financial issues to consider, including tax filing, receiving employer benefits and applying for loans and mortgages. Since these issues are highly specific to an individual’s circumstances, they are not included in the training outlines contained in this section. For information on these topics, please visit the online MoneySite and CreditSmart resources described later in this section.
Much of the information included herein was adapted from the publication Making Your Money Count, which comes with a facilitator’s guide and can be found online at www.enterprisecommunity.org/resources, in the Enterprise Resource Database. Some model documents and handouts reproduced or adapted from the handbook are included in this manual as well.
In addition to the information in this manual, consult your local library and the Internet for additional resources related to financial literacy and planning. Moreover, local financial institutions may be willing to help educate residents by providing information or a speaker on personal financial issues.
Resources in this section include:
1. Facts on Financial Literacy: This document defines financial literacy and helps you make the case for offering financial literacy services or referrals within your resident services program.
2. Assessing Residents’ Financial Literacy: The two “tests” provided in this document can be used to gauge residents’ level of financial literacy and their financial behavior. These can be given before your training to benchmark their understanding and after your training to measure their learning.
3. Checking Account Basics: This document describes the benefits of opening a checking account and the basic elements of account management. The content of this resource is aligned with three handouts to help introduce banking processes to residents unfamiliar with such concepts: “Writing a Check,” “Sample Checkbook Register” and “Sample Account Statement and Balancing.”
4. Writing a Check Exercise: This resource is geared toward individuals who have not had significant experience with banking. It includes a sample check and instructions on how to fill it out.
5. Sample Checkbook Register Exercise: This resource shows residents how to enter information into a checkbook register and explains how to use the columns.
6. Sample Account Statement and Balancing Exercise: Similar to the previous resources, this document is meant to familiarize residents with banking. It includes a sample account statement and instructions on how to balance a checkbook.
7. Improving Household Spending: This document explains why it is important to develop a budget, and offers an easy, four-step process for creating a spending plan. The creation of a spending plan is aided by completing several exercises.
8. Separating Needs from Wants Exercise: This document help residents categorize items they may purchase, such as a new coat, into “wants” or “needs.” The list can then be used to prioritize spending.
9. Plugging the Spending Leaks Exercise: This worksheet helps residents understand the monthly and annual costs of items that often seem insignificant, such as a can of soda. It can be useful in finding ways to cut back on household spending.
10. Identifying Income Exercise: This exercise helps residents identify all their sources of income and can be used with other handouts to help residents draft budgets and find ways to save money.
11. Listing Expenses Exercise: This exercise comes with a comprehensive list of possible monthly expenses, which residents can use as a guide when creating their budgets.
12. Spending Calendar Exercise: This document is similar to “Listing Expenses,” but it allows residents to list their expenses on a weekly basis. Residents should use it, therefore, to track their weekly expenses and to review for long-term tracking as well.
13. Budgeting Tool: Residents can use this tool to put together monthly budgets with anticipated and actual spending for each item.
14. Saving for the Future: This resource explains the value of savings accounts, the ways in which residents can save money and the importance of having money set aside in the event of emergencies.
15. Effectively Using and Maintaining Credit: You can use this document to help explain credit to your residents. All facets of credit are covered, as well as helpful tips to achieving and maintaining good credit.
