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Project Independence Ex-cons Money Management 1

Money Management: Reestablishing YourselfTarget Audience: Ex-Cons

Audience Profile

To understand how to assist ex-cons, its helpful to recognize the realities of leavingprison and reentering society.

Men and women leaving prison are often homeless, poor, and struggling to staysubstance-free. There are few supportive services available to help them re-establishtheir lives so they can become contributing members of society. In 2009, a record630,000 inmatesan average of 1,600 a day will walk out of US prisons and back intosociety, according to the Urban League.

For most ex-cons, the journey of successful social reentry relies on finding and keepinga job. That, say experts, is a tough task made tougher by a faltering US economy andgrowing unemployment. Many ex-cons leave prison with $25 - $50 in "gate money" and

30 days to find work or risk going back to jail.

Ex-cons must also cope with the prospect of backsliding. According to the Bureau ofJustice Statistics, two-thirds of ex-cons are rearrested and nearly one-half arereincarcerated within three years of being released from prison.

Even if a parolee or ex-con finds work, a recent Princeton University research papersuggests that incarceration will confer a "wage penalty" of 10 to 20 percent. Fitting incan be hard. The typical ex-con or parolee lacks job references, a stable work history,transportation, housing, a telephone, or work clothes.

Program OverviewFor ex-cons, reentering society requires finding and keeping a joband learning how tomanage the money they earn. Establishing a solid financial foundation is essential tobeing able to afford housing, ensuring transportation to and from work, accessing skillsto earn a higher paying job, and doing more than just getting by day-to-day. The key tothis short program is to encourage participants to take important steps to reestablishthemselves financially so they can stay out of prison. This 60-minute program isdesigned to provide participants with a few financial tools to create a realistic budget,establish a banking relationship, and avoid money traps.

Facilitators Preparation: Review this guide and complete your own set of the accompanying

worksheets. Review the suggested length for each topic noted as (10) or (15) and so on.

This session is designed to be 60 minutes (1 hour) from Welcome to Wrap. Consider your own job-hunting experience. Have you been reasonably

successful in landing jobs that paid well? Have you ever struggled to makeends meet? Was there ever a time when you felt overwhelmed at a new jobbecause you werent up to speed?

Think about your own financial situation. Do you have a monthly spendingplan? Have you ever considered accessing a payday loan? Do you know

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anyone who has used a cash-checking outlet? Have you or anyone you knowbeen a customer of Rent-to-Own businesses? Are there some moneymanagement lessons learned from your own experiences that may be helpfulto share?

Consider that when it comes to talking about money, sharing your ownsuccesses and challenges may be more engaging and effective than

appearing to be lecturing.

Materials Needed:

Flip chart and easel or marker board; markers Pencils for participants Copies ofMyExpenses worksheet Copies ofMy Personal Spending Plan worksheet Copies ofChoosing a Bank Thats Right for You worksheet (plan on

providing at least three copies per person) Copies ofMy Action Plan worksheet

How to Facilitate this Session

Welcome

(8) Introduce yourself and express your pleasure in sharing moneymanagement tools that can be used to help participants reestablish aplace in society.

Have each participant introduce him/herself and share one currentfinancial concern. List the concerns on the flip chart or marker board.

Share the program objectives and tie them back to the list of concerns. Create a realistic spending plan Establish a banking relationship Avoid money traps Commit to an action plan

Making a Living versus Getting By

(25) Suggest to participants that while many people who leave prison end upback again later, it is possible to reenter society, reestablish yourself, andremain on the outside. One essential ingredient is learning and practicingsound money management skills.

?Ask participants how many of them have been successful managingtheir money in the past.

Divide participants into small groups of 3-4. Direct them to think of thekinds of expenses they may encounter as they re-enter society. Allowparticipants 5-7 minutes to complete this activity.

When time is up, randomly call on groups to share one expense theyidentified. Write responses on flip chart or marker board. Repeat until allexpenses have been exhausted.

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Distribute MyExpenses worksheet. Compare participants list ofexpenses against worksheet.

Stress that we all have a limited amount of money, and its important tomake decisions on a daily basis about how to manage the money we do

have.

Review the three columns on MyExpenses worksheet (budgetedamount, actual amount spent, and savings/loss). Answer any questionsand check for understanding.

Explain that many people resist setting up and using a spending plan.However, people who create a monthly spending plan and track theirexpenses are more likely to succeed financially! Using a spending plancan mean the difference between making a living and just getting bypaycheck-to-paycheck.

?Ask participants what information they still need in order to create theirown spending plans.

Distribute My Personal Spending Plan worksheet. Review the sourcesof income and the three columns provided.

Point out that the My Personal Spending Plan worksheet uses the totalsfor each category from the My Expenses worksheet.

Review the income-to-expenses comparison. Answer any questions andcheck for understanding.

?Ask participants if they have an established banking relationship.

Keeping Your Money Safe(10) Explain that setting up a checking and a savings account not only keeps

your money safe, it also helps you avoid problems in getting your checkscashed.

Encourage participants to shop at several banks and credit unions andtake time to compare costs and features for the most affordable account.Its also smart to consider locations when selecting a bank.

Distribute Choosing a Bank Thats Right for You worksheet. Review

the worksheet and answer any questions participants may have about theinformation listed. Suggest that if they currently have a bankingrelationship it might be helpful to visit their bank and complete theworksheet there. If not, they should visit several banks for a comparison.(Be prepared to hand out several copies of the worksheet to participants.)

Check that participants understand the differences between debit, credit,and ATM cards. Provide a brief explanation of all three, if necessary.

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Explain that if participants have had bank problems in the past they mayexperience difficulty in opening up a checking or savings account.Therefore, one of the first questions to ask when choosing a bank iswhether on not, as an ex-con, he/she will be allowed to open an account.

Encourage participants to seek assistance from their bank representative

if they do not have experience in using a checking or savings account.They will be happy to help.

Suggest that participants ask their employers if the company offers directdeposit of payroll checks. Having checks automatically deposited intoyour bank account is not only convenient, it can also help you to avoidspending it on things you dont need.

?Ask participants if they have ever used or considered using a checkcashing outlet or getting a payday loan.

Avoiding Money Traps

(10) Reiterate that managing money can be challenging at times, especiallywhen unexpected expenses occur and you need money. When peoplefeel anxious about their finances, its easy to make a mistake and getcaught in a money trap.

?Ask participants if they can name at least four common money traps. Asparticipants name a money trap, write the trap on the flip chart or markerboard.

Review the list against the list below and use the information provided todiscuss each trap.

Check cashing outlets charge a percentage of your totalcheck. Thats like pouring money down the drain. Whygive anyone a piece of your hard-earned pay?

Payday loans are quite costly when you do the math.Consider that a payday loan may charge you $20 toborrow $200 for two weeks. Then if you cannot pay thisback, you must rollover the loan for another $20 fee plushigh interest on the amount you borrow and rollover.Consumers will roll over these loans about 6 times onaverage. This means you paid $120 dollars in fees aloneto borrow $200.

Pawnshops may give you a fraction of what something isworth when you try to sell it to them, and then charge youmuch more than this to get the item back. In addition,pawnshops often make title loans that ultimately mean youcould lose your car! If you miss a payment, the pawnshopcan have your car repossessed.

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Tax refund anticipation loans (RAL) are also more costlythan you imagine. The tradeoff of getting your refundimmediately is that you significantly reduce the amount youget back since the RAL has a high fee.

Rent-to-own stores tempt you because the weekly rate

seems so affordable and, in time, you will own the item.Renting-to-own is actually very expensive because thelength of the loan is usually more than a year and you endup paying two or three times what the item originally cost.For example, a $400 TV at $15 a week for 65 weeks =$975, not including sales tax and delivery costs.

Credit card free checks are not free. Using a check tiedto your credit card means that you will be charged thesame rate of interest (sometimes a higher rate) on theamount of your check, as if you used your credit card topay for the item.

Explain that each of these quick fixes is actually a money trap. Onceyou get caught, its tough to get out. The traps may put you deeper intodebt and cause greater anxiety.

Suggest that by using the tools discussed today, participants can avoidthese money traps altogether.

?Ask participants if they are ready to take on the responsibility ofmanaging their money.

Wrap

(5) Review the list of concerns and note which ones were addressed andwhich ones will need to be addressed at a later time.

Review the topics covered in the session: Estimating and tracking expenses Creating a monthly spending plan Establishing a banking relationship Setting up direct deposit of payroll checks Avoiding money traps

Remind participants to use theirMy Personal Spending Planworksheets.

Encourage participants to establish a banking relationship after shoppingaround and completing several Choosing the Bank Thats Right ForYou worksheets.

Distribute My Action Plan worksheets. Encourage participants to take afew minutes to complete their worksheets to ensure that they get startedreestablishing themselves immediately.

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Thank participants for their attendance and let them know how much youenjoyed spending an hour with them. Provide them with any additionalinformation as agreed upon with your agency/prison contact.

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Project Independence Ex-cons Money Management

My ExpensesDirections: List the amounts you think youll spend in the first column. Then fill in your actual costsin column two. Subtract your actual amount form your estimated amount to see how much youresaving or over-spending.

Expense Estimated Amount Actual Amount Spent Savings/LossHousing

Rent/mortgage $ _____________ $ ________________ $ _________ Utilities $ _____________ $ ________________ $ _________ Phone $ _____________ $ ________________ $ _________ Other $ _____________ $ ________________ $ _________

Food $ _____________ $ ________________ $ _________

Transportation Car payment $ _____________ $ ________________ $ _________ Gas/Repairs $ _____________ $ ________________ $ _________ Insurance $ _____________ $ ________________ $ _________ Bus/light

rail/subway

$ _____________ $ ________________ $ _________

Other $ _____________ $ ________________ $ _________

Health Care Insurance $ _____________ $ ________________ $ _________ Co pay $ _____________ $ ________________ $ _________ Payments $ _____________ $ ________________ $ _________

Loan Payments $ _____________ $ ________________ $ _________Credit Cards $ _____________ $ ________________ $ _________School/Training $ _____________ $ ________________ $ _________

Personal/Family Child Support $ _____________ $ ________________ $ _________ Child Care $ _____________ $ ________________ $ _________ Clothing $ _____________ $ ________________ $ _________ Toiletries $ _____________ $ ________________ $ _________ Other $ _____________ $ ________________ $ _________

Legal Restitution $ _____________ $ ________________ $ _________ Other $ _____________ $ ________________ $ _________

Savings $ _____________ $ ________________ $ _________

Entertainment $ _____________ $ ________________ $ _________Other $ _____________ $ ________________ $ _________

TOTALS $ _____________ $ ________________ $ _________

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My Personal Spending Plan

Income Estimated Amount Actual Amount Received Over/UnderAfter-tax wages $ _____________ $ ________________ $ _________After-tax wages fromspouses income

$ _____________ $ ________________ $ _________

Tips, bonuses, cash

from hobbies

$ _____________ $ ________________ $ _________

Unemploymentcompensation

$ _____________ $ ________________ $ _________

Public Assistance $ _____________ $ ________________ $ _________Child support $ _____________ $ ________________ $ _________Food Stamps $ _____________ $ ________________ $ _________Other $ _____________ $ ________________ $ _________Other $ _____________ $ ________________ $ _________

TOTALS $ _____________ $ ________________(a) $ _________

Expense Estimated Amount Actual Amount Spent Savings/LossHousing $ _____________ $ ________________ $ _________Food $ _____________ $ ________________ $ _________Transportation $ _____________ $ ________________ $ _________Health Care $ _____________ $ ________________ $ _________Loan Payments $ _____________ $ ________________ $ _________Credit Cards $ _____________ $ ________________ $ _________School/Training $ _____________ $ ________________ $ _________Personal/Family $ _____________ $ ________________ $ _________

Legal $ _____________ $ ________________ $ _________Savings $ _____________ $ ________________ $ _________Entertainment $ _____________ $ ________________ $ _________Other $ _____________ $ ________________ $ _________

TOTALS $ _____________ $ ______________(b) $ _________

Compare Actual Income and ExpensesActual monthly income $ _______________________________(a)(minus) actual monthly expenses - $ _______________________________(b)

$ _______________________________

Do you have enough income to cover your expenses? If not, can you increase yourincome? Review your expenses and determine if there are any you can cut or at leastdecrease.

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Choosing a Bank Thats Right for You

Name of bank: __________________________________________________________

Phone number: _________________________________________________________

Branch information:

Location nearest your home: ______________________________________ Location nearest your work:_______________________________________ Number of branches: ____________________________________________

Number of ATMs: ________________________________________________________

Bank hours: ____________________________________________________________

Are your funds FDIC insured? ______________________________________________

Types of accounts: _______________________________________________________

Amount of initial deposit required: ___________________________________________

Fees:

Must maintain a minimum daily balance of: __________________________ Must maintain an average daily balance of: __________________________

Monthly maintenance charge: ____________________________________

Interest:

How much interest do you earn on your account? _____________________ How is it calculated? ___________________________________________

Charges:

Printing checks: ______________________

Bouncing checks: _____________________ Stopping checks: _____________________ Certifying checks: _____________________ Incarceration penalty: __________________

Balance inquiries:

At teller window: ______________________ Over the Internet: _____________________ At ATMs: ____________________________ By phone: ____________________________

Special services:

Internet banking: ______________________ Fund transfer by phone: ________________ Debit card: ___________________________ Educational classes: ___________________

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My Action Plan

Main message for me from this session:

My personal commitment to action:

Obstacles that may get in my way:

What I need to do to succeed:

Use Limitations. These materials are intended for non-commercial educational and instructional use only. Thesematerials may not be used in connection with any sale, advertisement, endorsement or promotion of any service,product, person or business and may not be commercially published, sold or offered for sale.

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Ex cons_4.19