Basic Money Management

8/7/2019 Basic Money Management

1/156

Kansas State University Agricultural Experiment Station and Cooperative Extension Service


2/156


3/156


Table of Contents

Leaders Guide ...........................................................................................4

Budgeting Basics .....................................................................................25

Banking Basics ........................................................................................61

Credit: How to Get It, Use It, and Keep It ...............................................86

Record Keeping: The Facts o Your Lie ................................................125

Evaluations ............................................................................................135


4/156


5/156


Budgeting Basics Leaders Guide

Budgeting Basics

The objectives o the Budgeting Basics lie skills module are to help participants:

List nancial goals or the amily

Track spending to determine how money is spent

Set up a budget or spending plan

Determine i and when expenses can be reduced

Develop a reasonable savings plan to meet emergencies and goals

To help achieve these objectives, the ollowing act sheets, worksheets, and activity sheetsare included:

Budgeting Basics

Getting Started

You and Your Money Quiz

Wants, Needs, Goals

Net Worth

What Do I/We Owe?

Track Your Daily Spending

BudgetBudget Worksheet (Income)

Budget Worksheet (Expenses and Savings)

Calendar o Monthly Income and Expenses

Yearly Calendar o Expenses

Does Your Money Have Wings?

Saving or Tomorrow

Money Saving Suggestions

Increase Your Income; Dont Fall or a Scam

Getting Help

Insurance

Rent-to-Own

The Cost o Moving

The Cost o Moving Worksheet


6/156



Following is a suggestion or three Budgeting Basics educational sessions.

Session I:

Use the following fact sheets, worksheets, and activity sheets:

Budgeting Basics

You and Your Money Quiz

Wants, Needs, Goals

Tracking Your Spending

Does Your Money Have Wings?

Teaching points:Hand out An Assessment o How My Money Management Activities Aect My Familys Healthand Well-Beingand the You and Your Money Quizas they enter the room. Ask them tocomplete the evaluation rst; then the quiz.

Discuss the Budgeting Basics act sheet. Stress that how we manage our money is anindividual matter, but very important part o our lives.

Discuss the You and Your Money Quiz. Point out that amily members oten have verydierent approaches to money management. Suggest that participants discuss this quiz

with their amilies to see how they would answer.

Discuss Wants, Needs, Goals. Explain the dierence between a want and a need. Haveparticipants list several things they would like to buy. You might want to add to the list. Goover the list and ask i they think it is a want or a need. You also could have a list o severalitems such as a car, car with radio, car with CD. Read the list and have participants indicatei it is a want or need.

Discuss goals and the dierences between immediate, short-term, and long-term goals. Listsome goals in each category, with input rom the audience. Ask participants to list at leastthree goals in each category or the next session.

Hand out Tracking Your Spending. Show how to old a 8 1/2 by 11 sheet to get eight spaces(by olding three times) and write the days o the week on each space.

Ask participants to keep track o everything they spend or at least two weeks a month isbetter. Suggest other amily members also track their spending.

Discuss Does Your Money Have Wings?Go through some o the items listed. Ask participants


7/156


what items costs and how many times they usually purchase them. Add up yearly costs.

Ask what they could buy with the money they saved rom cutting back or cutting outsomething listed. Discuss remainder o sheet.

For the next session, ask participants to bring their weekly spending record (rom TrackingYour Spending), plus inormation about other regular monthly expenses.

Session II:

Use the following fact sheets and worksheets:

Net Worth

What Do I/We Owe?

Getting Started

Budget

Budget Worksheet (Income)

Budget Worksheet (Expenses and Savings)

Calendar o Monthly Income and Expenses

Yearly Calendar o Expenses

Teaching points:

Talk about the What Do I/We Owe?worksheet and what should be listed on it to helpparticipants see their total debt obligation. Ask them to complete the work sheet either inclass or at home.

Show the Net Worth orm. This summarizes what they own versus what they owe.

Look at Getting Started and discuss.

Discuss the Budget Worksheet (Income) and Budget Worksheet (Expenses and Savings). Explainthe various categories and how they can be changed to t the participants amily situation.

The Budgetworksheet is basically an overall view o the totals on the worksheets and helpsdetermine i participants need to reduce expenses or increase income.

Talk about how to use the Calendar o Monthly Income and Expenses to list when income isreceived and when bills need to be paid. Do a sample o a weekly paycheck and how to paymonthly bills, such as rent. List several bills that will occur each week. To the right o eachweek, list how much is let over ater paying bills. Suggest when a bill arrives, participantsput it on the calendar or the day it must be paid, not the day it is due (to avoid late ees).Circle the bill and amount when it is paid.



8/156


8


Point out that the Yearly Calendar o Expenses is designed to help participants be aware

when occasional expenses arise and how money needs to be saved each month to meetthem. Have each participant start lling in this calendar.

For next session, ask participants to complete the three budget worksheets and the YearlyCalendar o Expenses.

Session III:

Use the following fact sheets and worksheets:

Saving or Tomorrow

Money Saving SuggestionsIncrease Your Income; Dont Fall For a Scam

Getting Help

Insurance

Rent-to-Own

The Cost o Moving

The Cost o Moving Worksheet

Teaching points:

Review budgeting orms. Discuss what participants discovered about their budget. Ask themor suggestions on how they could change their spending.

Use the Saving or Tomorrow act sheet and discuss how saving even small amounts can addup over time.

Go over the Money Saving Suggestions worksheet. Pick a ew statements rom each categoryand discuss.

Ask or ideas on how participants can increase their income and what opportunities may bea scam. Bring newspaper ads that sound suspicious.

Use the Getting Help act sheet to explore the many agencies, organizations, and groups inyour the area that oer assistance. Check out local agencies, organizations, and groups;then add them to the list.

Talk about the importance o insurance and the dierent kinds o insurance. Be sureparticipants are aware o renters insurance and the dierent types o auto insurancecoverage. Talk about income-based, low-cost health insurance or kids.


9/156


Ask i anyone has used rent-to-own. Discuss advantages and disadvantages.

Ask i any participants have moved recently (or plan to do so in the near uture). DiscussThe Cost o Movingact sheet. Go over The Cost o Moving Worksheetand suggest they use itwhen they move. It is an easy way to keep track o what has to be done, as well as the costo moving.

Urge participants to contact you i they have any money management questions.

By: Mary Lou Odle, Saline County Extension Agent, Family and Consumer Sciences, K-State Research and Extension



10/156


10

Banking BasicsThe objectives o the Banking Basics lie skills module are to help participants:

Identiy and evaluate the various ways to make purchases and pay bills

Know how to select a checking account that best ts their needs

Learn how to manage a checking account

The ollowing act sheets and a worksheet are included:

Deciding How To Pay

When Are Deposits Available? Selecting A Checking Account

Managing A Checking Account

Electronic Transer Accounts (ETAs) A New Option

Following are some suggestion or two educational sessions on Banking Basics. You maywant to expand it to three (or more) sessions, depending on the number o activities youchoose to include.

Session I:

Use the following fact sheets:

Deciding How To Pay

Electronic Transer Accounts (ETAs) A New Option

Teaching points:Provide copies o the two act sheets, Deciding How To Payand Electronic Transer Accounts(ETAs) A New Option. Explore with participants the various ways to make purchases andpay bills. Focus the discussion around the questions below. You might want to summarizethese points on newsprint, a chalkboard, dry erase board, or an overhead transparency.

What are the advantages and disadvantages o using each method o payment? Howdo they compare against each other?

How do they work? Are they convenient? How easy or dicult are they to manage?

What are the costs? Are these costs dierent locally? I I dont manage the paymentmethod wisely, what are the possible consequences?

What records will there be o transactions? How easy or hard will it be to keep track othese transactions?

Banking Basics Leaders Guide


11/156


11

Are there saety issues to consider?

What other actors infuence whether I use a particular method o payment or not?

As an alternative, you could develop a ew case studies and ask participants what paymentmethod would be appropriate in this particular situation and why. Again, try to addresssome o the questions mentioned earlier.

Pay attention to how the group responds. What do the responses tell you about their pastexperience with, or willingness to consider, this type o payment method? Acknowledgetheir eelings and experiences.

Gather (or have participants who have signed up to attend the educational session gather)

local data on costs o the various payment methods in your community, such as the costo money orders and cashiers checks, check cashing ees, ATM and debit card ees, servicecharges, stop payment requests, insucient unds ees, and others. In some cases,this may mean gathering copies o brochures and disclosure inormation rom nancialinstitutions and businesses.

I some participants have never used Electronic Fund Transer, such as using an ATM card,a debit card, or electronic bill payment service, you might want to arrange a eld trip to alocal business or nancial institution that has the systems in place. See i the manager orother employee could explain how the system works.

While not discussed in the Deciding How To Payact sheet, questions may arise about theKansas Vision card. This is another type o Electronic Fund Transer card. The KansasVision card is more correctly reerred to as an Electronic Benet Transer (EBT) card.Families who receive ood stamp benets, Temporary Assistance or Families, or TAF,general assistance, or reugee assistance in Kansas access these benets through the Visioncard. I you need inormation, you can get the booklet How to Use Your Kansas Vision Cardrom the nearest Social and Rehabilitation Services Oce.

Session II:

Use the following fact sheets and worksheet:

When Are Deposits Available?

Selecting A Checking Account

Managing A Checking Account

Teaching points:People choose not to have checking accounts or many reasons some are nancial; someare some emotional. I your audience tends not to have checking accounts, you may wantto address analyzing whether or not a checking account is appropriate or all amilies.



12/156


12

Brainstorm about the reasons someone might want to have a checking account versus nothave a checking account. Some possible reasons why a person would notwant to have achecking account could be:

Past problems with a checking account (such as bounced checks)

Not able to keep a minimum balance to avoid or minimize ees

Poor math skills

Not able to balance a checkbook

Only have a ew bills to pay each month

Dont trust nancial institutions

Continue this discussion with how to select a checking account, since there are manydierent types o accounts and services available. I not discussed in the previous session,this may lead to a discussion o the new Electronic Transer Accounts (ETAs) as analternative to a regular checking account.

At the end o the earlier session, consider asking participants to visit with local nancialinstitutions and gather copies o brochures or disclosure inormation that explain theirchecking accounts, other services, ees, and related inormation and bring it to the secondsession. This inormation can be used to begin lling out the Selecting A Checking Accountworksheet during the second session. As an alternative, i you plan to expand the Banking

Basics educational sessions to three, ask each participant to visit one nancial institutionbeore the next session and gather the inormation needed to ll out the Selecting AChecking Accountworksheet.

Hand out the two act sheets When Are Deposits Available?and Managing A CheckingAccount. Discuss why it is important to manage a checking account wisely. Ask theollowing questions:

What inormation appears on a check? What is the correct way to write a check? Howdo you make a deposit? How do you endorse a check?

How do you use a check register (or stub) to keep track o the money in an account?

What is the purpose o an account statement and how do you reconcile a checkbookregister with this statement?

Have participants practice writing a check, lling out a deposit slip and checkbookregister. (Duplicate extra copies o the ollowing sample blank check, deposit slip, andcheckbook register). Make a list o bills (and people) to be paid by check. Have participantswrite the checks and enter the inormation into the checkbook register. Provide exampleso check deposits, direct deposits, and ATM or debit card withdrawals to enter into thecheckbook register. Provide scenarios that involve endorsing checks in various ways.



13/156


13

NUMBER DATE CODE DESCRIPTIONOFTRANSACTION PAYMENT/DEBIT(-) FEE(-) TAX DEPOSIT/CREDIT(+) $ BALANCE

Sample Checkbook Register



14/156


1

The objectives o the Credit: How to Get It, Use It, and Keep Itlie skills module are to help

participants:

Understand the advantages and disadvantages o using credit

Identiy types and sources o credit

Know how to get credit and use it wisely

Understanding consumer credit protection laws

Know how to check their credit report

Keep credit use under control

Identiy their total debts

Determine i they have too much debt

To help achieve these objectives, the ollowing act sheets, worksheet, and activity areincluded:

Give Yoursel a Checkup

Tool or Trap?

Choosing and Using a Credit Card

Your Credit Rights Check Your Credit Report

Analyze Your Debts

Keeping It Under Control

Following are some suggestions or three educational sessions on Credit: How to Get It, UseIt, and Keep It.

Session I:

Use the following fact sheet and activity:

Give Yoursel a Checkup

Tool or Trap?

Credit: How to Get It,Use It and Keep It Leaders Guide


15/156


1

Teaching points:

Hand out the activity Give Yoursel a Checkup. Have participants check which o thewarning signals they have experienced in the past year. Do not ask them to share responseswith the group, however. While there are no hard and ast rules, and some o the warningsignals are more serious than others, even experiencing two or three o these warningsignals may indicate the participant needs to make some signicant changes in the waymoney is managed.

Discuss the various types and sources o credit. Then ask participants what they think arethe advantages and disadvantages o using credit. Record their responses on newsprint, achalkboard, dry erase board, or on an overhead transparency. You may want to supplementtheir responses with those listed in the handout Tool or Trap?

Make a list o 10-1 types o purchases or expenses that participants might (or might not)use credit or. Include some situational examples, also. Here is a possible list:

Appliances and major urnishings or the home

Past-due bills

Food or gasoline or the car (everyday expenses)

A home

A car

A college education

Several small purchases in the same store

Purchases less than $

Items on sale

A vacation

Purchases where couldnt save enough to pay cash

Purchases where could have paid in cash, but chose not to

Ask participants whether they would use credit or this type o purchase (yes, no,or maybe) and why or why not. Discuss the examples in terms o advantages anddisadvantages, costs, risks, obligations, and consequences.

There are no right or wrong answers. People choose to use (or not use) credit or manyreasons some are nancial; some are emotional. However, using credit or some othese examples may be a warning signal under certain circumstances. For example,charging day-to-day expenses (especially perishable items) instead o paying cash, canbe a warning signal i it is done regularly because there is not enough income ortoo many expenses.

Credit: How To Get It,Use It, and Keep It Leaders Guide


16/156


1

However, some people do this simply or convenience, paying o the balance owed

each month.Spend some time discussing how to apply or credit. List some guidelines (comparecredit costs, read the ne print, dont sign a contract with blank spaces, etc.) on newsprint,a chalkboard, dry erase board, or on an overhead transparency.

Discuss what creditors look or when granting credit. Stress that creditors set their ownstandards or granting credit and may reach dierent conclusions when evaluating thesame credit applicant. Explore some o the ways to establish a good credit history.

Go over the questions to ask yoursel beore deciding to use credit. Stress the needto consider advantages and disadvantages, costs, risks, obligations, and potential

consequences.

Session II:


Choosing and Using a Credit Card

Your Credit Rights

Check Your Credit Report

Teaching points:

Use the Choosing and Using a Credit Card act sheet to discuss the major costs and eaturesto consider when selecting a credit card:

Annual ee

Annual Percentage Rate (purchases; cash advances; balance transers; xed, variable, ortiered; introductory; penalty)

Grace period

Method o calculating balances

Credit limit

Other ees (late-payment; over-the-limit; cash advance; minimum nance charge)

There are several ways to involve participants. Consider the ollowing alternatives:

Write the major costs and eatures on separate pieces o paper. Then write thedenitions or these major costs and eatures on other pieces o paper. Tape the costsand eatures on one wall; the denitions on another.



17/156


1

Divide participants into small groups o - people. One at a time, have each groupselect a eature or cost, match it with the correct denition, and tape the twotogether. Then discuss the matches.

Have the groups each look at dierent credit card oers (such as pre-approvedoers received in the mail just be sure to mark out the name and address o theperson it was sent to) or at dierent disclosure statements or credit cards (generallysent to credit card holders each year). Have each group look or the actual costsand eatures or that credit card and report the inormation back to the group. Asa group, discuss the similarities and dierences among the credit card costs andeatures.

Develop a ew case studies and ask participants what type o credit card might beappropriate or this person and why. Heres an example:

Which credit card is best or Jim?Jim is 1 and got his rst ull-time job two months ago. The job involves quite a bit otraveling throughout the state. Jim is required to pay or his travel expenses, or which hewill be repaid by his employer.

Jim wants to get a credit card that he can use to charge these business travel costs. Hehopes that when the bills come due, he will already have been repaid by his employer but other employees say that doesnt always happen.

This is Jims rst credit card and he has been having trouble staying within his budgetsince he graduated rom high school.

For this situation, the more important issues or Jim probably are:

Longer grace period (to allow time or his employer to repay expenses beorethe payment is due)

Lower interest rate (in case he has to carry over a balance to the next month)

Balance calculation method that excludes new purchases (since he may havelots o charges each month)

Lower late payment ees (i he has trouble managing his money)

Higher credit limit (in case his travel expenses are high that month)

Have participants list their credit cards and account numbers, when the cards expire,and the addresses and telephone numbers o the companies that issued the creditcards. Be sure to indicate the telephone number to call in the event the credit cardis lost or stolen (generally a toll-ree one). Participants also may want to note the



18/156


18

general customer service telephone number. Remind them to keep this inormation in

a sae place at home.Summarize the major consumer credit rights rom the act sheet Your Credit Rights.

Discuss what a credit report is, the type o inormation Consumer Reporting Agencieskeep and how long they keep it, and how to get a copy o a credit report. Also reviewhow people have the right to correct inaccurate inormation in their credit report.

You might want to use a type o matching activity. Write down on separate pieces

o paper the periods o time that Consumer Reporting Agencies can keep certain

inormation ( years; 10 years; no time limit) and place them on the wall. Give

examples o dierent types o inormation that Consumer Reporting Agencies keep

(accounts with creditors, tax liens, bankruptcies, deault on guaranteed student

loans, etc.) and ask participants how long they keep this type o inormation. Have

participants (individually or in small groups) match the type o inormation with

the correct number o years.

Session III:

Use the following fact sheet and worksheet:

Keeping It Under Control

Analyze Your Debts

Teaching points:Have participants ll out part o the worksheet Analyze Your Debts. Provide additionalcopies i more than 10 debt entries are needed.

Enter the interest rate on an annual basis (Annual Percentage Rate). I this is a past-due bill that has no interest rate or late payments, enter the late ee that will becharged.

Check () those debts that are secured by property or that have a co-signer.

Check () those debts where some type o legal action already has been taken(turned over to collection agency, wage garnishment, or other).

Provide appropriate details o the payment plan (such as number o installmentpayments let to pay; lump sum payment; or revolving credit). Also indicate thepayment amount. For revolving credit, list an average or typical payment amount. Forlump sum debts, enter a monthly equivalent (total amount owed divided by numbero months let beore the lump sum payment is due).



19/156


1

Note when payments are due and the date the last payment was made.

Leave the last column (priority or repayment) to ll out later.

Have participants then multiply their take-home income times .2 and compare it with thetotal monthly debt payments. Have participants committed more than 1-20% o theirtake-home income to debt payments (not including mortgage)?

I debt payments exceed 1-20 percent o take-home income, have participants considersetting up a debt repayment plan.

Explain the sel-help steps in setting up a debt repayment plan, including how toanalyze and prioritize debts. I you have a copy o the computer program PowerPay,

you may want to use it to assist with this eort (or make appointments to work withparticipants on a one-to-one basis).

Then have them ll out the last column in the Analyze Your Debts worksheet byranking the importance o paying o each debt (either rank by number, such as rst,second, third etc.; or as highest, high, moderate, etc.).

Also discuss options where proessional help is needed, such as credit counseling (andlocal sources, i any), debt consolidation, and bankruptcy options.

In small groups, you might want to have participants write sample letters to creditorsnotiying them o the situation (such as not being able to make regular payments) and

proposing a particular debt repayment plan (with blank spaces to ll in the appropriateinormation). Share sample letters with the rest o the group.


By: Joyce E. Jones, Extension Specialist, Family Financial Management, K-State Research and Extension


20/156


20

Record Keeping: The Facts of Your LifeThe objectives o the Record Keeping: The Facts o Your Lie module are to help participants:

Understand when important records may be needed

Know how long important records should be kept

Know where important records should be kept

Learn one possible way to organize a home le

Several act sheets and an activity sheet are included to help achieve these objectives:

When Do You Need Important Records? How Long Should You Keep Important Records?

Do You Know Where These Important Records Are?

Where Should You Keep Important Records?

Sample Filing System

Following are some suggestions or a series o two Record Keeping: The Facts o Your Lieeducational sessions:

Session I:Use the following fact sheets:

When Do You Need Important Records?

How Long Should You Keep Important Records?

Teaching points:Ask participants i they have needed some type o important record recently. Why didthey need it? Were they able to nd it? How long did it take or them to nd it? Then haveparticipants share other times in their lives when they needed important records. Why didthey need the inormation? Discuss other situations where records might be needed (rom

the act sheet When Do You Need Important Records?).

As a second part o the above discussion, have participants identiy what records they needin the various situations mentioned.

As an alternative, you could divide participants into groups o to and ask each group tomake a list o 20 records that they or their amilies might need to keep. Remind them thatrecords may be amily, work, or nancial. They also may be or everyday situations, as wellas emergencies. Have each group share one item on their list. Continue getting additional

Record Keeping:The Facts of Your Life Leaders Guide


21/156


21

items rom each group until you notice that they are having diculty identiyingadditional records. Write down their ideas on newsprint or a chalkboard, dry erase board,or overhead transparency. You may want to list them by type o record, such as by amily,work, or nancial. You also may want to add other records that need to be kept. Use thevarious lists in the act sheet Where Should You Keep Important Records as a guide. Donthand out the act sheet to participants until at the next session, however.

Once participants have an idea o the types o records to keep, address the issue o howlong they need to be kept. You might want to start by asking participants i it is importantto keep all o these records orever? This can lead into a discussion o the general rule orkeeping records:

Ask participants to think about the previous activity where they identied situationsthat needed certain records and identiy those records that need to be kept indenitely(and why), those that need to be kept or several years (and why), and those that can bediscarded earlier (and why). Use the act sheet How Long Should You Keep Important Records?as a guide or supplementing and adjusting the lists developed by the participants.

Session II:


Do You Know Where These Important Records Are?

Where Should You Keep Important Records?

Sample Filing System

Teaching points:Hand out the activity sheet Do You Know Where These Important Records Are?Giveparticipants time to respond to the question.

Stress that, in Session I, the discussion centered around when records were needed, what

records were needed in those situations, and how long records should be kept. In SessionII, the discussion will ocus on where these records should be kept.

There are several ways that you can get participants involved in this session.

Mention various records individually and ask the group where they think thatrecord should be kept. Using three columns (sae deposit box, home le, and carrywith you), write down their answers on newsprint or a chalkboard, dry erase board, oroverhead transparency.

Keep important records until they are no longer useul.



22/156


22

As an alternative, divide participants into groups o to . Place three signs around

the room (sae deposit box, home le, and carry with you). Select 20 or so dierentrecords and write them down on pieces o paper (one record per piece o paper). Thisrepresents a set. Make one set or each group. Ask each group to discuss and sortthe records into three stacks, depending upon where they think they should be stored(sae deposit box, home le, and wallet or purse). Have each group tape the pieces opaper around the room under the appropriate storage location sign.

In both activities, use the act sheet Where Should You Keep Important Records?asa guide. Go over the lists or groupings. When there is a disagreement about wherecertain records should be stored, or where records are incorrectly placed or listed,discuss the correct placement and why another location is more appropriate.

For additional inormation, you can use the publications in the three-part GettingYour Household in Orderseries as a reerence (Organizing Household Records, L-801; OurValuable Records, MF-8; and Taking Inventory: Protecting Your Household Possessions,L-).

Share the act sheet Sample Filing System. In small groups, you might way to haveparticipants put together some mini-les using olded index cards. Have participantslabel them according to the categories in the Sample Filing System (or an adaptationthe group develops). Put them in a small box.

Did you use the activity above where participants sort records and place themaround the room according to the appropriate storage location? I so, you could

have participants retrieve the records located at the home le storage location, oldthem into smaller pieces, and le them under the appropriate categories in the mini-les.


By: Joyce E. Jones, Extension Specialist, Family Financial Management, K-State Research and Extension


23/156


23

Reerences

Laurie Boyce and Linda Boelter, Consumer Credit: Shopping or Consumer Credit, Universityo Wisconsin-Extension, NCR Publication No. 0-1, January 18.

Karen Chan, Vicky Fitzsimmons, Rhonda Hardy, Maxine Kimmel, Sandra Stiles, and SusanTaylor, All My Money, Cooperative Extension Service, College o Agricultural, Consumerand Environmental Sciences, University o Illinois at Urbana-Champaign, 1.

Expedited Funds Availability Act, U.S. Code: Title 12, Section 001-00, January 2000.

Federal Deposit Insurance Corporation, Paper or Plastic?, FDIC Consumer News, Spring2000. (http://www.dic.gov/consumers/consumer/news/cnspr00/cvrstry.html)

Federal Reserve Bank o Atlanta, Checkbooklet, n.d.(http://www.rbatlanta.org/publica/brochure/check/check.htm)

Federal Reserve Board, Shop: The Credit Card You Pick Can Save You Money, July 2001.(http://www.ederalreserve.gov/pubs/shop/)

Federal Trade Commission, Avoiding Credit and Charge Card Fraud, August 1.(http://www.tc.gov/bcp/menu-credit.htm)

Federal Trade Commission, Building a Better Credit Record, October 2000.(http://www.tc.gov/bcp/menu-credit.htm)

Federal Trade Commission, Choosing and Using Credit Cards, January 1.(http://www.tc.gov/bcp/menu-credit.htm)

Federal Trade Commission, Credit and Your Consumer Rights, December 1.(http://www.tc.gov/bcp/menu-credit.htm)

Federal Trade Commission, Electronic Banking, March 1.

Federal Trade Commission, Equal Credit Opportunity, March 18.(http://www.tc.gov/bcp/menu-credit.htm)

Federal Trade Commission, Fair Credit Billing, August 1.(http://www.tc.gov/bcp/menu-credit.htm)

Federal Trade Commission, Fair Debt Collection, March 1.(http://www.tc.gov/bcp/menu-credit.htm)

References


24/156


2

Reerences, cont ...

Financial Management Service, ETA Commonly Asked Questions and Answers, U.S.Department o the Treasury, November 2000.(http://www.ms.treas.gov/eta/eta-q&a.html)

Financial Services Education Coalition, Helping People in Your Community Understand BasicFinancial Services: A Comprehensive Guide or Community Educators, 2000.(http://www.ms.treas.gov/et/educ/helping.html)

Jeanne M. Hogarth, BUC$Building an Understanding o Credit Services, CooperativeExtension Service, Cornell University, 1.

Joyce E. Jones, Organizing Household Records, K-State Research and Extension, Kansas StateUniversity, L-801, September 2001.

Suzann Knight, Taking Charge o Your Finances, Cooperative Extension Service, University oNew Hampshire, 1.

A. M. Morrow, Paying Family Bills, Oregon State University Cooperative Extension Service,EC 122, July 1.

Kathy Prochaska-Cue and Judy Weber, Dollars & Sense Newsletter, University o Nebraska-

Lincoln, Cooperative Extension, 2000.

Mary Stephenson, Getting Out o Debt, Cooperative Extension Service, University oMaryland at College Park, Fact Sheet 3, 1.

When Will You Need Your Important Papers?, Cooperative Extension Service, University oIllinois at Urbana-Champaign, CHEP 0, n.d.

2 References


S-134g rev. April 2006

It is the policy o Kansas State University Agricultural Experiment Station and Cooperative Extension Service that all persons shall have equal opportu-

nity and access to its educational programs, services, activities, and materials without regard to race, color, religion, national origin, sex, age or disability.

Kansas State University is an equal opportunity organization. Issued in urtherance o Cooperative Extension Work, Acts o May 8 and June 30, 1914, as

amended. Kansas State University, County Extension Councils, Extension Districts, and United States Department o Agriculture Cooperating, Marc A.

Johnson, Director.

Brand names appearing in this publication are or product identication purposes only. No endorsement is intended,

nor is criticism implied o similar products not mentioned.

Publications rom Kansas State University are available on the World Wide Web at: http://www.oznet.ksu.edu

Contents o this publication may be reely reproduced or educational purposes. All other rights reserved. In each case,

credit Joyce E. Jones and Mary Lou Odle, Basic Money Management, Kansas State University, April 2006


25/156


2

Fact Sheet

Budgeting BasicsMoney is a part o our lie every day. What we wear, what we eat, where we live, and theun things we do are only a ew money related decisions we make.

For some people, having a million dollars wouldnt be enough to satisy their wants.Millions o other people manage to pay their bills, save or the uture, and enjoy lie whilestill living within their income. Managing money takes time and eort.

The way you spend or save money today will help determine what you have and whetheryou can pay your bills in six months, a year, or many years rom now. For example, i you

spend your money as ast as it comes in, you may nd yoursel in debt when unplannedexpenses occur.

Do you have control over how you spend money? Can you live within your income meeting expenses and putting some money into savings?

Budgeting is a way to get the most out o your dollars. It is not just about saving money orbeing a tightwad or doing without. Budgeting is about deciding where your money will goand making a spending and savings plan.

Money Management SkillsNo one is born with natural money management skills. You may have learned some

money management skills rom your amily, but you may want to manage your moneydierently than your parents managed their money. You also may have learned somemoney management skills at school or through lie experiences. Developing good moneymanagement skills takes time, practice, and patience.

BudgetingI you run out o money beore all the expenses are paid, you are not alone. While peoplework hard to earn an income, they oten do not work at planning how income will bespent. There are steps you can take to make a budget work or you. The basic steps insuccessul budgeting include:

1. Track how your money is spent or one month.

2. List all income or the month.

3. Compare expenses to income.

. Determine what changes need to be made.

. Make a spending and savings plan.

. Try to ollow the spending and savings plan, adjusting as necessary.

. As money is spent, record all expenses on expense worksheet.By: Mary Lou Odle, Saline County Extension Agent, Family and Consumer Sciences K-State Research and Extension


26/156


27/156


2

8. At the end o the month, subtract expenses rom income and determine i

you have stayed within your budget.

9. Review expenses and income to determine what needs to be changed. Do youneed to cut some expenses or increase income?

Dont be discouraged. The rst ew months you try to ollow your budget will be a learningexperience. You may need to make changes in your budget. Remember, a budget is aguideline or spending and saving money. It helps you identiy where your money goes andhelps you plan how to use your money to get the things you need and want.

By: Mary Lou Odle, Saline County Extension Agent, Family and Consumer Sciences K-State Research and Extension

Budgeting Basics Fact SheetGetting Started


28/156


28

Budgeting Basics ActivityYou and Your Money Quiz

Each person handles money dierently. Have each member o the amily complete this

quiz and then compare and discuss your answers.

1. How would you rank your amilys spending habits?

You Your Partner Kids

Too thrity ___________ ___________ ___________

Reasonable ___________ ___________ ___________

Easy going ___________ ___________ ___________

Spend every cent ___________ ___________ ___________

2. What do you enjoy spending money on? _____________________________________________

3. What does your amily enjoy spending money on? ___________________________________

. What causes the most discussion about money in your household? ____________________

____________________________________________________________________________________

. What would you like to change about how amily money is spent? ____________________

____________________________________________________________________________________

. Within a ew dollars, how much does your amily spend each month on:

_________Eating out

_________Utilities heat, water, cable TV, phone, etc.

_________Entertainment

_________Purchases at discount stores_________Snacks, cigarettes, alcohol

_________Gas or car

. Do you eel any o your monthly expenses are too high? ______________________________

Which ones? _______________________________________________________________________

8. I your amily had to cut spending, what would you cut? _____________________________

What would your partner cut? ______________________________________________________

. How would you pay an unexpected expense o $10? _________________________________

____________________________________________________________________________________

10. I someone gave you $1,000, what would you do with it? _________________________________________________________________________________________________________________

11. What would you like to change about your nancial situation? _______________________

____________________________________________________________________________________

12. How much does your amily put into savings each month? ___________________________

How much does your amily have saved or emergencies? _____________________________



29/156


2

We all have basic needs in our lie shelter, clothing, and ood. Each person in the amilyhas additional needs that costs money. There is a dierence between needs and wants. Awant is something you would like to have but could live without. It is important to discusswith your amily what are their wants and needs and how do they t into the amilysnancial plans.

A car may be a need or the amily, but a new car probably is a want. Would you considera radio in the car a need; what about a CD player? A phone in the house may be a need or

your amily, but a cell phone could be a need or a want.

Have each amily member write down ve needs. Then ask each person to write down vewants. Read the lists aloud. Discuss how you could include the needs in your budget, andplan to save or the wants o amily members.

Goals:What is really important to you and your amily? Do you have goals? What goals do youplan to work toward?

A goal is a broad general statement o what you want to achieve. Goals provide direction

or your plans and actions.

Goal setting is more than deciding what is important to you. To help write your goals, askyoursel these questions:

1. What do I want to do with my money?

2. How much will it cost?

3. How long will it take to get that much money?

Write down your immediate, short-term, and long-term goals. Immediate goals are thosethings you want to get done in the next week, month, or three months. Short-term goalsare things you want to do or accomplish in six months to a year. Long-term goals are goalsyou want to reach in 1 to years or longer.

You may have more goals in one category than another. You need not have all three typeso goals.

As you list your goals, decide which goals you want to use your money or rst. Set dates toreach your goals. Ask yoursel which goals are the most important and which are the least

Fact Sheet

Budgeting Basics Wants, Needs, Goals


30/156


30

Budgeting Basics Wants, Needs, Goals

important. Just because a goal is short or long term it may be just as important to save or

it as the immediate goal. Ask yoursel these questions:

1. How important is this goal to me and my amily? Is it something I want, but could dowithout?

2. How urgent is this goal? I you have to buy a new car tag and pay personal propertytaxes in two months (or you will get a ticket), saving to pay that bill is an immediategoal.

3. What will happen i I dont work on this goal? Will your bills continue to grow withinterest charges, or will your credit rating be aected? How will you store ood i yourcant replace your old rerigerator?

. How much will I have to save each payday to reach this goal?

Goals are important to successul money management. Goals guide you to use your moneyor the things that are really important to you and your amily. Dont let setting goals bejust an exercise. Build them into your spending and saving plans.

Immediate Goals Costs Save Each Month(within next three months)

Short-Term Goals Costs Save Each Month(six months to a year)

Long-Term Goals Costs Save Each Month(1 to years or longer)



31/156


31

Budgeting Basics WorksheetNet Worth

Date:____________

Assets:Home $ _________________Other real estate __________________Business interests __________________Automobiles __________________Home urnishings and personal property __________________Checking account __________________Savings account __________________Stocks and mutual unds __________________Pension (cash value) __________________

Individual Retirement Account __________________Lie insurance (cash value) __________________Amounts owned you __________________Other __________________Other __________________

Total Assets: $ ______________Liabilities:

Mortgage (balance) $ _________________Current bills __________________Auto loan __________________

Other loans __________________Credit cards (balances) __________________Lie insurance loans __________________Taxes due __________________Other __________________Other __________________

Total Liabilities: $ ______________


Update your net worth at least once ayear to see how it has changed.

Current Net Worth $ _____________minus

Last Years Net Worth $ _____________equals

Change in Net Worth $ _____________

Assets $ _______________________minus

Liabilities $ _______________________equals

Net Worth $ _______________________


32/156


32

Budgeting Basics WorksheetWhat Do I/We Owe?

List all your debts, loans, and credit card accounts. For credit cards, list the phone number

to call in case they are lost or stolen. Knowing what you owe can help you determine i youcan take on more credit card or other debt.

Date:____________

Debts


Total $ $

Company Name Address and/or Phone Total Owed Monthly Payment


33/156


33

Tracking your daily spending helps you see where your money goes. One easy way is to

take a sheet o paper and old it in hal three times. This will give you eight sections. Writethe days o the week on seven sections, and totals on the last section. Keep it in yourpocket or purse, and every time you spend money, write down how much and what it wasspent on. Be sure to record purchases made in cash and by check, credit card, or debit card.Record weekly totals and transer to your budget worksheet.

Other methods to track your spending include carrying a small notebook to recordexpenditures, or saving receipts and writing on them what you purchased.

Track your spending or a month to get a good picture o where your money goes. Askeach amily member to participate in tracking their spending to get a total picture o the

amilys spending.

Heres a money tracking sheet example:

Dates:________ to ________


Monday Tuesday Wednesday Thursday

Friday Saturday Sunday Totals

Budgeting Basics Fact SheetTrack Your Daily Spending


34/156


3

Budgeting Basics WorksheetBudget

Month:_____________ Year:_______

Income (Take home pay and all other income): $ ________________

Expenses: Planned Spent

Housing and utilities $ _________________ $ _________________

Transportation __________________ __________________

Food __________________ __________________

Other debts __________________ __________________

Insurance __________________ __________________

Clothing __________________ __________________

Entertainment __________________ __________________

Other __________________ __________________

Total Expenses: $ ________________

Income Minus Expenses ( + or -): $ ________________

Available For Savings And To Reduce Debt: $ ________________



35/156


3

Month:_____________ Year:_______

Take Week 1 Week 2 Week 3 Week 4 Week 5 MonthlyHome TotalPay

Job 1 $ _________ $ _________ $ _________ $ _________ $ _________ $ _________

Job 2 __________ __________ __________ __________ __________ __________

Childsupport __________ __________ __________ __________ __________ __________

WIC __________ __________ __________ __________ __________ __________

TAF __________ __________ __________ __________ __________ __________

FoodStamps __________ __________ __________ __________ __________ __________

Otherincome __________ __________ __________ __________ __________ __________

Total $ _________ $ _________ $ _________ $ _________ $ _________ $ _________


Budgeting Basics WorksheetBudget (Income)


36/156


3

Budgeting Basics WorksheetBudget (Expenses and Savings)

Month: _____________ Year:______

Planned Spent Week 1 Week 2 Week 3 Week Week Month Total

Savings $ ____________

Housing& Utilities

Rent, mortgage _____________Gas, elec. _____________Water, sewer, trash _____________Telephone _____________Cable TV _____________Home supplies _____________

Transportation

Auto payments _____________Gas _____________Maintenance, repair _____________Other _____________

FoodGroceries _____________Eating out _____________School lunches _____________

Other DebtsLoans _____________Credit card payments _____________Other _____________

Insurance

Auto _____________Lie _____________Health _____________Homeowner, renter _____________

ClothingNew, used _____________Laundry _____________

Entertainment Movies, videos _____________

Other _____________

Other Medical _____________

Child care _____________

Personal care, supplies _____________Personal allowances _____________Gits, contributions _____________Tobacco, alcohol _____________Other _____________Other _____________

TotalExpenses _____________



37/156

KansasSta

teUniversityAgriculturalExperim

entStationandCooperativeExtensionService

3

By:MaryLouOdle

,SalineCountyExtensionAgent,FamilyandConsumerSciences,K-StateResearchandExtension


38/156


38By: Mary Lou Odle, Saline County Extension Agent, Family and Consumer Sciences, K-State Research and Extension

Year: ______

Some expenses do not occur every month, but rather at specic times o the year. Examplesinclude Christmas, back to school expenses, car tags and taxes, insurance, and birthdays.Knowing when these expenses are due can help you plan how to pay or them. One methodis to save or them each month.

List these expenses that you expect or your amily. Record the amount under the monthor months when the expense occurs. Divide the yearly cost by 12 to see how much to setaside each month. Then, total the amount that needs to be set aside each month orall o these expenses. It is a good idea to put this money elsewhere, such as in a savingsaccount, so that it will be available when needed to pay these expenses (and not used or

other things).Average

Yearly MonthlyItem Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec Cost Amount

Total Amounts

Set Aside Each Month

Budgeting Basics WorksheetYearly Calendar of Expenses


39/156


3By: Mary Lou Odle, Saline County Extension Agent, Family and Consumer Sciences, K-State Research and Extension

Does it seem like money fies out o your pocket or bank account without you noticing where it isgoing? Purchases o even small items can add up to quite a ew dollars over a period o time.

Check the items your amily spends money on. Total how much you spend each year. Look or ways

you can save. This is just a sample; you may want to add to the list.

Cost HowOten

MonthlyCost

YearlyCost

_____ Soda $ $ $

_____ Candy bar

_____ Movies

_____ Snacks

_____ Tobacco

_____ Alcohol

_____ Eating out

_____ CDs

_____ Lottery tickets

_____ Bingo

_____ Overdrat charges

_____ Late payment charges

_____ Caller ID and other phone charges

_____ Long distance phone calls

_____ Cell phone charges

_____ Cable TV extras

_____ Garage sales

_____ Auctions

_____ Book and video clubs

_____ Health club

_____ Magazine subscriptions

_____ Rent to own

_____ Other

_____ Other

_____ Other

Small amounts add up in a year. Beore spending ask yoursel:1. Do I need this expense or item? Or is it a want I could do without?2. How long did I have to work to pay or it?3. Could the money be better spent on something else such as building savings or reducingbills?

What could you cut down or cut out? ___________________________________________________

How much would you save each month $_________ or year $_________?

Managing your money is like managing your lie. You have to take an active role and make gooddecisions. I you dont, you will wonder how it slipped away without you noticing.

Budgeting Basics WorksheetDoes Your Money Have Wings?


40/156


0

Saving money is important or several reasons:

1. Provides unds or emergencies and unexpected expenses.

2. Helps you reach your nancial goals.

3. Gives you a eeling o security.

First, save and build an emergency und so you have money available or unexpectedexpenses such as car repairs, medications, and appliance breakdowns. Most experts

suggest having an emergency und equal to three months o living expenses in case youlose your job or become ill and cannot work. This allows you a cushion to pay bills.Oten people eel they cannot save that much money, but you can start by saving smallamounts out o each paycheck.

Save some money rom each paycheck toward your goals, and to pay those expenses thatdo not occur monthly, but at specic times during the year.

Pay yoursel rst is a good rule to ollow each time you receive money. Put moneyaside or savings beore spending your income and you will have a reserve to all backon when needed.

Practicing pay yoursel rst may mean you delay buying some items you want nowto build up your savings. The security o knowing you have money i your car breaksdown may be worth more than eating out a couple times a week.

How money grows:Your savings will grow as you add money to it, but it also grows through compoundinginterest. With compounding, saving even small amounts can add up over time.Compounding means the interest that is earned also earns interest when it is let inthe savings account. Let interest work oryou on your savings instead oagainstyou oncredit card debt.

Fact Sheet

Budgeting Basics Saving for Tomorrow


41/156


1

I you save $, $10, $1, or $20 at the beginning o each week and earn % interest, your

money would grow to the ollowing amounts:

Amount saved Value aterper week (5% interest)

2 yrs. yrs. 10 yrs.

$ $ $1,8 $3,3$10 1,0 2, ,$1 1,1 ,33 10,12$20 2,18 ,10 13,8

As the chart shows, the more you save, the more interest you earn and the aster the

account grows. I you save at the beginning o the week rather than the end o the week (ormonth/year), your money grows aster (since it has more time to grow). How much do youwant to try to save each week?

Rule o 72:The Rule o 2 is a quick way to gure how your savings will grow:

Divide 2 by the interest rate your money will earn. This will tell you how manyyears it will take or your money to double.

Example: I you earn % interest on your money, it will take 12 years or yourmoney to double.

2 / % = 12 yrs.

Divide 2 by the number o years you want your money to double and you willknow what interest rate you must earn. I you want to double your money in years,you must earn 12% interest.

2 / yrs. = 12%

Yearly savings to reach a goal:I you want to have $1,000, $,000, or $10,000 by a certain time, how much would youhave to save at the beginning o each year i your savings earned % interest?

Goals

Years to save $1,000 $5,000 $10,000Save per year

2 yrs. $. $2,28.80 $,. yrs. 1.3 83.8 1,3.10 yrs. 1. 3.8 1.1 yrs. 0.3 202. 0.31

I you divide the amount to save per year by 12, that is approximately how much you needto save each month to achieve the same goal.

Budgeting Basics Fact SheetSaving for Tomorrow


42/156


2

Budgeting Basics Fact SheetSaving for Tomorrow

Tips to start saving:

Save your change.

Cut back on eating out.

Put a dollar a day in a piggy bank, then into a saving account.

Save any raise in pay.

Save birthday money or any gits o money.

Hide your savings in a sae place until you have enough to put in the bank(so you wont be tempted to spend it).

Open an interest paying savings account.

What suggestions do you have or building your savings?

Start saving early in your lieThe ollowing chart shows how much you would have at age i you save either $1,000or $00 at the beginning o each year or 10 years, starting at age 2, compared to howmuch you would have i you save either $1,000 or $00 at the beginning o each year or30 years, starting at age 3.

How money grows:Saving early in lie and allowing the money to grow does make a dierence.

Save early in lie Save later in lie Save early in lie Save later in lie

(% Interest) (% Interest) (% Interest) (% Interest)

Save each Save each Save each Save eachAge year Value year Value Age year Value year Value

2-33 $1,000 $0 2-33 $00 $0

3 $1,000 $1,8 $0 3 $00 $8,80 $0

3-3 $0 $1,000 3-3 $0 $00

$0 $2,082 $1,000 $1,8 $0 $1, $00 $8,80

-3 $0 $1,000 -3 $0 $00

$0 $,208 $1,000 $3,8 $0 $3,32 $00 $2,31- $0 $1,000 - $0 $00

Invested $10,000 Invested $30,000 Invested $,000 Invested $18,000

Value at 65: $112,537 $101,073 Value at 65: $67,522 $60,644

To save $1,000 a year, save $80.23 at the beginning o each month.

To save $00 a year, save $8.1 at the beginning o each month.



43/156


3

Worksheet

Budgeting Basics Money Saving SuggestionsConsider what you and your amily can do to save money that could be used to increaseyour emergency und, save toward goals, or meet other amily needs.

Check what you are doing now and the changes you might try.

Do WillNow Try

Food____ ____ Check sales each week at grocery stores.

____ ____ Use a shopping lists or groceries and dont be tempted to buy what is not on thelist.

____ ____ Check day-old bread rooms or reduced items.____ ____ Use coupons i available or things you normally buy.____ ____ Cut down on eating out. Set a budget or eating out and stick to it.____ ____ Take brown bag lunches to work.____ ____ Ask about reduced cost or ree lunches or kids at school.____ ____ Eliminate high-cost, low-nutrition snack oods, sot drinks, and candy rom

shopping list.____ ____ Plan no meat meals a couple times a week.

Clothing____ ____ Shop garage sales and thrit shops or clothing and household items. Ask i they will

accept your oer i the price is higher than you want to pay.____ ____ Watch seasonal sales or items you cannot nd at thrit stores.____ ____ Buy washable clothing or use home dry cleaning.____ ____ Watch or shoe sales, especially or children. Trade speciality sport shoes with

riends.____ ____ Take at least one day to think about a purchase i you have to buy it at regular

price.____ ____ Take care o clothing such as hanging up garments, treating stains promptly, and

making minor repairs such as sewing on buttons.

Energy costs____ ____ Change the urnace lter every to weeks.____ ____ Put plastic over windows in winter to reduce air leaks.____ ____ Turn thermostat down to degrees at night in winter.____ ____ Dont waste energy on an empty house. Turn thermostat down during the day in

winter or up during the summer when no one is home.____ ____ Use weather stripping and caulking around doors and windows to reduce air

leaks.


44/156


Budgeting Basics WorksheetMoney Saving Suggestions

Do Will

Now Try____ ____ Place drat dodgers, such as rolled up towels, at bottom o doors.____ ____ Turn water heater down to 120 degrees and keep hot water usage to a minimum.____ ____ Wash clothing only when you have a ull load. Use cold water when

appropriate.____ ____ Hang clothing to dry on hangers or outside when possible instead o using the

clothes dryer or everything.____ ____ Turn water o when washing hands and brushing teeth.____ ____ Fix leaky aucets have a riend show you how.____ ____ Use ans instead o (or along with) air conditioner since circulating air eels

cooler.

____ ____ Turn air conditioner up at night and run a an in the bedroom.____ ____ Close blinds and pull shades to keep out heat and cold.____ ____ Open windows in early hours o summer days, then close beore the

temperature heats up.____ ____ Turn o the TV, lights, and computer screens when not in use.

Fun

____ ____ Plan amily un nights at home a couple times a month and play games, watchvideos, and pop popcorn.

____ ____ Attend ree events, such as airs and estivals. Look at exhibits and dont spendmoney on rides.

____ ____ Plan visits to museums and other historic places in area.____ ____ Pack a lunch and go to park to play.____ ____ Use the library to borrow books and videos and magazines. Check out other library

activities.

Shopping and personal

____ ____ Make a list and plan shopping so you dont make trips or one or two items andwaste gas.

____ ____ Walk where possible it is good exercise.____ ____ Watch gas prices since costs can vary depending on the service station.____ ____ Change oil in auto on a regular schedule, or ask a riend to change it or you.

____ ____ Ask several riends to recommend a good auto mechanic in case you need one.Always get a written estimate o repair costs.

____ ____ Pay bills on time and avoid late charges.____ ____ Check phone cards or lowest cost per minute. Use phone cards or long

distance so you are not surprised when bills arrive.____ ____ Sign up only or basic phone service. Say no to caller ID, call waiting, and other

phone services that can add up to substantial costs in a year.


45/156


Budgeting Basics WorksheetMoney Saving Suggestions

Do Will

Now Try____ ____ Cut down or eliminate tobacco and alcohol use.____ ____ Buy personal items such as shampoo and makeup at discount stores. Look or

low cost brands or sales.____ ____ Dont shop in convenience stores or personal or home items. Prices generally

are much higher.

____ ____ Limit the number o household cleaning products you purchase.

____ ____ Measure laundry detergents so you dont overuse products.

____ ____ I you shop or pleasure or to kill time, leave your money, checkbook, and

credit cards at home.

____ ____ Set limits on spending or gits and holidays; then stick to them.____ ____ Watch out or great sales such as % o. I you dont need the item or cant

aord it (even on sale), dont spend the money. Think about what it costs, not

just what you save.

____ ____ Dont be tempted by impulse items at the checkout stands, such as candy and

magazines.

____ ____ Dont buy on credit items that will be used up beore you get the bill.

____ ____ Use a debit card instead o credit card (where the amount o the purchase

is deducted immediately rom your account), but be sure to write the amount

in your checkbook and subtract it rom your balance.

____ ____ I you use a credit card, keep it wrapped in a x card and keep a running

total o amounts charged and dates o purchases.

____ ____ Know payday loan ees and avoid using the service (and paying the ees) i

possible.

____ ____ Find a place to cash checks that charges no ee or only a small ee.

____ ____ Pay credit card bills in ull to avoid paying interest.

____ ____ Compare bank services to get ree or low cost banking.

____ ____ Eliminate money orders and their ees when possible.

____ ____ Dont shop or recreation or because you are bored; its too easy to be tempted

to spend. Just stay out o stores.



46/156


Fact Sheet

Budgeting Basics Increase Your Income; Dont Fall for a ScamI your income is less than your monthly expenses, consider what you can do to increaseyour income:

get a second job,

work overtime,

check on assistance through local agencies,

ask amily or help, or

sell some possessions.

What are your suggestions or increasing your income?

Watch out or money-making opportunities that sound too good to be true. There aremany scam artists who want to take your money by oering bogus business opportunities.Look or these warning signs:

Many ads or raudulent business opportunities run in classied pages o newspapers.Look at the type o business. According to the Kansas Attorney General, someadvertisements are legitimate, but raudulent opportunities tend to be vendingmachine and display rack operations, pay phones, medical billing services and otencomputer or Internet related businesses. They usually require you to send money, thenail to deliver the equipment and products needed or the service; or products are oextremely poor quality.

You may nd yoursel with worthless equipment and merchandise and no way tocontact the company as they oten move to dodge authorities.

Some operations ask you to send money, then send you inormation to place asimilar type ad to make money.

Be careul o work rom home ads that claim you can make hundreds orthousands o dollars part time.

I you received letters promoting a money-making venture, such as asking you to

send money to other people listed in the letter and guaranteeing you will get a hugeamount o cash in return, this most likely is a raudulent scheme.

Once you all or a money making scam, your name is on a list and sold to otherscam operators who will send you more get rich inormation.

Remember: I a money-making opportunity sounds too good to be true, it probably is.It also may be illegal.Contact the Kansas Attorney Generals oce (1-800-32-2310)i you have questions about any money making opportunity and ask i they have hadcomplaints against the company.


47/156


Pyramid schemes

Be especially careul o Pyramid money-making schemes. In a pyramid scheme, you paymoney or the opportunity to receive more money that comes primarily rom the peopleyou recruit, rather than rom the sale o goods. You may have to buy a product that mightbe extremely costly. Pyramid schemes are illegal in Kansas, and promoting them is a elony.Pyramid schemes do not work because o the number o people who must be involved oryou to get your money back or make money.

The rst person recruits one person. At every additional level, each person in a pyramidscheme recruits one new person. As this goes on, the numbers become so large that itwould be impossible to recruit that many people.

Pyramid Matrix The Proo is in the Pyramid*

Level People Involved1 12 23 8 1 32 8 128 2

10 12

11 1,0212 2,0813 ,01 8,121 1,381 32,81 ,318 131,021 22,120 2,28821 1,08,22 2,0,12

23 ,1,302 8,388,082 1,,212 33,,322 ,108,828 13,21,28

*Pyramid Chart provided by the Kansas Attorney Generals Ofce.

Budgeting Basics Fact SheetIncrease Your Income; Dont Fall for a Scam



48/156


8

Fact Sheet

Budgeting Basics Getting HelpI there is a time in your lie when you need help paying your bills, or providing thenecessities or your amily, there are a variety o agencies and organizations that may beable to help.

Consider these and other organizations in your local community:

Social and Rehabilitation Service (SRS)

Temporary Assistance or Families (TAF) Food Stamp benets

Medical Assistance

Ask about assistance or your specic needs such as paying utility bills

Community programs

Heartland Share

Commodity Foods

Health Department

Women, Inant, and Children Program (WIC)

Food vouchers or pregnant women, and amilies with young children

Immunization clinics

Well child clinics

Salvation Army

Schools

Free and reduced cost meals

Food banks

Food

Money assistance or utility bills

Emergency aid hot lines

Churches


49/156


Red Cross

Homeless shelters

Local assistance organizations such as Christmas Funds

Money management education

County oces o K-State Research and Extension

Consumer Credit Counseling Services

Usually one organization such as a ood bank, United Way, church, or local K-StateResearch and Extension oce can direct you to other organizations in the communitythat can help. In medium to large cities, local organizations oten have a network to assist

people in getting help or their needs.

I you need help, dont hesitate to ask. I it bothers you to ask or help, just remember,when things are going better or you, you can help others, make a donation, or volunteer ata helping organization.


Budgeting Basics Fact SheetGetting Help


50/156


0

Fact Sheet

Budgeting Basics InsuranceInsurance is a way to protect yoursel against large expenses.

Automobile Insurance

There are three types o automobile insurance coverage you can purchase. Kansas lawrequires all persons who own an automobile, to have proo o liability insurance beorethey can buy a tag or the auto or renew the tag.

Liability: Protects you and pays i your auto causes damage to someone else(or someone elses property).

Comprehensive: Pays or losses to your auto, such as wind or hail damage and lossesrom thet.

Collision: Pays or repairs to your car ater an accident, or pays you the book valueo the car (current average selling price) i it is declared a total wreck ater an accident.

The cost o auto insurance is aected by:

Value o auto: The more expensive the auto, the more costly the insurance.

Type o insurance:Liability is the least expensive. Collision and comprehensive add

to the cost but will cover damages to your auto that liability does not cover.

Deductibles:This is the amount you pay beore the insurance pays on a claim. Thehigher the deductible, the lower the cost o the insurance.

Age o drivers:Teenagers and young adults have higher rates.

Location:Whether you live in a rural area or city, as well as how many miles aredriven to work or school, can aect rates.

Driving record: I you have had tickets or accidents, rates are oten much higher.

Discounts:Discounts may be available i:

House and car are insured with the same company.

Two vehicles are insured with the same company.

Drivers have good driving records.

Student drivers have good grades.


51/156


1

Budgeting Basics Fact SheetInsurance

I you have been rejected by three insurance companies, coverage will be extended to you

through the Kansas Automobile Insurance Plan. Check with an insurance agent about theprogram. It is more costly, but you will be covered and can purchase a tag.

Housing Insurance

RentersI you rent an apartment or house, your urniture, clothing, and personal property is notcovered by the owners insurance. The owners insurance covers only the owners property(such as the building), not your property.

You can purchase renters insurance to help you replace items lost in a re, tornado,

or other losses covered by the policy. You chose the deductible that you pay beore thepolicy pays. The higher the deductible, the lower the premium. Add up the value o yourbelongings and consider how you would replace them i your apartment or house burneddown and you did not have insurance.

OwnersHomeowners insurance covers losses listed in the policy not only or the house, but alsothe personal property in the house. It also provides liability coverage i someone is injuredon your property. The higher the deductible, the lower the premium.

Health Insurance

Check with your employer about a group health insurance plan, since group plans areusually less expensive than individual plans.

I your income is low, your amily may qualiy or medical assistance that covers somehealth costs. Check with the local Social and Rehabilitation (SRS) oce.

I your income is too high to quali y or medical assistance through SRS, you mayqualiy or the Kansas plan that covers children Health Wave. There are incomeguidelines depending on the number in the amily. The cost is approximately $10to $1 a month and covers all children in the amily under 18. Call 1-800-2-88to get an application. I approved, your children will receive an insurance card and

list o doctors who accept the card. Inormation about Health Wave is oten availablethrough a school counselor.

I you or another adult have applied or health insurance and have been turned downby two insurance companies because o bad health, you can apply to the KansasHealth Insurance Association or a policy that covers major medical expenses. Call1-800-20-138 to get an application and inormation on costs. This coverage is oranyone regardless o income level i they have been turned down or health insurancecoverage.


52/156


2

Budgeting Basics Fact SheetInsurance

I you are on Medicare and your income is low, check with a SRS oce to see i you

qualiy to have your Medicare Part B premiums paid, or i you are eligible or otherhealth benets.

Lie Insurance

Lie insurance protects your amily i you should die. The best buy or most people isterm lie insurance.

Term lie insurance is usually issued or 1, , 10, or 20 years and remains in aector that period o time, as long as you pay the premiums. You have to reapply or theinsurance at the end o the specied time period. Premium costs increase as you getolder.

You can buy a term insurance policy in the dollar amount o your choice. Check withat least three insurance companies to compare rates.

Also check with your employer. You may be able to get term lie insurance rom a groupplan. It may be less expensive, especially i you have a health problem.

DO YOU KNOW what your deductibles are on your auto and home insurance?

DO YOU KNOW what type o coverage you have on your auto? You can save money bycarrying only liability insurance i your car does not have much value. However, you willnot be covered or losses to your car, such as damages rom an accident, storm, or burglary.



53/156


3

Fact Sheet

Budgeting Basics Rent-to OwnRent-to-own is one way to get urniture and appliances or your home i you dont havemoney to pay the ull price o the item in cash. Rent-to-own is a purchase contract withairly small weekly or monthly payment plans.

Rent-to-own might be right or you i you only want to use urniture and appliances ora ew weeks or months; however rent-to-own is a very expensive way to urnish yourapartment or home.

Policies at rent-to-own stores vary, but you will pay a great deal more to own the item thanthe price or a similar item i purchased rom a department or discount store. Rent-to-ownitems also may be used items.

Making the rent-to-own decisionAsk yoursel these questions:

1. Is this a want or a need?

2. Can I wait to have this item when I can pay cash?

3. Is there a better use or my money?

. Can I aord to pay the weekly or monthly payments and still meet my amilys otherneeds?

. Have I shopped and compared prices or this and similar items at discount stores,second hand stores, garage sales, and auctions?

. Can I buy this item on credit elsewhere and pay much less or it?.

Beore you sign a rent-to-own ask these questionsPayments:

What is the total or each payment? Are payments weekly or monthly?

How must payments be made? By cash, debit or ATM card, or money order? Will theyaccept checks?

When are payments due?

How many rental payments are you required to make beore you can return the item?

How many payments must you make beore you own the item?

What is the total cost o the contract?


54/156


Budgeting Basics Fact SheetRent-to-Own

Can you purchase the item or cash beore the rent-to-own contract is up?

Is there a grace period or late payments? Most stores will demand the return o anitem i:

Weekly payment is two days late.

Monthly payment is ve days late.

They will come to your home and pick up the item i you do not return it!

How do you reinstate a rent-to-own contract? I you have paid a large amount on thecontract, then miss a payment, you will not want to lose the item. Be sure to knowyour rights on how to reinstate the contract.

Is the merchandise new or used?

Are you responsible or loss or damage? Most contracts state you are responsible orair market value i the item is stolen, lost, damaged, or destroyed. Ask what the airmarket value is.

Can you buy insurance on the item? What does it cover and how much does it cost?

Credit Checks:Will they do a credit check?

Most rent-to-own dealers do not check your credit rating. They ask you or employment

inormation such as employer, employer address, and your income. They will check theinormation. They also require reerences and may request that relatives be listed (so thecompany will have inormation about how to locate you and the merchandise).


55/156


Budgeting Basics Fact SheetRent-to-Own

Example o rent-to-own contract cost:

2 inch color TV

$. cash at rent to own store

$1. a week or 82 week equals total purchase price$1,33.18

$. a month or 1 months equals total purchase price$1,21.2 (monthly is slightlyless because some months have ve weeks)

I you use rent-to-own to urnish an apartment or home, here is an example o possiblecosts.

Weekly cost:TV $1.

Bedroom set $33.

Couch and love seat $23.

Table and chairs $18.

Computer $2.

Printer $10.00

Weekly total:

$133. equals $3.80 in a our week month, or $. in a ve week month

Yearly total:$133. x 2 weeks =$,.0 a year (Contract length or items will vary, but most itemswould have a contract or longer than one year.)



56/156


Fact Sheet

Budgeting Basics The Cost of MovingI you are moving into your own place or the rst t ime, or i you are moving rom onehouse or apartment to another, there are costs involved.

Documents

Basic Money Management