Common Cents

We all have times when we need more resources to make informed decisions- some more “common cents,” so to speak. To help you navigate this side of life, we’ve created a financial literacy road-map. Click on the headings below to reveal relevant information about managing your money.

Importance of Financial Literacy
Basic Money Management
Your First Bank Account
What is Credit?
Lifestyle and Loans Tips
Children and Family Consideration
Additional Tips and Resources

 

Importance of Financial Literacy

What is financial literacy and why is it important? Financial literacy is the knowledge of credit and debt management that allow you to make fiscally responsible decisions. This ranges from understanding how a checking account works to how to understand your credit score.

Without this knowledge, you are likely to get into financial trouble. Whether debt, low credit scores, or constantly feeling low on funding, there are a number of poor side effects from not understanding financial literacy. Banks and lenders make it far too easy to accumulate debt fast, and if you don’t understand how it happens, you’ll be in trouble.

Tasked with the responsibility of clothing and feeding family, paying bills, keeping the car fueled and running, and paying for an education, you may feel overwhelmed. You are not alone. The following sections will provide an overview of money management skills and provide numerous opportunities for further learning. Take the time to explore, ask, and understand- you financial future depends on it.

To learn more about financial literacy’s importance, check out this article.

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Basic Money Management

Here to give you an overview of money management is a brief webinar by Jack and Rachel of the Student Success Services team, available for viewing here:

As you learned in the video, knowing how to handle money responsibly is only one side of the coin; it is also vital to know how to track it. See the supplementary resources below for tools:

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Your First Bank Account

Is it time to take the leap and open your first bank account? Before you run to your nearest bank or credit union, it’s important to do some research. A little bit of knowledge beforehand could save you a lot of money down the road.

Watch this brief video by Howcast to talk you through the basics of opening and managing your first account:

Now that you know the basics, let’s explore the different types of accounts. The type that you open should depend on your deposit amount, and long-term goals. Start by asking yourself these questions:

  • On average, how much money will I be able to keep in the account each month?
  • Will I need to write checks each month and if so, about how many?
  • Do I want to go to the bank to deposit checks and withdraw cash or is it better to use ATMs and/or online banking?
  • Will I pay most of my bills using online banking?
  • Will I use a debit card for purchases?

Once you have those answers in mind, carefully consider which account type suits your needs:

  • Checking: A basic checking account is ideal for anyone who may not be able to keep a consistently high dollar amount in the account. Most banks will charge a small monthly fee, but at certain banks the fee is waived if you use automatic deposit from your paycheck or if you keep a minimum balance in the account (amount varies by bank).

Many banks offer deals on student checking accounts. If you are a currently-enrolled student, this is worth asking about as it may mean certain fees are waived or other incentives are available.

  • Interest-bearing: These accounts are often used for long-term saving, as the money in it will grow marginally based on the interest rate. Such an account will almost certainly have a monthly fee if the balance minimum is not met; often $1,000 or so. Another type of interest-bearing account is called Money Market wherein the bank invests a portion of your amount and often yields a higher interest rate. Similar to other accounts in this category, you will be dinged with a fee if the minimum balance is not met, so only open these accounts after you know you can maintain the minimum requirements.
  • Overdraft Protection: When opening an account, you may be offered overdraft protection. While it sounds like a no-brainer to protect again writing a check that will bounce, be wary. If you do not have a second account to draw from (such a savings account that will automatically cover any additional if an overdraft occurs in the checking account), inquire about the interest that will accrue on the overdraft if you borrow from the bank.

When in doubt, ask questions. Ask questions at the bank, ask someone that you trust, and ask reliable sources on the internet. You will be far better off if you do your research on the front end.

Additional information on bank accounts can be found in Book 3 of our Developing Your Vision booklet available for download or online viewing here.

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What is Credit?

We all know that good credit is important, but what exactly is it and how do we achieve it? In short, credit is your reputation as a borrower (The Balance). Your credit score, then, is determined by your borrowing history. This history is compiled in a credit report, which is available for viewing by any lender (such as a bank) and includes information about how much you’ve borrowed, how much your repaid, and how timely those repayments have been.

Each year, you are allowed to view your own credit report for free. Free credit reports can be accessed through the websites listed here.

Note that if there are errors in your credit reports, they need to be fixed or you could face rejection for loans in the future.

The credit score itself is determined through a careful study of the patterns, any red flags, and other characteristics in your borrowing history.

If you’re feeling full of information but low on credit, watch this video from our friends at Bank of America about building credit from scratch:

If you already have a long history of credit but it’s less than ideal, watch this brief video from CreditRepair.org to gather tips for improving it:

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Lifestyle and Loans Tips

For this section we searched high and low for Native-centric advice and wisdom and believe that Dr. Per Cap from the First Nations Development Institute is among the best out there.

Take a few moments to read through Dr. Per Cap’s advice on avoiding payday loans, understanding enticing credit card offers, and much more.

National Debt Relief has created an entertaining and informative video about establishing a frugal lifestyle. If you follow even some of these suggestions, you are bound to make a dent in your debt.

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Children and Family Considerations

Here we focus on specific financial circumstances that come with childcare, raising special needs children, and caring for aging parents or other family members. Many of these will include links, and we hope that you will take the time to explore the beneficial information they offer.

Childcare

For budgeting purposes, it is necessary to include childcare costs as part of your monthly expenses. However, it is worth the effort to consult with your employer to see if your employee benefits package includes child care assistance, such as a flexible spending account (FSA).

Other ways to reduce childcare expenses include a work exchange with the childcare provider for a reduced cost. Although it is not always possible, alternating work hours with a partner or family member that allows at least one of you to care for the child is often significantly cheaper than paying for childcare full-time.

Child-care swaps, telecommuting, government-funded programs, and planning ahead may also help reduce costs. Explore these tips from Care.com, US News, and the Single Mother’s Guide to find other ideas.

When Your Child Has Special Needs

The term “special needs” encompasses a wide variety of physical and neurological conditions. As a parent or caretaker of a child with special needs, you will face challenges unique to other families.

While this page is dedicated to the aim of financial literacy, it is nonetheless worthy of noting the importance of a trusted support system. When navigating the medical realm, the school system, social workers, and a myriad of other involved parties, it is vital to build a supportive community in order to provide the best possible care to your special needs child.

Each tribe and state have different support services and programs for which your family may be eligible; check with your tribe and your local Department of Social Services or Office for Children for more information. In addition, there may be community agencies or groups that provide education and counseling opportunities for you and your family.

Oftentimes children with special needs require expert medical care which is not cheap. In addition to applying for Medicaid, consider this sampling of other online resources for support and financial assistance:

Information in this section is adapted from 360 Degrees of Financial Literacy, find more information here.

Caring For Your Aging Parents

While many of us will assume the role of caretaker for other family members at some point, there is rarely a warning or clear understanding for the responsibility that it requires.

As mentioned in the previous section, it is vital to cultivate a support system to assist you during this time.

Finding support services may prove beneficial in the following ways:

  • Providing training
  • Adult day care opportunities
  • Help for choosing a nursing or assisted living home
  • Free or low-cost legal advice

Start by contacting your tribal offices for any local programs or support groups. You can also call the Eldercare Locator number (800-677-1116), which is a federally-funded service that can provide information and referral services to help in your area.  Other resources include:

Information in this section is adapted from 360 Degrees of Financial Literacy, find more information here.

Additional Tips and Resources

Hyperlink to https://www.thebalance.com/what-is-credit-315391

http://www.360financialliteracy.org/Topics/Family-Financial-Planning/Special-Needs-Children

http://www.360financialliteracy.org/Topics/Family-Financial-Planning/Caring-for-Aging-Parents

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