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Managing your money and expenses:
“Family Financial Literacy”
A MANUAL FOR HABITAT FOR HUMANITY BORROWERS
The Family Expense Notebook
NAME:
�
IndexEXERCISE #1 .............................................................................................................. 4
What do I spend or invest my money on? .................................................................4
EXERCISE #� .....................................................................................5
Expense or Investment? ...................................................................................................5
EXERCISE #3 .....................................................................................6
Characteristics of a Habitat Loan ..................................................................................6
EXERCISE #4 .....................................................................................7
List of Family Expenses......................................................................................................7
EXERCISE #5 .....................................................................................13
Family Income Chart .........................................................................................................14
EXERCISE #6 .....................................................................................15
Sample Monthly Family Expenses Chart ....................................................................15
Exercise #6 Monthly Family Expense Chart ...............................................................16
EXERCISE #7 .....................................................................................�0
Sample Monthly Family Budget ....................................................................................�0
Exercise #7 Monthly Family Budget .............................................................................�1
EXERCISE #8 .....................................................................................�0
Payment Capacity ..............................................................................................................�0
Exercise #8 Payment Capacity .......................................................................................�1
GLOSSARY ........................................................................................�5
Managing your money and expenses“Family Financial Literacy”
A MANUAL FORHABITAT FOR HUMANITY BORROWERS
�nd Edition revised April �007.
CreditsFunding:Citigroup Foundation
Proposal Designers,Financial Literacy ProjectChris LittleLee MartinProject Coordinator:Mario A. MoránText:Giovanna NúñezDesign and Illustration:Alma CreativaTranslator:Meghan Callan-HinsvarkPrintingJiménez & Tanzi
Document revisors and trainer workshop facilitators:
Habitat for Humanity International (Latin Americaand the Caribbean):Belinda Florez, Lina María Obando, Marco Montemayor, Enrique Montero, Pablo García, Juan Ochoa, Juan de Dios Valdez y Judith Hamje. Habitat El Salvador:Hugo Ochoa, Beatriz Bejarano.Habitat Guatemala:Mario López, Juan Carlos Hernández.
Country-level Logistics and coordination for projectimplementation:
Habitat Colombia:María Cristina, Carlos González.Habitat Chile:Loreto Barriga y Eloisa Gutiérrez. Habitat Guatemala:Olga García, Alma Ochoa y Hender Gaitán. Habitat República Dominicana:Alejandro Santana, Genarina Santos.
Habitat for Humanity International Latin America and the Caribbean.
www.habitat.orgTelephone: (506) �96 81�0Fax: (506) �91 7475 P.O. Box: 1513-1�00 Pavas San José Costa RicaISBN: 978-9968-9580-6-6
3 The Family Expense Notebook
Introduction
The Family Expense Notebook is a fundamental auxiliary tool, to be used alongside The Manual for HFH Borrowers. You have a right to a better quality of life; this book is designed for those of you interested in improving your housing conditions.
Careful use of this tool will help you manage your money and expenses.
Within, you’ll find 8 basic tools and exercises: Expense or Investment, Characteristics of a Habitat Loan, Family Expense Chart, Family Income Chart, Monthly Family Expense Chart, Monthly Family Budget Chart, y Payment Capacity all of which you’ll remember from The Manual for HFH Borrowers. They’re for you to fill out with your family, making notes and keeping records of your income and expenses – activities that will help you increase your monthly savings.
Incorporate these tools into your daily routine, and you’ll see: You are the owner of your own future!
4
Exercise # 1What do I spend or invest my money on?
How do I spend my money? How do I invest my money?Stereo Equipment Foreign Language classes for my children
Movie Tickets Community Savings Payments
Drinks for a Party School Books
1
�
3
4
5
6
7
8
9
10
11
1�
13
14
15
16
17
18
19
�0
�1
��
�3
�4
�5
�6
�7
�8
�9
30
31
Day
Go over the answers with your family
5 The Family Expense Notebook
Exercise # �Check whether it is an expense or an investment
• Buying Property.
• Buying new curtains.
• Fixing my roof.
• Loan payments on my house.
• Paying Rent.
• Moving Expenses.
• Helping my neighbor build with Habitat.
• Buying school books.
•
•
•
•
•
•
Expense Investment
Look over the answers with your family
Add moreexamples
6
Exercise # 3Characteristics of a Habitat LoanFind the correct response.
• We suggest that you complete the following exercise to reinforce ideas talked about in the section that you just went over about
the characteristics of a habitat loan.
• Take a look at the following chart. In the left column is a list of the characteristics of a habitat loan. In the right column, all jumbled
up, are the answers that correspond to each characteristic. Draw a line between the characteristic and it’s appropriate description.
Follow the example.
• We recommend that you talk with your family about the characteristics of a Habitat loan and the possibility that your family could
be granted one.
Characteristics of a HFH Loan
Family Involvement.
Cost of protecting the revolving fund.
Cost of the loan.
Down Payment.
Loan that is adjusted to fit the payment capacity of each family.
Non-profit.
Revolving Fund.
Technical Assistance.
In-kind Loans.
Indirect Costs of construction.
Community Organization.
Response
oMoney that is returned to Habitat through loan payments, which is then used to build
more houses.
oTrainings for potential borrowers that covers the loan process, construction, mutual help, etc.
oLoan given in goods or services, not cash.
oLoans without profit.
oThrough mutual help borrowing families come together and participate in sweat equity while working with Habitat to build houses.
oHabitat only recovers the expenses used in construction, loan administration and
upkeep, and the cost of protecting the revolving fund from devaluation.
oWork between the families and neighbors to improve the development of their
community.
oCharge that the borrower pays which safeguards the fund where money from other borrowing families is deposited and which protects it from devaluation.
oThe value, payments, and payment plans are adjusted to fit the payment capacity of each family.
oFirst or initial payment of a loan which the borrower pays that gives confidence to Habitat that the borrowing family will be serious and responsible with their loan.
oIncludes expenses to grant and administer the loan, as well as other administrative
expenses, such as home visits, transportation, paperwork, trainings, etc.
7 The Family Expense Notebook
Exercise # 4Make a list of your expenses each day until you have completed a week, two weeks or month and add them up.
LIST OF FAMILY EXPENSES AMOUNTDATE:
MONTH/DAY
NECESSARY:
YES OR NO
Daily Busfare 15 JULY 3
Meals for the week 65 JULY 7
1
�
3
4
5
6
7
8
9
10
11
1�
13
14
15
16
17
18
19
�0
�1
��
�3
�4
�5
�6
�7
�8
�9
30
31
Day
TOTAL MES:
8
1
�
3
4
5
6
7
8
9
10
11
1�
13
14
15
16
17
18
19
�0
�1
��
�3
�4
�5
�6
�7
�8
�9
30
31
Day
TOTAL MES:
LIST OF FAMILY EXPENSES AMOUNTDATE:
MONTH/DAY
NECESSARY:
YES OR NO
Exercise # 4Make a list of your expenses each day until you have completed a week, two weeks or month and add them up.
9 The Family Expense Notebook
1
�
3
4
5
6
7
8
9
10
11
1�
13
14
15
16
17
18
19
�0
�1
��
�3
�4
�5
�6
�7
�8
�9
30
31
Day
TOTAL MES:
LIST OF FAMILY EXPENSES AMOUNTDATE:
MONTH/DAY
NECESSARY:
YES OR NO
Exercise # 4Make a list of your expenses each day until you have completed a week, two weeks or month and add them up.
10
1
�
3
4
5
6
7
8
9
10
11
1�
13
14
15
16
17
18
19
�0
�1
��
�3
�4
�5
�6
�7
�8
�9
30
31
Day
TOTAL MES:
LIST OF FAMILY EXPENSES AMOUNTDATE:
MONTH/YEAR
NECESSARY:
YES OR NO
Exercise # 4Make a list of your expenses each day until you have completed a week, two weeks or month and add them up.
11 The Family Expense Notebook
1
�
3
4
5
6
7
8
9
10
11
1�
13
14
15
16
17
18
19
�0
�1
��
�3
�4
�5
�6
�7
�8
�9
30
31
Day
TOTAL MES:
LIST OF FAMILY EXPENSES AMOUNTDATE:
MONTH/DAY
NECESSARY:
YES OR NO
Exercise # 4Make a list of your expenses each day until you have completed a week, two weeks or month and add them up.
1�
1
�
3
4
5
6
7
8
9
10
11
1�
13
14
15
16
17
18
19
�0
�1
��
�3
�4
�5
�6
�7
�8
�9
30
31
Day
TOTAL MES:
LIST OF FAMILY EXPENSES AMOUNTDATE:
MONTH/DAY
NECESSARY:
YES OR NO
Exercise # 4Make a list of your expenses each day until you have completed a week, two weeks or month and add them up.
13 The Family Expense Notebook
Exercise # 5
FAMILY INCOME CHART MONTH: JULY Week Nº: 1
Family Members Amount
Fred 600
Claire 200
Charlie 300
Mary 100
TOTAL 1200
FAMILY INCOME CHART MONTH: Week Nº: 1
Family Members Amount
TOTAL
FAMILY INCOME CHART MONTH: Week Nº: �
Family Members Amount
TOTAL
FAMILY INCOME CHART MONTH: Week Nº: 3
Family Members Amount
TOTAL
14
FAMILY INCOME CHART MONTH: WEEK Nº: 4
Family Members Amount
TOTAL
FAMILY INCOME CHART MONTH: WEEK Nº: 5
Family Members Amount
TOTAL
FAMILY INCOME CHART MONTH: WEEK Nº: 6
Family Members Amount
TOTAL
FAMILY INCOME CHART MONTH: WEEK Nº: 7
Family Members Amount
TOTAL
Exercise # 5
15 The Family Expense Notebook
MO
NTH
LY F
AM
ILY
EXPE
NSE
CH
ART
FAM
ILY
INCO
ME
PER
MO
NTH
:
JO
HN
SON
FA
MIL
Y
$1�
00 a
mon
th
A
MO
UN
T SP
ENT
(AS)
NEC
ESSA
RY
EXPE
NSE
S (N
E)1
�3
45
67
89
1011
1314
1516
1718
19�0
�1��
�3�4
�5�6
�7�8
�930
31TO
TAL
Rent
160
160
Scho
ols
100
100
Uni
vers
ity
Don
atio
ns
Fam
ily F
ood
�0�0
�5�0
4040
�0�0
40�4
5Fo
od: L
unch
Ligh
t65
65H
ealth
�515
40Tr
ansp
orta
tion
1510
1530
15�0
�0�0
145
Book
s1�
51�
5Pe
rson
al H
ygie
ne30
�010
60TO
TAL
NE
�10
3015
5018
560
1�5
�060
60�0
15�0
50�0
940
UN
NEC
ESSA
RY
EXPE
NSE
S (U
E)1
�3
45
67
89
1011
1314
1516
1718
19�0
�1��
�3�4
�5�6
�7�8
�930
31TO
TAL
Mov
ies
Eatin
g ou
t50
4090
Mis
cella
neao
us
5035
85N
ew Te
levi
sion
4040
Birt
hday
Par
ty10
010
0TO
TAL
UE
100
5040
5040
3531
5TO
TAL
EXPE
NSE
S
(NE+
UE)
310
3015
100
��5
110
1�5
�060
60�0
4015
�050
551�
55Exercise # 6
UN
NEC
ESSA
RY E
XPEN
SES
(UE)
16
MONTHLY FAMILY EXPENSES CHARTFAMILY INCOME PER MONTH:
AMOUNT SPENT (AS)
NECESSARY
EXPENSES (NE)1 � 3 4 5 6 7 8 9 10 11 1� 13 14 15 16 17 18 19 �0 �1 �� �3 �4 �5 �6 �7 �8 �9 30 31 TOTAL
Rent
Schools University
Donations
Family food
Food: Lunches
Electricity
Water
Telephone
Transportation
Health
TOTAL NE
UNNECESSARY EXPENSES
(UE)1 � 3 4 5 6 7 8 9 10 11 1� 13 14 15 16 17 18 19 �0 �1 �� �3 �4 �5 �6 �7 �8 �9 30 31 TOTAL
Movies
Eating out
TOTAL UE
TOTAL EXPENSES
UNNECESSARY EXPENSES (UE)
Exercise # 6
17 The Family Expense Notebook
INGRESOS FAMILIARES AL MES:
GASTOS
NECESARIOS
(GN)
1 � 3 4 5 6 7 8 9 10 11 1� 13 14 15 16 17 18 19 �0 �1 �� �3 �4 �5 �6 �7 �8 �9 30 31 TOTAL
Alquiler
Colegios Instituto
Donaciones
Alimentación
Loncheras
Luz
Agua
Teléfono
Transporte
Salud
TOTAL GN
GASTOS
INNECESARIOS (GI)1 � 3 4 5 6 7 8 9 10 11 1� 13 14 15 16 17 18 19 �0 �1 �� �3 �4 �5 �6 �7 �8 �9 30 31 TOTAL
Cine
Comidas fuera de casa
TOTAL GI
TOTAL GASTOS
GASTOS INNECESARIOS(GI)
18
MONTHLY FAMILY EXPENSES CHART
FAMILY INCOME PER MONTH:
Amount Spent (AS)
NECESSARY
EXPENSES (NE)1 � 3 4 5 6 7 8 9 10 11 1� 13 14 15 16 17 18 19 �0 �1 �� �3 �4 �5 �6 �7 �8 �9 30 31 TOTAL
Rent
Schools University
Donations
Family food
Food: Lunches
Electricity
Water
Telephone
Transportation
Health
TOTAL NE
UNNECESSARY EXPENSES
(UE)1 � 3 4 5 6 7 8 9 10 11 1� 13 14 15 16 17 18 19 �0 �1 �� �3 �4 �5 �6 �7 �8 �9 30 31 TOTAL
Movies
Eating out
TOTAL GI
TOTAL GASTOS
UNNECESSARY EXPENSES (UE)
Exercise # 6
19 The Family Expense Notebook
CUADRO DE GASTOS FAMILIARES MENSUALINGRESOS FAMILIARES AL MES:
Cantidad Gastada (CG)
GASTOS
NECESARIOS
(GN)
1 � 3 4 5 6 7 8 9 10 11 1� 13 14 15 16 17 18 19 �0 �1 �� �3 �4 �5 �6 �7 �8 �9 30 31 TOTAL
Alquiler
Colegios Instituto
Donaciones
Alimentación
Loncheras
Luz
Agua
Teléfono
Transporte
Salud
TOTAL GN
GASTOS
INNECESARIOS (GI)1 � 3 4 5 6 7 8 9 10 11 1� 13 14 15 16 17 18 19 �0 �1 �� �3 �4 �5 �6 �7 �8 �9 30 31 TOTAL
Cine
Comidas fuera de casa
TOTAL GI
TOTAL GASTOS
GASTOS INNECESARIOS(GI)
�0
Exercise # 7 MONTHLY FAMILY BUDGET
TOTAL INCOME : 1�00 – TOTAL EXPENSES: 1�55 = -55
• Positive: Your savings capacity • Negative: you are spending more than you make.
Monthly expenses Budgeted Amount Amount Spent Savings/Deficit
MONTHLY FAMILY BUDGET
Budget for the month of: JULY �006
Family Income: 1�00
SAMPLE FAMILY BUDGET OF THE JOHNSON FAMILY
Nececssary ExpensesRent 160 160 0
School/University 100 100 0
Donations 0 0 0
Family Food/ Snacks �30 �45 -15
Electricity 60 65 -5
Water 0 0 0
Telephone 0 0 0
Transportation �00 1�5 75
School Books 50 1�5 -75
Personal Hygiene 90 80 10
Health 50 40 10
Clothing, Shoes 0 0 0
Unnecessary ExpensesMovies �5 0 �5
Eating out 80 90 -10
Payments for new television 40 40 0
Birthday Party 55 100 -45
Other: Miscellaneaous 60 85 -�5
Total 1�00 1�55 -$55.00
�1 The Family Expense Notebook
Exercise # 7 MONTHLY FAMILY BUDGET SEM
Monthly Family Budget
Budget for the month of:
Family Income:
Necessary ExpensesRent
School/University
Donationss
Family Food/ Snacks
Electricity
Water
Telephone
Transportation
School Books
Personal Hygiene
Health
Clothing, Shoes
Unnecessary ExpensesMovies
Eating Out
Total
Expenses 1)
Budgeted Amount
�)
Amount Spent
(3)
Savings/Deficit
TOTAL INCOME: – TOTAL EXPENSES : =
• Positive: Your savings capacity • Negative: you are spending more than you make.
��
PRESUPUESTO FAMILIAR MENSUAL
Presupuesto para el mes de:
Ingresos de la familia:
Necessary ExpensesRent
School/University
Donationss
Family Food/ Snacks
Electricity
Water
Telephone
Transportation
School Books
Personal Hygiene
Health
Clothing, Shoes
Unnecessary ExpensesMovies
Eating out
Total
Expenses 1)
Budgeted Amount
�)
Amount Spent
(3)
Savings/Deficit
TOTAL INCOME: – TOTAL EXPENSES : =
• Positive: Your savings capacity • Negative: you are spending more than you make.
Exercise # 7 MONTHLY FAMILY BUDGET SEM
�3 The Family Expense Notebook
Exercise # 8Payment Capacity
Recommendation: To complete this exercise you must have completed all the previous exercises and found a
way to be saving more than you are spending.
Think about the exercise on page 44 of the Family Financial Literacy Manual:
You and your family have a monthly income of $1�00 and you have a created a budget with a projected $850 in expenses. Let’s
say that you find at the end of the month that you only spent $800, what would your payment capacity be?
Do the following equation: 1�00-800=400
Your family payment capacity would be $400. Now, what would happen if you were to invest that $400 in a loan? Or, if there
was a family emergency, could you take care of it without putting your family in debt? Keeping possibilities like this in mind, we
recommend that you allocate a maximum of 60% of the $400 towards the loan. In other words, this would mean $�40 would
go towards loan payments and $160 (40% of your payment capacity) would be for your family savings. This way, you and your
family would have some sort of financial support for any unforeseen situations/expenses that may arise.
Real family income
Budgeted payment capacity
Total income
+
Real family expenses
Savings for unforeseen items
Payment capacity
Total income
+
�4
What did you think of this exercise?
You did the exercise with your own family’s information and this demonstrates the possibility of taking out a loan with Habitat or not.
• Family’s monthly income: Income:
• Sum up the family’s monthly expenses: Expenses:
• Subtract the following: Income – Expenses
Income: – Expenses: =
Now with the remainder let’s do some calculations:
Remainder: Multiplied by 60 % =
Remainder: Multiplied by 40 % =
this is your remainder and payment capacity.
this is the amount you could use to make the loan payments to Habitat.
this is the amount that remains to take care of any unforseen situations.
Exercise # 8
• Family’s monthly income: Income:
• Sum up the family’s monthly expenses: Expenses:
• Subtract the following: Income – Expenses
Income: – Expenses: =
Now with the remainder let’s do some calculations:
Remainder: Multiplied by 60 % =
Remainder: Multiplied by 40 % =
this is your remainder and payment capacity.
this is the amount you could use to make the loan payments to Habitat.
this is the amount that remains to take care of any unforseen situations.
�5 The Family Expense Notebook
Glossary
Collateral.
It is any real estate (land), other property (furniture, equipment) , or person (guarantor), that supports the loan
agreement made with Habitat.
Community organization: Habitat is interested in creating conditions in which everyone can have an adequate
place to live. Habitat builds and improves housing with the participation of the borrowing families, who help
build their own homes and participate in community development activities.
Controlling your Expenses.
We’ve seen the importance of being consistent and honest with ourselves. This is demonstrated when we
agree to responsibly manage the family’s expenses and thus are able to save the proposed amount needed to
reach our goals. For example, in the previous section we saw that Fred changed one of their family’s traditions
to comply with their savings plan by taking the family out to eat once a month rather than every Sunday.
Credit History.
This is how your family has dealt with their previous responsibilities to repay other loans you have taken out
in the past. That is, did the family complete and not default on the payment of the loan within the committed
timeframe?
Devaluation.
This is when flucuations in a country’s currency effects the value of one’s assets, like stock, bank accounts, etc.,
causing their value to lower.
Family BudgetA budget is an itemized plan of our income and expenses. The budget helps us see how much money we make, where it goes and how to balance our income with our expenses. It is a very important tool that disci-plines, organizes and allows us to see if we have the payment and saving capacity that we need to invest in
our goals- for example, improving your house.
Family stability:
My current house or property should be an adequate, safe place where the home construction or improvement
project may be carried out.
Habitat For Humanity
Habitat for Humanity is a movement involving volunteers, churches, businesses, NGOs, the government and
families, all working towards eradicating substandard housing.
Indirect Costs.
These are costs incurred by Habitat to facilitate the loan approval process, sweat-equity monitoring,
improvement of your iving conditins and servicing the loan. Some examples of this would be, the cost of
processing paperwork, credit evaluations (home visits), family training, office administration and operating
costs, as well as a charge to protect the revolving fund from devaluation.
�6
Loans for complete housing solutions.
This type of loan provides the funds necessary to build a complete, simple, safe, and affordable home in
accordance with the borrowing family’s payment capacity.
Loans for gradual house construction.
This is a viable option for those families who do not have the ability to assume a loan for a complete house.
A house may be built gradually, in stages, in which case the loan should be adjusted to accomodate each
phase of construction.
Loans for home improvement.
This loan provides the funds necessary for carrying out a wide variety of home improvements or repairs,
such as: additions, water and sewer connections, reinforcing main structures, floors, roof repairs, changing
electrical installations, plumbing, etc. These loans are smaller, and have a shorter repayment period.
Managing unforeseen situations.
We know that unforeseen situations come up when you least expect them; you have to be prepared to cope
with and overcome them so they do not interfere with your commitment to Habitat.
Mortgage.
For example, when Habitat grants me a loan to build or remodel my home I turn my property over to them in
a legal document. This way my house and land become a guarantee for Habitat so that they may recover the
money it invested in my family should I not complete my payments.
Need for a house:
The family lives in substandard housing in accordance with their community and country, and they lack
the necessary resources to improve their living conditions on their own. In addition, the family does not
qualify for loans from banks or other commercial credit institutions.
Non-Profit Loan.
A loan that does not charge anything beyond the value of the loan plus the expenses involved in servicing it.
Non-profit organization: An organization that is not interested in benefiting financially from the loans it provides
its borrowing families. Habitat wants low-income families to be able to improve their living conditions.
Payment Capacity.
The family has sufficient family income to cover its basic needs (family expenses), current debts and the
future loan payments that would come about from the Habitat loan. The construction or remodeling are
in accordance with the family’s ability to pay.
�7 The Family Expense Notebook
Project feasibility:
In order for the building or remodeling to take place, the proposed site should be located in a risk-free
area, and it must be feasible for the project to take place at the time the family applies for the loan. Also,
the family must demonstrate legal ownership of the land on which the building or remodeling will take
place.
Repayment character and integrity.
The way that the family meets the commitments it has made to repay a loan is is something that must be
handled responsibly. Since Habitat promotes the active participation of the family through sweat equity
and mutual help, it is important that the family understands and analyzes how and why to participate
responsibly.
Responsibilities. We are referring to the commitment to make the payments, on time and for the amount
agreed upon with Habitat. That’s why the amount is part of the budget’s fixed expenses for the family, since
it cannot be used for anything else, changed or ignored. Remember that you cannot use this money for any
other purpose; the payment is mandatory. Think of it this way: the responsibility lies in being aware that
if you do not the payments, another family will be unable to build their own house, and you may lose
yours.
Revolving fund:
A fund consisting of money contributed by Habitat International. The revolving fund is sustained by the
punctual loan payments made by the borrowing families back to Habitat. This fund is used to grant more
loans and help improve the living conditions of more families.
Savings
Having savings means that you have money immediatly available, and which doesn’t lose value over time..
Willingness to pay.
This does not depend on the amount of income a family makes (be it a little or a lot) but rather on the
responsibility that each person or family assumes to comply with their payment obligations. For example,
Charlie paid off his debt at the store when he received his first pay check, despite the fact that he doesn’t
make much money at his temporary jobs.
�8
�9 The Family Expense Notebook
Notes
30
Notes
31 The Family Expense Notebook
This is our family’s commitment to manage our money and expenses:
Habitat for Humanity International Latin America and the Caribbean
www.habitat.orgTelephone: (506) �96 81�0Fax: (506) �91 7475 P.O. Box: 1513-1�00 Pavas San José Costa Rica
