rcpa 2019 annual conference...•three main credit bureaus: equifax, experian, transunion •check...
TRANSCRIPT
RCPA2019 Annual Conference
September 25, 2019
Financial Education: A Necessity for All
Susan Tachau and Holly Zugay®
PA Assistive Technology Foundation and PA Housing Finance Agency
Today’s Objectives
• To understand why financial education is the foundation for living independently, working and participating in the community.
• To review the basic concepts of money values, money mapping (aka budgeting), banking basics, saving, borrowing, and transition planning as presented in the curriculum Cents and Sensibility: A Guide to Money Management.
• To provide additional resources, including activities and internet tools, to support your use of the curriculum with waiver participants, family members, service and supports coordinators and others.
Discussion Starter
www.menti.com
Enter code: __ __ __
Why Is This Topic So Important?
• Money is one of the biggest stressors in life for all of us, but
especially for individuals with disabilities who have unique
financial needs.
• We’re moving towards a culture of more people with disabilities working and being independent.
• Financial information and tools designed for the disability community is essential to forging independence.
₵ents and $ensibility: A Guide to Money Management
Needs vs. Wants
Needs:• Food
• Shelter
• Clothes
• Health Care
• Assistive Technology
Wants:• Out-To-Eat
• iPod
• Concert Tickets
• Video Games
Money mapping • Forward thinking• Setting the direction of your money
Three things will happen:• You understand how and where you spend your money
• You become more aware of your cash flow
• You control your finances and your future
Money Mapping: Get Ready to Budget
Get in the Zone!
When you see this compass,
you’ll know you’re in the
Money Mapping Zone—the
activity you’re working on is
helping you take the next
step along the path of your
personal money map!
Income: Money Coming In
• Earned Income (money from a job)
• Unearned Income
• Gross vs. Net
Work Incentives: It Always Pays to Work!
Social Security Administration have programs that make it possible to explore work while still receiving benefits
Under SSDI• Trial work period• Extended period of benefits• Expedited reinstatement
Under SSI• Continuation of benefits • Deduction of work expenses related to disability• Expedited reinstatement
(Hint: Report earnings through the Mobile Wage Reporting app.)
Understanding the Work Incentives Programs
Agencies that provide free counseling to people who qualify for SSDI and/or SSI and who are interested in working. These are funded by a federal program called Work Incentives Planning and Assistance (WIPA). In PA, the three agencies are: AHEDD, Disability Rights PA and Goodwill Keystone.
WIPA agencies can help you:• Understand the rules of specific work incentives;
• Analyze how work and earnings may affect your SSI and SSDI, health care and other public benefits; and
• Understand the services provided by OVR.
Sidebar: Free Tax Preparation
• Volunteer Income Tax Assistance (VITA)
• Making less than $55,000
• Individuals with disabilities
• ESL
• IRS trained volunteers• www.irs.treasury.gov/freetaxprep
Expenses: Money Going Out
What you spend money on: whether you pay in cash, with a check, by credit card or by debit card.
• Groceries
• Personal care items
• Eating out
• Transportation
• Clothing
• Entertainment
• Health insurance co-pays
Surplus (Money left over)
• Spending less than your income
• Money can be saved
Deficit (Not enough money)
• Spending more than your income
• Could lead to financial trouble
‒ Use savings
‒ Borrow
• Spend less, start with evaluating wants
Cash Flow = Income – Expenses
My Personal Money Map
• Your plan to use surplus monies or
address deficits
• Start with last month’s personal statement
of income and expenses
• Plan future spending amounts
• Plan for shortfalls
Remember: if your spending is more than your income,
you need to figure out how you can increase income or
cut spending before you complete your money map.
My Lifelong Commitment to Saving
Take seriously the idea of saving!
• You decide the amount: $5, $10, $20 per month…
• Ideally 10%
• Prioritize with obligations
What am I saving for? Create a savings goal.
Sidebar: SMART(Y) Goals
S = Specific
M = Measurable
A = Action-oriented
R = Realistic
T = Timely• Short term (new iPad)
• Mid term (car)
• Long term (house)
Y = Yours
Know the Asset Limitations
Supplemental Security Income (SSI)• Federal unearned benefit for those with limited resources
• Cash for basic living needs
• www.ssa.gov
• $2,000 asset limit (plus one house and one car)
PA Home and Community-based Waiver Programs• Services that waive Medical Assistance/Medicaid rules
• www.dhs.state.pa.us
• $8,000 asset limit (plus one house and one car)
Ways to Save and Not Lose Benefits
• Plan to Achieve Self-Support (PASS) Accounts
• Special Needs Trusts
• Individual Development Accounts (IDAs)
• ABLE Accounts (Achieving a Better Life Experience) www.paABLE.gov
C&S Page 28
Where Should I Keep My Money?
Credit Unions• Not for-profit
• Membership organizations
• Financial education opportunities
• Lower fees
Banks• For-profit institutions
• Provide more services (one-stop shops)
• Multiple branches
Check-Cashing Stores
Reasons for NOT using these:• It costs you money to cash a check; they charge you a fee usually between
3-7% of the check amount
• Not good to have a lot of cash in your pocket or around your house; safer to have your money in a protected account
800-PA-BANKS (800-722-2657)• Check-cashing store must be licensed
• Can ensure someone is properly licensed to do business in the state of Pennsylvania
• File complaints against regulated entities
Identity Theft
What is it? • One of the fastest growing crimes
• Someone steals your personal information and uses it to buy things with your money
What can happen?• Take out loans and open credit cards in your name• Rent an apartment and open utility accounts in your name• Use your ATM card• Get a driver’s license or ID card using YOUR name and HIS/HER photo• Try to use your Social Security number to obtain government benefits
How Can You Protect Your Identity
• Never throw away personal information in the trash - SHRED!
• Use only secure websites (https)
• Be aware of your surroundings when you use an ATM
• Be VERY cautious when giving out your Social Security number online or over the phone
• Keep account information in a safe place
• If you ask someone to access your account for you, be sure to get a receipt and monitor your account statements
• User ID and PIN numbers need to be difficult to guess
Sidebar: User ID and PINs
• Use at least 8 characters and a mix of upper & lowercase letters, numbers and symbols
• Do not use birthdays, easily guessed phrases, zip codes etc.
• Use different passwords for each account
• Do not use sequential passwords (ex. Password1, Password 2…)
• Do not share passwords to accounts via e-mail or text
Examples Bad Good (Less Generic)Better/best
Password password ILovetoGolfIl0ve2Golf!
New Password password1 ILiketoSki Il1ke2$ki!
Security Questions
Mom Maiden Name Doe Jane Mary DoeJ@neM@ryD03
Favorite Sport football Penn State Football!Penn$t@teF00ba11!
What Can You Do If You’re a Victim?
• File a police report
• Contact your financial institutions
• Contact your credit card company immediately
• Check your account statements carefully
• File a complaint with the Federal Trade Commission (FTC)• Call 877.438.4338
• Online at: www.Consumer.gov/section/scams-and-identity-theft
Credit Myths – True or False?
1. Credit reporting agencies approve or reject a person’s request for credit.
False
Credit reporting agencies give your credit information to lenders. The lenders use that information to make the decision to approve or reject your request for credit.
2. Information on a credit report only affect’s a person’s finances?
False
Information in a credit report does affect your finances. However, it can also affect your car insurance rates and whether you get rental housing. Many employers review credit reports before hiring a new employee. Employers know that people with money problems are
often less productive at work, miss more work days, have problems at home, and are more likely to steal from the workplace
Credit Myths – True or False?
3. My credit score will be lower if I view my credit reports.
False
Viewing your own credit report will have no negative impact on your credit score. You should review you credit reports at least
once a year.
Credit Myths – True or False?
4. I must keep a balance on my credit cards in order to build a credit history.
FALSE
Credit use and on-time payments are what build a credit history. You can do this and still pay off the balance in full
every month.
Credit Myths – True or False?
5. My employer must have my permission to see my credit report.
True
Your employer needs your written permission to view your credit report. However, other companies that have
business with you do not need explicit permission.
Credit Myths – True or False?
6. The safest place to get a loan is at a bank, credit union or savings bank.
True
Credit is available from other sources, such as payday lenders or pawn shops, but these are much more expensive
and often are not safe ways to obtain credit.
Credit Myths – True or False?
7. If I qualify for credit, I must be able to afford it.
False
You may qualify for an amount of credit where the payment is more than you can afford. You must decide if you can afford the new payment by estimating how it will fit on your money map.
Credit Myths – True or False?
What is Credit?
What is Credit?• Money you can borrow
• Promise to repay
• Not free (interest, fees, penalties)
Types of credit:• Installment
• Revolving
Credit (continued)
Why is it important?• Jobs
• Rent
• Insurance
How do you establish?• Take out a personal loan and pay it back on time
• Get a credit card, charge purchases, and pay your bill by the due date
• Pay taxes on-time
Credit Reporting and Credit Bureaus
• Lenders use the reports to decide whether or not to give you credit or a loan, and how much interest they will charge you
• Credit reports are records of how much you owe and how well you pay it back
• Three main credit bureaus: Equifax, Experian, TransUnion
• Check your FREE credit report regularly (Up to 3 times a year!)• www.annualcreditreport.com
• 877.322.8228
• Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281
• People who are blind or have low vision may request their free credit reports in Braille, large print or audio format.
NOTE: Credit scores are NOT included with free credit reports.
Credit Reporting and Credit Bureaus
Information about Credit Scores
• Based on information in your credit report
• An indicator of your ability to repay a loan on time
• FICO (Fair Issac Company) ranges from 300-850
• Higher the score the better – less risk
• It’s possible for someone not to have a credit score
FICO Scores
FICO Score APR Monthly Payment
Total Interest Paid
720-850 5.492% $233 $1,184
690-719 6.745% $238 $1,424
660-689 8.159% $245 $1,760
620-659 12.271% $265 $2,720
590-619 19.26% $300 $4,400
*Source: myfico.com for rates quoted 09/02/2019
Cost for a consumer borrowing $10,000 for 48-month used auto loan*
Side Bar: Poor Credit Costs
Preparing for a “Home of My Own”
• What can I do for myself?
• What can I do with assistance?
• Do I have the support needed?
• Food
• Personal Care and Hygiene
• Health
• Housekeeping
• Emergency and Safety
• Transportation
• Socializing
Rent or Buy-What’s the Difference?
Rent or Buy: What’s the Difference?
RENT BUY
Terms Month-to-monthLease
Mortgage loan
Up-front Costs Security deposit Down paymentClosing costs
Responsibilities The landlordThe tenant
Repairs, improvementsKeep in good condition
Making It “Home” Limited personalizationReturn to original condition
Limited by local codesPay for any changes
Expenses of Living Independently
Ongoing expenses:• Rent/mortgage loan payment
• Renter’s/homeowner’s insurance
• Utilities
• Parking
• Homeowner’s association fees
• Communications
• Hygiene, laundry, and housekeeping
supplies
One-time expenses:• Utilities
• Furniture/appliances
• Other household items
• Moving costs
Can I Afford to Live Independently?
Calculate maximum monthly housing expenses
My Housing Practice Money Map
Affordability Options: Review with Self Determination Housing of PA
• Shared housing
• Home and Community-Based Service waiver programs
• Housing Choice Voucher (Section 8)
• Public housing
What Do I Need?
Insurance – Homeowner’s/Renter’s
Types of Coverage:• Dwelling
• Other structures
• Personal property
• Loss of use
• Personal liability
• Medical payments
Know What’s NOT COVERED:• Flood
• Landslides
• Earthquakes
Tips: Insurance – Automobile
Adult Decision-Making
Key Adult Decision-Making Alternatives
• Representative Payee
• Guardianship
• Powers of Attorney
• Shared decision-making
You’re Almost There, One Last Step…
Which Activities Have You Completed?
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
Additional Resources and Glossary
Key Service Definitions
Within the Office of Developmental Programs:
Housing Transition and Tenancy Sustaining Services
(ODP Announcement: 083-18, date issued: 9/24/2018)
Please Register:https://patf.us/financialempowerment
Questions?
Financial Education: A Necessity for All
Thank you!
Susan Tachau and Holly Zugay®
PA Assistive Technology Foundation and PA Housing Finance Agency