YOUR MONEY, YOUR GOALS: A financial empowerment toolkit

June 2020

YOUR MONEY, YOUR GOAL S

A financial

empowerment toolkit

Consumer Financial

Protection Bureau

Table of contents

Introduction ......................................................................................................................................... 6

About the toolkit .......................................................................................................... 6

The power of financial empowerment....................................................................... 7

Incorporating the toolkit into your work ................................................................... 7

Financial decisions are about more than money ..................................................... 9

Tool: Financial empowerment self-assessment...................................................... 13

Tool: My money picture ............................................................................................. 21

Module 1: Setting Goals .................................................................................................................. 24

Hopes and dreams can be turned into goals ......................................................... 25

Creating effective goals ............................................................................................ 25

Setting goals for life events and large purchases .................................................. 26

Tool: Setting SMART goals........................................................................................ 29

Tool: Putting goals into action .................................................................................. 32

Tool: Planning for life events and large purchases ................................................34

Handout: Revising goals............................................................................................ 36

Module 2: Saving .............................................................................................................................. 38

Reasons to save........................................................................................................... 39

Taking the first step to saving ................................................................................... 41

Making savings automatic......................................................................................... 43

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You can save while receiving public benefits .........................................................43

Tool: Savings plan....................................................................................................... 45

Tool: Saving and asset limits ..................................................................................... 47

Tool: Finding a place for savings .............................................................................. 50

Handout: Saving at tax time. ..................................................................................... 53

Module 3: Tracking Income and Benefits .................................................................................... 55

Income ......................................................................................................................... 56

Public benefits ............................................................................................................ 58

Getting income and benefits.................................................................................... 58

Protecting the money on your prepaid card .......................................................... 59

Deductions from your pay......................................................................................... 61

Tool: Income and benefits tracker............................................................................ 67

Tool: Choosing how to get paid ............................................................................... 69

Tool: Increasing income and benefits...................................................................... 74

Module 4: Paying Bills...................................................................................................................... 77

Planning for bills ......................................................................................................... 78

Wants versus needs.................................................................................................... 78

Making paying bills easier ......................................................................................... 79

Protecting your information on digital money apps ............................................. 79

Tool: Spending tracker............................................................................................... 82

Tool: Bill calendar ....................................................................................................... 85

Tool: Choosing how to pay bills................................................................................ 87

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YOUR MONEY, YOUR GOALS TOOLKIT

Tool: Cutting expenses.............................................................................................. 91

Tool: Prioritizing bills .................................................................................................. 94

Module 5: Getting through the Month ......................................................................................... 97

Making a cash flow budget ....................................................................................... 98

Analyzing your cash flow ........................................................................................... 98

Tool: Creating a cash flow budget .........................................................................100

Tool: Improving cash flow........................................................................................103

Tool: Adjusting your cash flow................................................................................108

Module 6: Dealing with Debt ....................................................................................................... 110

Making sense of debt ...............................................................................................111

Co-signers: Agree to repay the loan...................................................................... 113

Types of debt ............................................................................................................ 113

Student loan debt..................................................................................................... 114

Medical debt ............................................................................................................. 116

Payday loans.............................................................................................................. 117

Auto title loans ......................................................................................................... 118

Rent-to-own arrangements ..................................................................................... 119

Avoiding problems with debt ................................................................................ 119

Tool: Debt log ........................................................................................................... 125

Tool: Debt-to-income calculator............................................................................. 128

Tool: Debt action plan ............................................................................................. 131

Tool: Comparing auto loans.................................................................................... 133

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Tool: Repaying student loans.................................................................................. 136

Tool: When debt collectors call .............................................................................. 143

Handout: Avoiding medical debt........................................................................... 150

Module 7: Understanding Credit Reports and Scores ............................................................. 152

Why do credit reports and scores matter? ........................................................... 153

Credit reports ........................................................................................................... 154

Credit scores ............................................................................................................. 165

Using credit ............................................................................................................... 168

Tool: Requesting your free credit reports............................................................. 171

Tool: Reviewing your credit reports....................................................................... 173

Tool: Disputing errors on your credit reports....................................................... 176

Tool: Getting and keeping a good credit history.................................................180

Module 8: Choosing Financial Products and Services ............................................................ 183

Finding and choosing financial products and services.......................................184

Opening a checking or savings account ...............................................................184

Using a prepaid card................................................................................................ 189

Alternatives to prepaid cards.................................................................................. 191

Tool: Finding financial products and services ...................................................... 193

Tool: Comparing financial service providers ........................................................205

Tool: Opening a checking or savings account ..................................................... 213

Tool: Avoiding checking account fees................................................................... 216

Tool: Evaluating your prepaid or payroll card ......................................................220

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YOUR MONEY, YOUR GOALS TOOLKIT

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