RCPA 2019 Annual Conference...•Three main credit bureaus: Equifax, Experian, TransUnion •Check...

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

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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

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?

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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