Money Management: Making the Transition to Independence

Target Audience: Homeless Audience Profile
Tracking homelessness is no easy task. In fact it can be misleading to simply ask: how many people are homeless? Homelessness is often a temporary circumstance, not a permanent condition. In today’s economic situation, more people are in danger of losing their homes than ever before. Homelessness hits every ethnicity, every age and gender, and it can hit at varying stages in a person’s financial status and career. Many people are actually just a few paychecks short of becoming homeless. Research by the National Coalition for the Homeless indicates “two trends are largely responsible for the rise in homelessness over the past 20-25 years: a growing shortage of affordable rental housing and a simultaneous increase in poverty. Persons living in poverty are most at risk of becoming homeless, and demographic groups who are more likely to experience poverty are also more likely to experience homelessness.” Homelessness can occur because an individual doesn’t have family, friends or a social network on which to rely. Low-income jobs may be a contributing factor to homelessness. A lack of savings and low cash flow is a dangerous combination, especially when unexpected expenses such as medical bills or car repairs occur. Lack of health insurance may force some into debt and poverty. Natural disasters can leave people instantly homeless, with limited resources for rebuilding. Drug and alcohol addiction may be another contributing factor to homelessness. Individuals with an addiction may choose to spend their money fueling their addiction instead of spending their money on food, rent, and bills. Mental illness, when not treated appropriately and consistently, can also impact an individual’s ability to obtain and maintain stable housing. Clearly, people who become homeless do not fit one general description. However, people experiencing homelessness do have certain shared basic needs, including affordable housing, adequate incomes, and health care. Some homeless people may need additional services such as mental health or drug treatment in order to remain securely housed. All of these needs must be met to prevent and to end homelessness.

Program Overview
Most people are interested in learning how to manage money. However, many people may be embarrassed to admit that they don’t know the first thing about money management. It’s important to recognize that many homeless people may be living paycheck-to-paycheck or are dealing on a cash basis only. The key to this short program is to encourage participants to carefully manage what money they have regardless of the amount. This 60-minute program is designed to provide participants with a few of the basics of money management: identifying needs and wants, controlling spending, creating a savings habit, and tracking expenses.

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Facilitator’s 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 money management skills: Do you consistently choose needs over wants? Do you track your expenses? Do you pay yourself first? It’s important to know your own strengths and challenges! Remember how you felt before you learned the ins and outs of money management, and how you learned to manage your money. Consider that when it comes to talking about money, sharing your own successes 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 of What’s My Money Attitude? worksheet Copies of Needs vs. Wants worksheet Copies of Spending Diary worksheet Copies of Personal Spending Plan worksheet Copies of My Action Plan worksheet

How to Facilitate this Session
Welcome (5)  Introduce yourself and express your pleasure in sharing some basic tips for managing money. Have each participant introduce him/herself and share one concept/idea that he/she wants to take away from this session. List the take-aways on the flip chart or marker board. Share the program objectives and tie them back to the list of take-aways. • Recognize our money attitudes • Consider needs and wants, and choices that must be made • Understand our spending habits • Commit to an action plan

Money Attitudes (10) Explain to participants that before they can consider tackling money management skills, it’s helpful to understand their own attitude about money. ?Ask participants to define personal values. [For the most part, personal values are those things that are most important to you, those things that must be true for you to lead a happy and fulfilled life. Your values are also those things that really motivate you.]

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Distribute What’s My Money Attitude? worksheets. Review the directions. Emphasize participants should go with their first thoughts and that there are no right or wrong answers. Allow 6-7 minutes for participants to complete their worksheets. When time is up, ask for volunteers to complete the sentences as you read each
one. Remind participants that there are no right or wrong answers. Suggest that managing money depends on knowing how you view money and what you value in life.

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Needs and Wants (15) Stress to participants that we all have a limited amount of money, regardless of the amounts. We all have to make decisions about what we should buy now, what we should wait to buy, and what we can actually do without. ?Ask participants to explain the difference between needs and wants. [Needs are things that are essential for us to have such as food and shelter and wants can be thought of as “extras.”]    Distribute the Needs vs. Wants worksheets. Review the directions. Have participants complete Step 1. Allow 5-6 minutes for participants to list their needs and wants. Review steps 2-4. Answer any questions. Have participants complete Steps 2-4. Allow 6-7 minutes for participants to complete the process. ?Ask participants if anyone was surprised by what they might be able to do without after taking a closer look.  Remind participants that managing money means making choices. There is never enough money for all of the things we want. Sometimes, there is not enough money for the things we need, unless we’ve planned for an emergency.

Spending Habits (10) 4. Suggest that creating a savings habit is challenging but not impossible. The first step to establishing a savings habit is examining your spending habits. ?Ask participants to identify themselves as either spenders or savers by raising their hands when you ask the question, “How many of who are savers? How many of you are spenders?”  Suggest that most people are a little of both, depending on their moods. The good news is that we can develop smart money management skills
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and learn to put money aside for things we want to buy, without going into debt.  Teach participants it’s important to get a handle on their spending habits. Many people simply do not have a sense of where their money goes—it just seems to vanish—and they are surprised when the end of the month comes and they have run out of money. ?Ask participants whether they would feel less stress if they knew where their money went every month, or if that knowledge would cause more stress. [Financial experts suggest that knowing your spending habits is the first step to correcting bad habits and to being less stressed.]  Distribute the Spending Diary worksheet. Explain that this one tool that may help participants discover where their money goes. Review the directions and provide examples of how you would complete the worksheet. Answer any questions. Encourage participants to complete the worksheet during the upcoming week. ?Ask participants to take a moment to think about one action they could take to cut back on their spending and start saving. [Be prepared to share one or two actions that you have considered. For example, borrowing books from the library instead of buying them. Or purchasing a personal water bottle and refilling it with tap water instead of buying bottled water.]  Remind participants that while it may not seem as though making small changes in the way they spend will result in a “chunk of change” to put away, it all adds up! For example, if you drop just 40 cents in change into a jar each day, at the end of the year, you’ll have saved $146.00. Emphasize that the actual amount of money saved is not as important as creating the savings habit. Explain that the most important step in managing money is to create a spending plan. If you don’t know how much is coming in and how much is going out each month, it’s difficult to manage your money, and it’s almost impossible to create a savings habit! Suggest that completing the Spending Diary will help participants get a sense of where money is going. However, it is only useful if they actually write everything down! Remind them that it’s only a start and it’s only for one week. Explain that tracking expenses for a whole month is the next step. ?Ask participants if they have ever created a budget. Admit that most people hate the word “budget” because it seems so constraining. Encourage participants to reframe the boring budget into a spending plan. A spending plan allows you to track: where your money is coming from
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 Next Steps (10)

(income), what you need to spend money on (expenses) and what you can afford to spend on things you want.  Distribute the Personal Spending Plan worksheets. Review each line item and offer additional information to clarify the categories. Check for understanding by asking for examples. Answer any questions. ?Ask participants what they could do if they discover that they are spending too much money every month. [If they are spending too much on wants, they need to make some choices. They need to give something up!] ?Ask participants what they can do if they discover that the amount of money coming in is less than the amount of money going out. [Look for responses similar to those listed here:] • Increase income (part time job, turn hobby into business, check whether financial assistance is being used) • Cut expenses (eat out less, avoid vending machines, walk vs. drive, etc.) • Increase income and cut expenses  Tell participants that a spending plan is like a financial blueprint. It helps you set the foundation for safety, security and stability. By identifying sources of income and determining necessary expenses, they can discover how to live within their income. Stress the importance of making a personal commitment to actually completing the Personal Spending Plan worksheet. Remind participants to track everything they actually spend versus what they budgeted, and look carefully at those differences. If they spent less, that’s great. If they spent more, what will they do differently next month? Review the list of take-aways and note which ones were addressed and which ones will need to be addressed at a later time.  Review the topics covered in the session:  Money attitudes  Needs and wants  Spending habits  Spending plans Remind participants to complete their Spending Diary for a full week.

Wrap (5)

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Encourage participants to make the commitment and follow through with their Personal Spending Plan worksheets. Distribute My Action Plan worksheets. Encourage participants to take a few minutes to complete their worksheets to ensure that they get started transitioning to independence immediately. Thank participants for their attendance and let them know what a pleasure it’s been to spend an hour with them. Provide them with any additional information as agreed upon with the agency.

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What’s My Money Attitude?
Take a few minutes to complete each statement below. Go with your first thought. There are no right or wrong answers.

Money is __________________________________________________ _________________________________________________________ If I had $100, I would________________________________________ _________________________________________________________ I think people with lots of money ________________________________ _________________________________________________________ I think people who don’t have much money _________________________ _________________________________________________________ When I get older, I want to have_________________________________ _________________________________________________________ When I have money, I ________________________________________ _________________________________________________________ When I don't have money, I ____________________________________ _________________________________________________________ When I need or want money, I __________________________________ _________________________________________________________

Project Independence - Homeless

Money Management

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