YOUR MONEY, YOUR GOALS: A financial …

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

2 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

4 YOUR MONEY, YOUR GOALS TOOLKIT

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