YOUR MONEY, YOUR GOALS

A financial empowerment 

toolkit for community 

volunteers

Consumer Financial

Protection Bureau April 2015

YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS I

Table of contents

INTRODUCTION PART 1: Volunteers and financial empowerment ....................... 1

What is financial empowerment? ...................................................................... 1

The CFPB............................................................................................................3

Financial empowerment can build financial stability.......................................3

Making referrals.................................................................................................4

Using the toolkit.................................................................................................6

“But I only volunteer a few hours a week...”......................................................7

Tool 1: Top money conversations .....................................................................9

Tool 2: Financial empowerment checklist...................................................... 11

Tool 3: Financial empowerment self-assessment for volunteers................... 15

INTRODUCTION PART 2: Understanding the situation ...................................... 25

Tool 1: My money picture................................................................................27

INTRODUCTION PART 3: Starting the money conversation .............................. 35

How should I bring up money topics?............................................................ 36

Discussing difficulties or problems ................................................................ 40

INTRODUCTION PART 4: Emotions, values, and culture: What’s 

behind our money choices?.................................................................................. 43

Emotional influences on financial decisions .................................................. 43

Understanding personal values around money ............................................. 44

Cultural influences on financial decisions.......................................................45

Use questions to understand what’s behind decisions ...................................47

Keeping personal values in check................................................................... 48
ii YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS

MODULE 1: Setting goals and planning for large purchases..................................... 51

Life events and large purchases....................................................................... 51

Setting SMART goals .......................................................................................53

Building a plan .................................................................................................55

Turning goals into financial targets.................................................................56

What about revising goals?............................................................................. 58

Tool 1: Goal-setting tool..................................................................................61

Tool 2: Planning for life events and large purchases .....................................65

Tool 3: Buying a car........................................................................................ 69

MODULE 2: Saving for emergencies, goals, and bills ............................................... 73

Emergency savings...........................................................................................73

Getting started .................................................................................................75

Making savings automatic ...............................................................................76

Savings and public benefits .............................................................................77

A safe place to save...........................................................................................77

Your banking history report ............................................................................78

Savings plan .................................................................................................... 80

Saving for education ....................................................................................... 85

Tool 1: Savings plan.........................................................................................87

Tool 2: Benefits and asset limits .................................................................... 93

Tool 3: Finding a safe place for savings......................................................... 99

MODULE 3: Tracking and managing income and benefits ...................................... 103

Income............................................................................................................103

Deductions from your pay .............................................................................104

Wage garnishments........................................................................................105

Benefits...........................................................................................................107
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS III

Getting income...............................................................................................109

Tool 1: Income and resource tracker .............................................................111

Tool 2: Ways to increase income and resources........................................... 115

Tool 3: Choosing how to receive income and benefits ................................. 119

Tool 4: Increasing your income through tax credits .................................... 125

MODULE 4: Paying bills and other expenses .......................................................... 129

Where does the money go? ............................................................................129

Planning and paying bills...............................................................................130

Unexpected expenses ..................................................................................... 131

When cash is short......................................................................................... 132

When creditors call ........................................................................................134

Tool 1: Spending tracker ............................................................................... 137

Tool 2: Bill calendar ......................................................................................143

Tool 3: Choosing ways to pay bills ................................................................ 147

Tool 4: Strategies for cutting expenses......................................................... 151

Tool 5: When cash is short—prioritizing bills and planning spending........ 157

MODULE 5: Getting through the month ................................................................... 161

Making a cash flow budget.............................................................................162

Tool 1: Cash flow budget ...............................................................................163

Tool 2: Cash flow calendar............................................................................ 173

Tool 3: Improving cash flow checklist.......................................................... 175

MODULE 6: Dealing with debt ................................................................................. 181

What is debt?.................................................................................................. 181

Good debt, bad debt? ..................................................................................... 181

Secured and unsecured debt..........................................................................182
iv YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS

How much debt is too much? ........................................................................184

Payday loans and deposit advance products .................................................185

Avoiding debt traps........................................................................................188

Dealing with a debt collector .........................................................................190

Alternatives to high-cost credit......................................................................193

Medical debt...................................................................................................193

Tool 1: Debt worksheet.................................................................................. 197

Tool 2: Debt-to-income worksheet...............................................................199

Tool 3: Debt-reduction worksheet............................................................... 203

Tool 4: Student loan debt............................................................................. 207

Tool 5: When debt collectors call.................................................................. 211

MODULE 7: Understanding credit reports and scores ............................................. 219

Why do credit reports and scores matter? ....................................................219

What is in a credit report? ............................................................................ 220

Example credit report................................................................................... 223

Disputing errors on credit reports.................................................................231

What are credit scores?..................................................................................231

Tool 1: Getting your credit reports and scores .............................................237

Tool 2: Credit report review checklist.......................................................... 243

Tool 3: Improving credit reports and scores ................................................251

MODULE 8: Money services, cards, accounts, and loans: Finding what 

works for you ...................................................................................................... 257

Finding and choosing financial products and services .................................257

Managing a bank or credit union account.................................................... 258

Garnishment from your bank or credit union account.................................261

Tool 1: Know your options: Understanding what you need........................ 263
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS V

Tool 2: Ask questions: Choosing where to get what you need .....................267

Tool 3: Money services and banking basics.................................................. 271

Tool 4: Opening an account checklist...........................................................277

Tool 5: Remittances ..................................................................................... 283

MODULE 9: Protecting your money ......................................................................... 287

Have an issue with a product or service? ..................................................... 287

Submitting a complaint to the CFPB............................................................ 288

It’s your money— take care........................................................................... 289

Take care of your information ...................................................................... 290

Tool 1: Red flags ........................................................................................... 293

Tool 2: Protecting your identity................................................................... 295

Tool 3: Submitting a complaint to the CFPB................................................301

Tool 4: Learning more about consumer protection .................................... 305

YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 1

INTRODUCTION PART 1:

Volunteers and financial 

empowerment

Welcome to the Consumer Financial Protection 

Bureau’s Your Money Your Goals: A financial 

empowerment toolkit for community 

volunteers! 

If you’re reading this, you are probably a community 

volunteer, or you work in an organization that 

engages volunteers to help serve its community. 

Across the United States, volunteers like you are 

providing financial or career coaching, mentoring 

youth aging out of foster care, offering lay counseling 

in a faith-based organization, or welcoming people at 

a food bank or Volunteer Income Tax Assistance site.

Many people feel overwhelmed by their financial situations, and they often don’t know where to 

go for help. Volunteers are often in a unique position to provide that help. The people your 

organization serves already know you and trust you – and in many cases, they’re already sharing 

financial and other personal information with staff or with you. 

What is financial empowerment?

How is “financial empowerment” different from financial education or financial literacy? 

Financial education is a strategy that provides people with financial knowledge, skills, and 

resources so they can get, manage, and use their money to achieve their goals. Financial 

education builds an individual’s knowledge, skills, and capacity to use resources and tools, 

including financial products and services. Financial education leads to financial literacy. 

Financial empowerment 

Empowerment is the process of 

increasing people’s capacity to make 

choices and transform those choices 

into actions and desired results, 

according to the World Bank. 

Financial empowerment is building 

the knowledge and ability of 

individuals to manage money and use 

financial services products that work 

for them.

3
2 INTRODUCTION PART 1: VOLUNTEERS AND FINANCIAL EMPOWERMENT

Financial empowerment includes financial education 

and financial literacy, but it focuses both on building 

people’s ability to manage money and use financial 

services and on providing access to products that 

work for them. 

Financially empowered individuals are both

informed and skilled. They know where to get help 

with their financial challenges and can access and 

choose financial products and services that meet 

their needs. This sense of empowerment can build 

confidence that they can effectively use their financial 

knowledge, skills, and resources to reach their goals.

If you feel knowledgeable about money and 

comfortable in your own approach to money management, credit, debt, and financial products, 

you can better help people face money issues that may be complicating their lives. As you work 

through each module of this toolkit, you’ll learn the information and how the tools work. As you 

try out the tools, you may find ways to use your own money to reach your goals more efficiently 

and effectively.

We designed Your Money, Your Goals to help you help the people you serve become financially 

empowered. Because it’s a toolkit, it is different from a financial education curriculum. A

curriculum generally has a specific set of goals, and you usually work through most or all of the 

material in the order it’s presented. 

This toolkit is a collection of important financial empowerment information and tools you can 

choose based on the current needs and goals of the people you serve. In other words, the aim 

isn’t for you to cover all of the information and tools in the toolkit. Instead, the aim is to help 

you identify and share the specific information and tools that are best suited to help people get 

started on reaching their goals and solving their financial challenges. And, when they want or 

need additional help, the toolkit’s aim is to help you refer them for financial counseling or 

coaching.

Community volunteer

In this toolkit, the term “community 

volunteer” is used to refer to anyone 

who volunteers with a community- or 

faith-based organization that serves 

low-income or economically 

vulnerable community members. 

Your Money, Your Goals will be 

especially useful for volunteers that 

coach, counsel, mentor, or work 

directly with economically vulnerable 

individuals and families.

3
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 3

The CFPB

CFPB is the abbreviation for the Consumer Financial Protection Bureau. The CFPB works on 

behalf of consumers to make consumer financial products and services work for them – whether 

they are applying for a mortgage, choosing among credit cards, asking for their credit reports, or 

using those or any number of other consumer financial products and services, including bank 

accounts, prepaid cards, payday loans, and student loans. 

This means ensuring that consumers get the information they need to make the financial 

decisions they believe are best for themselves and their families—that prices are clear up front, 

that risks are visible, and that no important information is buried in fine print.

The CFPB’s Office of Financial Empowerment developed this toolkit, because volunteers like 

you meet with thousands of people that need high quality, unbiased financial information and 

tools to help them better address financial issues. As you use this toolkit and other resources at 

www.consumerfinance.gov, you can help the people you serve become more financially 

empowered, reduce their financial stress, and manage their finances in ways that achieve their 

goals and dreams.

Financial empowerment can build financial 

stability

Sharing financial empowerment information and tools may feel different from the work you 

normally do as a volunteer. But, once you learn the contents of this toolkit, we believe it can 

become natural to integrate its information and tools into your volunteer work. 

As a community volunteer, one of your responsibilities may be getting a sense of each person’s

unique needs. If that’s the case, the toolkit starts with an assessment that can help you 

understand people’s goals and the financial situations they may be facing.

The Your Money, Your Goals toolkit brings together information, tools, and links to other 

resources you can use to help people begin to build skills in managing money, credit, debt, and 

financial products. Having all these resources in one place can make it easier for you to bring 

financial empowerment into your conversations with them.
4 INTRODUCTION PART 1: VOLUNTEERS AND FINANCIAL EMPOWERMENT

The information and tools in the Your Money, Your Goals toolkit can help improve individuals’ 

and families’ financial stability by giving them a new understanding of financial concepts and 

financial tools they can apply to their own goals.

Depending on your volunteer role and the needs of the people you serve, you may be able to help 

them take the first steps to:

§ Set goals and calculate how much money they need to save to reach these goals

§ Save money

§ Establish an emergency savings fund

§ Access and use tax refunds

§ Track the specific ways they are using their money

§ Bring their cash flow budgets into balance

§ Make a simple plan to pay down debt

§ Get and review their credit reports

§ Fix errors on their credit reports

§ Evaluate financial products and services

§ Recognize when their consumer rights may have been violated and know how to take 

action

Making referrals

You can make a big difference in people’s lives by introducing them to financial empowerment 

and providing them with some basic information and tools to help them solve specific financial 

challenges. 

The people you serve may look to you or to others in your organization for quality information 

and referrals on topics like these:

§ “My credit report has information that’s not accurate. How can I fix it?” 
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 5

§ “How can I know if the student loan I can get

at the bank is better than one I can get at 

school?”

§ “Should I borrow money from my credit card 

or take out a small loan to cover my bills until 

my next paycheck?”

§ “My employer says I have to have direct 

deposit. Everywhere I go, the banks and 

credit unions seem to charge fees. How can I 

find the right account for me?”

But some people may need more help than you are 

equipped to provide or that is not available within 

your organization. This is where knowing how to use 

your organization’s resource and referral network 

will be important. 

Your organization may be able to provide you with a 

list of websites and local organizations you may find 

helpful. Referral partners in your community may include certified non-profit credit counselors, 

certified housing counselors, financial counselors and coaches, free volunteer tax assistance sites 

sponsored by the IRS, and financial education programs. These referral partners are often found 

at non-profit agencies.

It is important that these individuals and organizations don’t try to sell products 

or services to people when they are seeking financial empowerment assistance.

Otherwise, there could be a conflict of interest—when the organization’s interests interfere with 

providing unbiased information and advice to clients. Partner organizations should objectively 

show workers the upside and the downside of specific actions they take and the impact these 

actions have on their financial situations.

Referral partners 

Only refer people to organizations 

that:

§ Have expertise in the area for 

which you are referring people to 

them

§ Have the time and interest to 

meet with and assist them

§ Are objective, which means they 

can show them the potential 

positive and negative 

consequences of specific actions

§ Will not sell products or services 

in the context of helping them

3
6 INTRODUCTION PART 1: VOLUNTEERS AND FINANCIAL EMPOWERMENT

If your organization doesn’t have a local referral 

guide for these services, you can use CFPB’s Creating 

a referral guide to help you get started.1

Using the toolkit

The goal of the Your Money, Your Goals toolkit is to 

make it easier for volunteers, lay counselors and 

workers, mentors, and coaches to help the people 

they serve become more financially empowered.

The toolkit is divided into two parts:

§ The four-part Introduction is for you.

This information can help you prepare to use 

the toolkit.

§ Modules 1 through 9 include information on specific topics and tools people 

can use to put that information to work. Think of each module as a specific set of 

tools you can use depending on the situation. 

That’s why you don’t need to start with Module 1 and work all the way through the toolkit. For 

example, you may be helping a person who has just lost her job. Starting with Setting goals

would likely not be useful to her. But if she doesn’t have enough cash to cover basic living 

expenses, tips for managing cash flow and identifying new resources could be useful at this 

particular time.

You may be helping a person who wants to get out of debt. In this situation, it may be useful in 

the long run to talk with him about cash flow, but it may be better to start by helping him begin 

to build a plan to pay down debt. 

Your work may not allow you to meet with a person very often – you may even meet with them 

just once. This toolkit can help you identify ways to start a conversation that opens the door for 

 

1 See www.consumerfinance.gov/your-money-your-goals. 

2 See http://files.consumerfinance.gov/f/201407_cfpb_your-money-your-goals_implementation-guide.pdf for 

Giving people tools

Giving people tools to take home to 

work on can be helpful. At home, they 

may have access to accurate 

information to complete the tools.

But don’t send too many tools home 

with someone at once. Be sure to

identify the topic and tools that will 

make the biggest difference at that 

specific time. You can always let them 

know how they can access other tools 

when they are ready.

3
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 7

you to make referrals to others in your community who may provide services like free tax 

preparation, financial education, counseling, or coaching.2

To make the best use of the toolkit we advise giving people one or two tools at a time. Getting all 

the tools at once – or even five tools at one time – is likely to be overwhelming for most people. 

A better approach is to identify one topic and the specific tools that will make the biggest 

difference for them at that time.

If you are planning to send tools home with someone, limit it to one or two that you have shown 

them how to use. If you give them too many tools at once, they may feel overwhelmed and not 

use any of them.

“But I only volunteer a few hours a week...”

One way to think about financial empowerment work is that it’s not a service you “add-on.” 

Instead, it’s something you can integrate into the work you’re already doing as a volunteer. 

This doesn’t mean that it doesn’t require time on your part. While it requires time, that time will 

be front-loaded. In order to bring financial empowerment into what you do as a volunteer, you’ll

have to spend time:

§ Learning the toolkit content

§ Becoming comfortable with the topics and the tools in the toolkit

§ Thinking about ways to introduce financial empowerment into your work

§ Potentially capturing the outcomes of financial empowerment for your organization

 

2 See http://files.consumerfinance.gov/f/201407_cfpb_your-money-your-goals_implementation-guide.pdf for 

additional tips on identifying information to share based on your level of contact.
8 INTRODUCTION PART 1: VOLUNTEERS AND FINANCIAL EMPOWERMENT

Integration

Integration of financial empowerment means identifying where and how you can weave 

financial empowerment information and tools into the work you are already doing. 

Why is integration of financial empowerment such a promising strategy?3

§ It builds on established relationships you may have with individuals you serve. 

§ People are busy—there is efficiency in addressing many issues in one stop.

§ Financial and economic issues cut across situations and challenges. Adding financial 

empowerment to the other areas your volunteer work focuses on may present a 

more holistic approach to working with the people you serve.

§ It provides opportunities for reinforcement during “natural” discussions.

§ It is potentially more likely to reach hard to reach populations with unbiased 

financial empowerment information and tools.

This introductory section provides you with three tools to get you started. Tool 1: Top money 

conversations gives you talking points based on common money issues. This tool also gives 

you some guidance on where this information can be found in the toolkit.

Tool 2: Financial empowerment checklist provides you with a tracking template for 

recording which tools or information you have shared with a particular individual.

Tool 3: Financial empowerment self-assessment can help you develop an understanding 

of your own financial knowledge, skill, and confidence. As you will see in the answer keys, the 

questions asked in this assessment are directly related to modules in Your Money, Your Goals.

 

3 Giuffrida, Inger, Integrating Financial Education into the Work that You Do, April 2010.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 9

Tool 1:

Top money conversations

Your Money, Your Goals covers a wide range of topics. These “top money conversations” cover 

some of the most important financial issues the people you serve may be facing. 

Top Money Conversations

Do you have goals for yourself and your family? Are they goals you want to reach soon or in

the next few years? How do you plan to reach them? 

See Module 1: Setting goals and planning for large purchases. Use Tool 1: Goal-setting 

tool to help the person:

§ Brainstorm a list of hopes, needs, wants, and dreams and determine whether they are shortterm or long-term. 

§ Turn those hopes, needs, wants, and dreams into SMART goals.

§ If the goal requires saving or setting money aside to pay down debt, figure out how much to 

save each week (or month) to reach the goal. 

§ Identify the first steps the person can take to get started, and when they’ll be completed. 

How do you handle unexpected expenses? Saving money now for unexpected expenses and 

emergencies can save you money later.

See Module 2: Saving for emergencies, goals, and bills. Use Tool 1: Savings plan to help 

someone make a plan to save money for goals, expected and unexpected expenses, and 

emergencies.

It sounds like you’re having trouble coming up with the money for certain bills. Sometimes 

that’s because the timing of your income doesn’t match the timing of the bills. Would you like 

to take a look at a tool that can help you look at your “money-in” and “money-out” to try to 

get the timing to work better?

See Module 5: Getting through the month. Use either Tool 1: Cash flow budget or Tool 2: Cash 

flow calendar to help someone find ways to better match the timing of income and expenses so that 

he or she doesn’t come up short. If they’re interested in ways to cut spending, use the tools in 

Module 4: Paying bills and other expenses.
10 INTRODUCTION PART 1: VOLUNTEERS AND FINANCIAL EMPOWERMENT

 TOOL 1: TOP MONEY CONVERSATIONS

Do you feel like you have too much debt? Did you know that there are rules debt collectors 

have to follow when they contact you?

See Module 6: Dealing with debt. Use Tool 1: Debt worksheet to help someone account for of his 

or her debt. This is an important first step toward managing and reducing debt. Tool 5: When debt 

collectors call includes information on the process and sample letters people can use to 

correspond with debt collectors.

Your credit history doesn’t just determine whether you get a loan. It can also affect how 

much you pay for deposits on your cell phone and utilities, how much insurance costs, and 

even whether you can get the job you want. I’ve got some tools you can use if you’re 

interested in getting your free credit report and checking to make sure it’s accurate. 

See Module 7: Understanding credit reports and scores. Use Tool 1: Getting your credit 

reports and scores, along with Tool 2: Credit report review checklist, to help someone identify 

mistakes on his or her credit report.

It sounds like you’re having trouble getting an answer from the company about those extra 

charges on your account. You can submit a complaint to the CFPB and they’ll forward it to 

the company and work to get a response for you.

If someone has a complaint about a financial product or service (bank accounts or services, credit 

cards or prepaid cards, mortgages, student loans, vehicle loans or leases, payday loans, consumer 

loans, debt collection, credit reporting, money transfers or virtual currency) see Module 9: 

Protecting your money for information on submitting a complaint to the CFPB. Tool 3 includes 

step-by-step instructions on submitting an effective complaint.

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 11

Tool 2:

Financial empowerment 

checklist

This financial empowerment checklist can help you identify the financial empowerment 

information and tools to share with the people you are helping. It can also help you keep track of

the information you have shared, including any referrals you have made for them. 

The checklist is organized by financial empowerment topic or module, followed by each tool 

associated with it. The question(s) following each module name can help you identify the 

financial empowerment problem addressed in the module and through the tools.

Remember, even if you meet with someone regularly, you won’t cover all of the tools with them. 

Instead, find the right module or tools based on the person’s most pressing financial challenge

or the topic they’re most interested in.

To use the checklist:

§ Print a copy of the checklist for each person you are working with.

§ When you have covered the topic or tool, put a check next to the tool or write in the date. 

§ Use the notes section if you are working with someone on an ongoing basis. Include 

information about your discussions, specific challenges, and whether you made a 

referral.

§ If you use the tool to track discussions with an individual, be sure to follow your 

organization’s rules regarding privacy and document storage.

Financial Empowerment Checklist

Name: ____________________________________________

or Tool Notes and referral information

8
12 INTRODUCTION PART 1: VOLUNTEERS AND FINANCIAL EMPOWERMENT

 TOOL 2: FINANCIAL EMPOWERMENT CHECKLIST

date

Module 1: Setting goals and planning for large purchases—Does the person have clear goals? Is the 

person satisfied with his or her financial situation?

Goal-setting tool

Planning for life events and 

large purchases

Buying a car

Module 2: Saving for emergencies, goals, and bills—Does the person have money set aside for 

emergencies or unexpected expenses?

Savings plan

Benefits and asset limits

Finding a safe place for 

savings

Module 3: Tracking and managing income and benefits— Does he or she track his/her income and 

know the options for receiving pay and benefits?

Income and resource 

tracker

Ways to increase income 

and resources

Choosing how to receive 

income and benefits

Increasing your income 

through tax credits

Module 4: Paying bills and other expenses—Does he or she pay her bills on time each month? Does 

the person understand the financial products they use to pay bills and spend money?

Spending tracker

Bill calendar

Choosing ways to pay bills
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 13

Strategies for cutting 

expenses

When cash is short: 

prioritizing bills and 

planning spending

Module 5: Getting through the month—Is the person able to make ends meet each month? Does the 

timing of income match the timing of bills and expenses? 

Cash flow budget

Cash flow calendar 

Improving cash flow 

checklist

Module 6: Dealing with debt—Is the person able to manage his debts? Is he being contacted by debt 

collectors?

Debt worksheet

Debt-to-income worksheet

Debt reduction strategies 

Student loan debt

When debt collectors call

Module 7: Understanding credit reports and scores—Has the person ever requested and reviewed 

his or her credit report?

Getting your credit reports 

and scores

Credit report review 

checklist

Improving credit reports 

and scores

Module 8: Money services, cards, accounts, and loans: Finding what works for you —Has an 

employer told the person that the company requires direct deposit? Is the person interested in finding 

lower cost financial products or services to help manage income and expenses?
14 INTRODUCTION PART 1: VOLUNTEERS AND FINANCIAL EMPOWERMENT

 TOOL 2: FINANCIAL EMPOWERMENT CHECKLIST

Know your options: 

Understanding what you 

need

Ask questions: Choosing 

where to get what you 

need

Money services and 

banking basics

Opening an account 

checklist

Remittances 

Module 9: Protecting your money— Has he or she had issues with a financial product or service?

Does the person know about basic steps he can take to protect himself from scams, cons, fraud, and 

identity theft?

Red flags 

Protecting your identity 

Submitting a complaint to 

the CFPB

Learning about consumer 

protection

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 

This Tool may ask you to provide sensitive personal and financial information. The CFPB does not collect any information from you 

or the organization using this Tool. The CFPB is not responsible and has no control over how others may use the information that 

you provide to them about your personal or financial situation. The CFPB recommends that you do not include names or account 

numbers and that users follow their organization’s policies regarding retention, storage, and disposal of documents that contain 

personal information.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 15

Tool 3:

Financial empowerment

self-assessment for 

volunteers

Financial empowerment involves building the ability to use financial management knowledge, 

skills, and tools to access resources, products, and services to achieve their goals. 

Since financial empowerment covers a wide range of topics, it can be hard to know where to 

start. Identifying what you know and don’t know may be the best place to start. Using this 

approach, you may find that you know more than you think you do. You may also find some

areas where you could benefit from a little more information or know-how.

As a community volunteer who helps your organization serve individuals and families, it’s 

important for you to understand your own level of financial empowerment. 

Use this three-part self-assessment to develop an understanding of your financial knowledge, 

skill, and confidence. As you will see in the answer keys, the questions asked in this assessment 

are directly related to modules in Your Money, Your Goals.
16 INTRODUCTION PART 1: VOLUNTEERS AND FINANCIAL EMPOWERMENT

 TOOL 3: FINANCIAL EMPOWERMENT SELF-ASSESSMENT FOR VOLUNTEERS

Financial empowerment self-assessment: Part 1

Answer each of the following questions by checking either the “true” or “false” column.

True False

1. Goals are not important to financial planning or budgets.

2. To have enough money for emergencies you must save 3 to 6 months’ 

worth of living expenses. 

3. A cash flow budget helps you track whether you will have enough cash to 

cover your bills from week to week.

4. If you can’t pay all of your bills and collectors are calling, the “squeaky 

wheel” that calls you the most should be paid first. 

5. The only way to receive the income you’ve earned from working is by 

receiving a paycheck.

6. Credit is when you owe someone money.

7. The amount of your monthly debt payments may impact your ability to 

access new credit. 

8. A poor credit history may keep you from getting an apartment, and in some 

states, insurance or even a job. 

9. The only cost of having a checking account is the monthly service fee.

10. As a consumer, you have almost no rights when it comes to financial 

products.

Financial empowerment self-assessment: Part 1 results

Number correct: ________________ out of 10

Topics to Learn 

More About:

8

8
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 17

Financial empowerment self-assessment: Part 2

Use check marks to show which word or phrase (rating) best describes how you feel today.

Statement Rating

Does 

not 

apply

Strongly 

disagree

DisagreeAgree Strongly 

agree

1. I have money set aside for 

emergencies and goals.

2. I know how to claim state and 

federal tax credits.

3. I am not worried about how 

much money I owe.

4. I am confident about the 

information on my credit 

reports and my scores.

5. I don’t worry about being able 

to pay my bills and expenses.

6. I understand how credit works.

7. I know how to get incorrect 

items on my credit report fixed.

8. I feel confident about helping 

people begin to manage some 

of their financial challenges.

9. I know where people in my 

community can go for credit 

and debt counseling and for 

free tax filing assistance.

10. I know where to get help if I 

have questions on financial 

topics or have an issue with a 

financial product or service.

8
18 INTRODUCTION PART 1: VOLUNTEERS AND FINANCIAL EMPOWERMENT

 TOOL 3: FINANCIAL EMPOWERMENT SELF-ASSESSMENT FOR VOLUNTEERS

Financial empowerment self-assessment: Part 3

Use check marks to show whether your answer to each question is “yes,” “no,” or “I don’t know.”

Question Answer

Yes No I don’t 

know

1. I have a savings or checking account at a bank or credit 

union, and make regular deposits and withdrawals.

2. I have applied for, received, and used a credit card.

3. I have applied for and received a loan for a car or a home.

4. I have taken out a payday loan.

5. I have requested my own credit report and reviewed it.

6. I track my income and spending.

7. I have taken a loan from a pawn shop.

8. I have used a check cashing business.

9. I have had a car or other type of personal property 

repossessed for nonpayment.

10. I have received calls from debt collectors.

11. I understand my rights and know what to do if I believe a 

financial services provider has tried to take advantage of 

me.

12. I receive my pay via a method other than a paycheck. 

(Payroll card, direct deposit, or cash, for example.)

8
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 19

Financial empowerment self-assessment: Part 1 answer key

Here are the correct answers for Part 1 of the “Financial Empowerment Self-Assessment.” 

If you did not answer the item correctly, see the toolkit module listed next to the answer for 

more information. Reading through the module indicated can help you understand the answer 

to the item and build your financial empowerment knowledge and confidence.

Questions True False Module

1. Goals are not important to financial planning or budgets. Module 1

2. To have enough money for emergencies you must save 

3 to 6 months’ worth of living expenses. 

Module 2

3. A cash flow budget helps you track whether you will 

have enough cash to cover your bills from week to 

week.

Module 5

4. If you can’t pay all of your bills and collectors are calling, 

the “squeaky wheel” that calls you the most should be 

paid first.

Module 4

5. The only way to receive the income you’ve earned from 

working is by receiving a paycheck.

Module 3

6. Credit is when you owe someone money. Module 6

7. The amount of your monthly debt payments may impact 

your ability to access new credit.

Module 6

8. A poor credit history may keep you from getting an 

apartment, and in some states, insurance, or even a job.

Module 7

9. The only cost of having a checking account is the 

monthly service fee.

Module 8

10. As a consumer, you have almost no rights when it 

comes to financial products.

Module 9


20 INTRODUCTION PART 1: VOLUNTEERS AND FINANCIAL EMPOWERMENT

 TOOL 3: FINANCIAL EMPOWERMENT SELF-ASSESSMENT FOR VOLUNTEERS

Financial empowerment self-assessment: Part 2 answer key

There are no right or wrong answers for Part 2. That’s because the answers are your opinions 

about your own financial knowledge, feelings, and situation. Use the following chart to count up 

how many of each answer you had:

Rating Does not 

apply

Strongly 

disagree Disagree Agree Strongly agree

Total for each

Total of strongly disagree

+ disagree:

Total of agree + strongly 

agree:

§ If the total of Agree + Strongly agree is greater than the total of Strongly disagree + 

Disagree, you feel good about many aspects of your financial life.

o List any that you rated as Disagree or Strongly disagree below and read the modules 

that relate to these areas in the Your Money, Your Goals toolkit to learn more.

§ If the total of Agree + Strongly agree is less than the total of Strongly disagree + 

Disagree, you may be feeling stress about many aspects of your financial life.

o Consider reviewing the entire toolkit and working through the worksheets on your 

own before you work with the people you serve.


YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 21

Statement If your rating is Disagree or Strongly 

Disagree, check out . . .

1. I have money set aside for emergencies 

and goals. Modules 1 and 2

2. I know how to claim state and federal tax 

credits. Modules 2 and 3

3. I am not worried about how much money I 

owe.

Modules 6 and 7

4. I am confident about the information on

my credit reports and my scores.

Module 7

5. I don’t worry about being able to pay my 

bills and expenses.

Modules 4 and 5

6. I understand how credit works. Module 7

7. I know how to get incorrect items on my 

credit report fixed. Module 7

8. I feel confident about helping people begin 

to manage some of their financial 

challenges.

Consider reviewing all of the content modules.

9. I know where people in my community can 

go for credit and debt counseling and for 

free tax filing assistance.

See the resources listed at the end of modules 6

and 7 and the supplemental guide for creating a 

strong financial empowerment resource and 

referral network.

10. I know where to get help if I have 

questions about financial topics or have an 

issue with a financial product or service.

See the resources listed at the end of modules 6

and 7 and the supplemental guide for creating a 

strong financial empowerment resource and 

referral network. Also see Module 9 to learn 

about submitting complaints to the CFPB.
22 INTRODUCTION PART 1: VOLUNTEERS AND FINANCIAL EMPOWERMENT

 TOOL 3: FINANCIAL EMPOWERMENT SELF-ASSESSMENT FOR VOLUNTEERS

Financial empowerment self-assessment: Part 3 answer key

There are no right or wrong answers for Part 3 because it helps you identify the financial 

products or services and situations you have had experience with. This is important because the 

people you’re working with may have used products and services you haven’t used or have 

experienced situations that you haven’t. If you’re not familiar with some of these topics, you may 

want to learn more about them. Use the modules in the second column to learn more. You may 

also find it helpful to review those modules even if you have experience with these situations, 

products, services, and providers.

Question Modules of Interest

1. I have a savings or checking account at a 

bank or credit union, and make regular 

deposits and withdrawals.

Module 8

2. I have applied for, received, and used a 

credit card.

Modules 6 and 7

3. I have applied for and received a loan for a 

car or a home. Modules 6, 7, and 8

4. I have taken out a payday loan. Modules 6 and 8

5. I have requested my own credit report and 

reviewed it.

Module 7

6. I track my income and spending. Module 3

7. I have taken a loan from a pawn shop. Modules 6 and 8

8. I have used a check cashing business. Modules 3 and 8

9. I have had a car or other type of personal 

property repossessed for nonpayment. Modules 6 and 7

10. I have received calls from debt collectors. Module 6

11. I understand my rights and know what to do 

if I believe a financial services provider has 

tried to take advantage of me.

Module 9


YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 23

12. I receive my pay via a method other than a 

paycheck. (Payroll card, direct deposit, or 

cash, for example.)

Modules 3 and 8

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 

This Tool may ask you to provide sensitive personal and financial information. The CFPB does not collect any information from you 

or the organization using this Tool. The CFPB is not responsible and has no control over how others may use the information that 

you provide to them about your personal or financial situation. The CFPB recommends that you do not include names or account 

numbers and that users follow their organization’s policies regarding retention, storage, and disposal of documents that contain 

personal information.

Resources

For additional resources, visit the Consumer Financial Protection Bureau website:

http://www.consumerfinance.gov/askCFPB

If you have a consumer complaint, visit:

http://www.consumerfinance.gov/complaint

v

YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 25

1.

INTRODUCTION PART 2:

Understanding the situation

You may be wondering where you should start with 

someone you’re helping. This goal and financial 

situation assessment may help you figure out a 

beginning point when you meet with someone. 

When you feel the time is right, you can simply ask 

the person to complete the assessment. You can then 

match the answers with modules in the toolkit or 

share the “Quick Tips” as a starting point for 

assistance. If the organization for which you 

volunteer uses an intake form, it may be willing to 

consider adding some or all of these questions to it, 

too.

The assessment is simple and only has a few key 

questions, so you might decide to gather the 

information in a conversation. Reading the 

assessment and recording the answers may be useful 

if you’re working with someone that has limited literacy levels, is an English language learner, or 

with whom a question and answer format would be more productive.

Introducing the assessment may be uncomfortable if you’re not used to asking these types of 

questions. Part 3 of the Introduction provides tips on starting the conversation. You can say 

something like this as an introduction:

We know that many issues in running a household involve money. You know 

where you are and where you’d like to go, and we would like to provide you 

with information and tools to help you use your money to reach your goals. To 

Assessment

Assessment gives you a picture of 

what is going on now so you can 

better target information and skill 

building opportunities for yourself or 

the people you serve. Assessment 

involves gathering information to 

understand conditions today as well 

as what someone knows, can do, or 

feels about a specific topic. This 

information is used to inform and 

plan for actions to change conditions, 

knowledge, abilities, behaviors, or 

beliefs. 

3
26 INTRODUCTION PART 2: UNDERSTANDING THE SITUATION

get us started, we have this questionnaire, which you’ll see covers several topics.

Your answers will help us build a plan to get you the information and tools that 

are going to be most useful to you right now. We won’t use the information you 

provide in any other way. 

Remember, financial empowerment is a big topic. Knowing where to start can be hard, but using 

this assessment will help you identify what is going on with the person you’re working with and 

provide him with the right information, tools, or referrals.

Using the assessment or using its questions as a conversation guide is optional, but using it can 

help you decide where to start in the toolkit. For example, if someone has a goal to buy a car or a 

home, you can target Understanding credit reports and scores, because learning how to 

improve his credit history may help him qualify for a lower cost loan. If you are working with 

someone that is unable to make ends meet, you can target Getting through the month.

This tool will help you match each person’s goals and financial situation with specific modules 

and tools. It will also highlight circumstances where the person could benefit from a referral to a 

specialized counselor or an attorney. 

Finally, be sure you can provide assurance of confidentiality and describe your system for 

keeping this information secure (e.g., a locked drawer in a file cabinet). If you keep a copy of the 

assessment, be sure you have a system for keeping the information completely confidential. As 

you proceed, be sure to follow your organization’s policies when it comes to storing and 

handling people’s personal information.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 27

Tool 1:

My money picture 

Where I am – and where I want to go

Please answer the following questions based on where you are today. There are no right or 

wrong answers. Your answers can help us provide you with information and resources that can 

help you with the financial issues you care about.

If you could change one thing about your financial situation, what would it be?

________________________________________________________________

________________________________________________________________

Question Response

1. Do you have dreams for you or your children

that require money to make them happen? Yes No I don’t know

2. Are you behind on rent, car payments, or 

your mortgage? Yes No I don’t know

3. Are you behind on utility payments? Yes No I don’t 

know

4. Can you count on having about the same 

amount of income every week? Yes No I don’t know

5. When unexpected expenses or emergencies 

happen, do you have some money set aside 

to cover them?

Yes No

I don’t 

know

6. Do your money, benefits, and other resources

cover all of your bills and living expenses 

each month?

Yes No I don’t 

know

8
28 INTRODUCTION PART 2: UNDERSTANDING THE SITUATION

 TOOL 1: MY MONEY PICTURE

7. Do you have student loans or other debts 

you’re having trouble paying? Yes No I don’t know

8. Has your credit history made it hard to get a 

car, insurance, a phone, or a job? Yes No I don’t know

9. Do you have an account at a bank or credit 

union? Yes No I don’t know

10. Do you feel like you’re spending too much to 

get your money and use it to pay bills? Yes No

I don’t 

know

11. Have you had issues with a financial product 

or service like a bank account, loan, 

mortgage, debt collector, or credit report that 

you haven’t been able to resolve?

Yes No

I don’t 

know

If you answered that you have dreams for yourself and your family, what are they? 

__________________________________________________________________

__________________________________________________________________

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 

This Tool may ask you to provide sensitive personal and financial information. The CFPB does not collect any information from you 

or the organization using this Tool. The CFPB is not responsible and has no control over how others may use the information that 

you provide to them about your personal or financial situation. The CFPB recommends that you do not include names or account 

numbers and that users follow their organization’s policies regarding retention, storage, and disposal of documents that contain 

personal information.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 29

My money picture key

Use the following chart to help you determine where to start the financial empowerment work with the people you serve. 

Use the answers to the first and last questions as additional information to help you pinpoint the module and tool that will be 

most useful right now. If the person you’re talking with is facing bills they can’t pay today or this week, first help them address 

that situation. As you do, let them know that if they’d like, you or someone else can help them start working on ways to bring their 

income and expenses into balance. 

Question Response Quick Tips

1. Do you have dreams for 

you or your children that 

require money to make 

them happen?

If No or I don’t know, see 

Module 1.

§ Brainstorm a list of your hopes, wants, and dreams.

§ Pick one and turn it into a goal with a timeframe. Make it specific 

and measurable.

§ Figure out how much you need to save or set aside each week 

(or month) to reach your goals.

2. Are you behind on rent, 

car payments, or your 

mortgage?

If Yes, call 211 or an

emergency assistance center. 

For homeowners, call (888) 

995-HOPE.

See Module 4, Tool 5: When 

Cash is Short

If “yes”, call 211 or local emergency assistance center. By dialing 

211, people in need of assistance are referred, and sometimes 

connected, to appropriate agencies and community organizations.

For homeowners, call 888-995-HOPE or CFPB at (855) 411-CFPB 

(2372). You can find certified housing counselors on CFPB’s website 

at http://www.consumerfinance.gov/find-a-housing-counselor.

3. Are you behind on utility 

payments?

If Yes, call 211 or local 

emergency assistance center.


30 INTRODUCTION PART 2: UNDERSTANDING THE SITUATION

 TOOL 1: MY MONEY PICTURE

4. Can you count on 

having about the same 

amount of income every 

week?

If No, Module 3 for information 

on tracking and managing 

variable income. 

Call 211 or local emergency 

assistance center.

Make a referral to your local 

workforce opportunity center.

5. When unexpected 

expenses or 

emergencies happen, 

do you have some 

money set aside to 

cover them?

If No or I don’t know, see 

Modules 2 and 4.

§ Think about your last unexpected expense. How much did 

you have to spend the last time your car broke down or 

something unexpected happened?

§ Keep track of everything you spend money on for a week.

§ Review your spending and figure out whether you can make 

some changes.

§ If you can, put aside a small amount each week. If you usually 

receive a tax refund, think about setting a goal for how much of it 

you want to save.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 31

6. Do your money, 

benefits, and other 

resources cover all your 

bills and living 

expenses?

If No or I don’t know, see 

Modules 4 and 5.

§ Write down your total income and benefits and when they 

come in – both your wages and any benefits you receive (like 

SNAP or rental assistance.) If your pay is irregular or changes 

from paycheck to paycheck, use the amount you receive in a 

week when you don’t work extra hours.

§ Write down your bills and the due dates.

§ Write down your total expenses – Add all of your expenses 

and other uses of cash (including savings and debt repayment) 

for the week.

§ If you have enough income and resources in a month to cover 

the bills, but your income arrives after the bills are due, reach out 

to the companies to see if it’s possible to change the due date or 

make bi-weekly payments.

§ Look for expenses you might be able to pay less for or 

temporarily cut back.
32 INTRODUCTION PART 2: UNDERSTANDING THE SITUATION

 TOOL 1: MY MONEY PICTURE

7. Do you have student 

loans or other debts 

you’re having trouble 

paying?

If Yes or I don’t know, see 

Modules 6 and 4.

§ Make a list of your debts with the amount of your payments 

and when they are due.

§ If you can’t make a payment, call the business. Ask if they 

can change the due date, the payment plan, or the terms of the 

loan. 

§ If you want to reduce your debt, track your spending to see if 

you can make changes and increase your payments.

§ Tools for student loan repayment options are available at 

www.consumerfinance.gov/paying-for-college. 

§ If you need or would like help managing your debts, visit the 

National Foundation for Credit Counseling: at 

http://www.nfcc.org/ or find a housing counselor at 

www.consumerfinance.gov/find-a-housing-counselor. 

§ If you would like to speak with an attorney about a lawsuit by a 

creditor or debt collector, information on finding a lawyer can be 

found at: http://www.consumerfinance.gov/askcfpb/1433/how-doi-find-lawyer-or-attorney-represent-me-lawsuit-creditor-or-debtcollector.html.

8. Has your credit history 

made it hard to get a 

car, insurance, a phone, 

or a job?

If Yes or I don’t know, see 

Module 7.

§ Pull your free annual credit report to find out what’s on your 

credit record at https://www.annualcreditreport.com. 

§ If there are errors, contact credit reporting agencies to address 

them or visit https://www.consumerfinance.gov with questions.

§ If you need help or would like help strengthening your credit, 

check out the information and resources listed in Module 7 that 

can link you to local credit or housing counselors.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 33

9. Do you have an 

account at a bank or 

credit union?

If no see Module 8.

If you don’t have an account and want to open one, shop around

and compare several banks or credit unions.

§ Ask them questions about:

o Their hours and the services they offer (like online 

tools) 

o The fees they charge (monthly fees, overdraft fees, 

etc.)

o The amount you need to open the account

o Any other rules about the account

§ If you want an account and have been turned down, ask the 

bank or credit union to tell you exactly why they are denying you 

an account. Review the report they give you and check for any 

errors.

10. Do you feel like you’re 

spending too much to 

get your money and use 

it to pay bills?

If Yes or I don’t know, see 

Module 8.

§ Think about how you use financial services. Do you need to 

cash paychecks? Do you need to pay your bills? Do you want a 

safe place for your money? Does your employer or benefits 

provider require direct deposit?

§ Ask yourself what’s most important to you if you want these 

services. Are hours and location more important to you than 

things like customer service, available products, or fees? How 

important is safety and security to you?
34 INTRODUCTION PART 2: UNDERSTANDING THE SITUATION

 TOOL 1: MY MONEY PICTURE

11. Have you had issues 

with a financial product 

or service like a bank 

account, loan, 

mortgage, debt 

collection, or credit 

report that you haven’t 

been able to resolve?

If No or I don’t know, see 

Module 9.

You can submit a complaint to CFPB at 

http://www.consumerfinance.gov/Complaint or call toll-free at (855) 

411-CFPB (2372).

Resources

For additional resources, visit the Consumer Financial Protection Bureau website:

http://www.consumerfinance.gov/askCFPB

If you would like help managing your debt or rebuilding credit, visit the National Foundation for Credit Counseling:

http://www.nfcc.org/

Certified housing counselors can provide advice on budgeting, buying a home, renting, defaults, foreclosures, and credit 

issues:

www.consumerfinance.gov/find-a-housing-counselor

The Consumer Financial Protection Bureau (CFPB) has prepared this material as a resource for the public. This material is provided for educational and information purposes 

only. It is not intended to be a replacement for the guidance or advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible 

for the advice or actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are limited to the materials that the 

CFPB has prepared.

v
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 35

INTRODUCTION PART 3:

Starting the money 

conversation

Everyone has questions about money. Even the 

wealthiest people in the world may turn to someone 

when they have financial questions. 

It can be difficult, though, to talk about money, even 

with people that you know well. It can feel 

uncomfortable to raise the topic of personal finance

because it’s so personal.

But you may already be talking with people about 

other personal issues or their goals. Talking about 

money can get easier if you start the conversation 

at the right time in a way that acknowledges 

their personal goals. By approaching financial 

issues in a non-judgmental way, you will build trust 

that can allow you to help them start to address their 

financial challenges.

Use the experiences that you’ve had in your own 

life or that friends and family have had to help you understand where the people you’re working

with are coming from. When people feel that you respect them and that they can trust you, 

they’re usually more willing to open up and discuss financial topics that might otherwise make 

them feel uncomfortable.

Starting the conversation

If financial empowerment is not a 

part of your regular discussions, 

knowing when to bring up the topic 

can be a challenge at first. Ways to 

start the conversation include:

§ Using the assessment tool during 

intake or check-in meetings

§ Making the most of shorter 

discussions to introduce a tool or 

make a referral

§ Following up with people when 

they bring up financial issues 

directly or indirectly

3
36 INTRODUCTION PART 3: STARTING THE MONEY CONVERSATION

Financial empowerment opportunities in common situations 

Here are a few examples of situations where the toolkit’s information and tools and using 

your organization’s referral network could strengthen the work that you are already doing 

as a volunteer.

§ In working with a couple on strengthening their relationship, it becomes clear that 

different spending habits and attitudes are a source of conflict.

§ An individual lands a new job, and she doesn’t understand how direct deposit works 

and whether it is a good idea for her.

§ Someone you are working with had his hours cut back at work. He knows he won’t 

have enough cash next month to cover the bills and needs a strategy for prioritizing 

bills and paying them off.

§ An individual just received a tax refund and would like to set it aside for 

emergencies but doesn’t have a bank account. 

§ A woman who has just left an abusive relationship is concerned that her husband is 

making purchases in her name.

§ Someone you are working with is new to this country and hopes to eventually buy a 

home. He doesn’t understand how credit scores work and why they matter so much.

How should I bring up money topics? 

Use the assessment tool

If you have a lot of contact with someone, one of the easiest ways to bring up money is to use the 

My money picture tool from Introduction Part 2: Understanding the situation. Going over this 

series of questions will give you a clearer picture of where the person stands and what 

information might be most useful. Remember, you can:

§ Ask the person to complete the assessment either in your meeting or at home.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 37

§ Cover the questions in a conversation.

§ Ask the person to answer only a few of the questions.

Make the most of short-term contacts

It’s great to be able to build trust and discuss financial issues with the people you serve over the 

long term, but sometimes you just don’t have that kind of time. You can work on empowering 

people financially during short-contact meetings, too. For example, if it’s early in the year and 

you’re winding up a brief meeting with someone you’ve just met, you could say:
38 INTRODUCTION PART 3: STARTING THE MONEY CONVERSATION
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 39

Respond when people initiate

Sometimes a person brings up a financial issue directly or indirectly. Here’s an example of how 

it could sound if someone brings up a financial issue directly. Aaliyah, with whom you have 

regular and focused contact, says in one of your early meetings: 
40 INTRODUCTION PART 3: STARTING THE MONEY CONVERSATION

Here’s an example of how it could sound if someone brings up a financial issue indirectly. For 

example, during a meeting you ask Aaliyah how her kids are doing, and she says:

Discussing difficulties or problems 

Many people have difficulty with credit or other financial products or services, and some may 

feel shame or embarrassment because of their situation. When you discuss these problems, first 

be empathetic. Then try to suggest or discuss in clear terms how to avoid a similar situation in 

the future. Explain how to get help from the CFPB and other federal, state, or local agencies if 

they can’t resolve problems with the financial services provider.4

The CFPB has already handled over half a million consumer complaints about a wide range of 

consumer financial products and services. Based on these complaints and research, the CFPB 

takes action to stop practices that are unfair, deceptive, abusive, or otherwise violate the law. In 

many cases, the CFPB partners with other federal agencies and state officials to address these 

 

4 See Module 9: Protecting consumer rights for information on submitting a complaint to the CFPB and other 

authorities. Or, you can submit a complaint on behalf of the person you’re helping.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 41

problems. Through enforcement actions, the CFPB can require companies to refund money to 

customers when their consumer rights have been violated. 

If you submit a complaint to the CFPB, they will forward your complaint to the company and 

work to get a response. After they forward your complaint, the company has 15 days to respond 

to you and the CFPB. Companies are expected to close all but the most complicated complaints 

within 60 days. You’ll be able to review the response and give feedback. If the CFPB finds that 

another agency would be better able to assist, they will forward your complaint and let you 

know. 

CFPB also shares complaint data with state and federal agencies who oversee financial products 

and services, and publishes a database of non-personal complaint information so the public 

knows what kinds of complaints they receive and how companies respond. 

You can submit a complaint: 

Online: consumerfinance.gov/complaint

Toll-free phone: (855) 411-CFPB (2372), 8am-8pm EST, Monday - Friday

TTY/TDD phone: (855) 729-CFPB (2372)

Fax: (855) 237-2392

Mail:

Consumer Financial Protection Bureau

PO Box 4503, Iowa City, IA 52244

The Consumer Financial Protection Bureau (CFPB) has prepared this material as a resource for the public. This material is provided 

for educational and information purposes only. It is not intended to be a replacement for the guidance or advice of an accountant, 

certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or actions of the 

individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are limited to the 

materials that the CFPB has prepared.
42 INTRODUCTION PART 3: STARTING THE MONEY CONVERSATION
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 43

INTRODUCTION PART 4:

Emotions, values, and 

culture: What’s behind our 

money choices?

Everyone has situations where they know what they “should” do but find themselves doing 

something else instead, especially when it comes to money. For example, you may have decided 

to save part of your tax refund to build an emergency fund. Instead, you use it to help a family 

member pay down his medical debt, because not helping a family member pay off as debt would 

go against the values you were raised with. Or you may use it to splurge on something you have 

wanted. You’ve been working hard and making this splurge for yourself or your family feels 

good. 

Financial decisions, no matter how well intended, are never made in a vacuum. Many things 

influence both our short- and long-term financial decisions. This information focuses on three of 

the influences on financial decision-making: emotions, values, culture.

Emotional influences on financial decisions

When people talk about money, it’s not just about the numbers. They are really discussing what 

money means to them. Attitudes and behaviors around money are wrapped up in feelings 

around security, failure, family, love, and status. It’s important to listen carefully to the people 

you’re helping to try to determine their emotional reactions to money and its meaning. Then you 

can integrate their emotions and feelings into your discussions about their finances. 
44 INTRODUCTION PART 4: EMOTIONS, VALUES, AND CULTURE: WHAT’S BEHIND OUR MONEY CHOICES

Instead of just asking a person to give you the basic 

numbers, try asking questions about how he or she

feels when you’re discussing their finances. You could 

try questions like: 

§ “What does money mean to you?”

§ “What is your first memory about money?”

§ “What is the most difficult thing about money 

for you? For your family?” 

Helping people become aware that financial decisions are influenced by emotions and past 

experiences may help them understand what drives some of their financial practices. It can also 

help you better understand their unique strengths and challenges.

Understanding personal values around 

money

Each of us has a unique set of values that shape how we prioritize what we do with our time, 

energy, and—importantly—money. Just in a single day, we may make many choices about “what 

is more important:”

§ The enjoyment of eating out at a restaurant or the benefits of the less expensive option of 

eating at home.

§ Spending time visiting an aging parent or using that time to watch a neighbor’s children 

while she interviews for a job.

§ Buying an expensive Christmas present for a nephew or buying a less expensive gift and 

saving what is left over.

§ Paying for financial obligations such as child support and student loans before spending 

money for “wants.”

Think about the values that drove some of your recent decisions. Were you deciding between 

family obligations and investing in your career? Were you deciding between enjoying today and 

preparing for tomorrow?

Values

Core values are underlying principles 

that prioritize how people spend time 

and money. Values inform how we 

decide what is more important when 

alternatives compete for our time, 

energy, and—importantly—money.

3
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 45

Values run deep

When asked to examine why they hold the values that they hold today, many people find that 

those values are connected to the early, formative experiences of their lives. The formation of 

our values can run so deep that it is often difficult to figure out where they came from. 

Your family, religious views, cultural background, experiences in childhood and later in life, and 

your own personal reflections on what is important can all contribute to the set of values that 

drive your choices. For example, in some cultures it is expected that family members help each 

other financially until all get ahead. Consider these stories:

§ Hernan’s parents worked multiple jobs and scrimped and saved throughout his 

childhood so that he could be the first in his family to go to college. Today, as an adult 

father of two, Hernan typically cashes in his vacation time. He’d rather put that money 

into the kids’ college funds. 

§ Tina’s father never made it to Europe. Toward the end of his life, he confided that he 

always regretted that fact. Lately, when Tina sees the Carpe Diem bumper sticker on her 

car each morning, she wonders if she’ll ever save enough to travel. She’s beginning to 

think she should just go now before it’s too late.

What values are involved in each decision in the stories above? Which of your own values affect 

what you think of these situations and your thoughts on what each person should do?

Cultural influences on financial decisions

No decisions, including financial ones, are made in a vacuum. People make all of their decisions 

within the very powerful context of culture, including family, ethnicity, region, community, 

socio-economic status, generation, and religion. Each of these factors influences beliefs, values, 

and experiences about money and the way financial decisions are handled.
46 INTRODUCTION PART 4: EMOTIONS, VALUES, AND CULTURE: WHAT’S BEHIND OUR MONEY CHOICES

Cultural influences are heavily rooted in values. Consider the ways common American values—

such as individualism, practicality, honesty, and hard work5—might influence people’s financial 

choices. Businesses, governments, and the media also influence values around money. 

Differences in cultural values can affect financial behavior. For example, Western culture values 

individuality and personal well-being, which means it’s generally considered appropriate for 

each person to support themselves financially. In some other cultures, family members support 

each other financially throughout their lives. If they save money, it may go to a family member 

they believe needs it. If someone chooses to spend his extra income on his extended family or 

neighbors instead of saving it in an emergency fund, this doesn’t mean that he has bad financial 

habits. Instead, he is just making financial choices in a different cultural context than you may 

be familiar with. 

It’s important to understand cultural influences without being judgmental. When you discuss

financial goals and choices with people, seek to understand their values and cultural influences. 

This can help you help them reach their true goals in a way that makes them feel understood and 

respected. They might agree to a financial plan that makes rational sense and know that it’s 

what they have agreed to do, but this is often not enough to override their feelings or cultural 

context in the moment when decisions are made. Remember that while their priorities may 

seem counterproductive to you, within their own culture, they may feel completely appropriate.

Conflicts around culture and values

Sometimes, you may find that people are caught in the middle of cultural conflicts around 

money. Their family culture may value saving and avoiding debt. But their broader community 

may value material things like new cars or expensive clothes, which could require taking on debt 

to purchase. Or the culture in which they were raised might value caring financially for parents 

as they age, while their co-workers are not expected to take on that same responsibility. 

At other times, these conflicts take place within a family. One spouse may have cultural 

influences or a family background that encourage them to save for their children’s education, 

while the other may feel that children should be responsible for their own educational expenses. 

 

5 Kohl, L. Robert, Values Americans Live By, 1984. See

http://www.claremontmckenna.edu/pages/faculty/alee/extra/American_values.html.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 47

One parent may want to save the family’s tax refund; the other will think that money should go 

towards things the family needs or simply wants now. These kinds of conflicts can lead to 

emotional decisions that may not look rational on the outside but make perfect sense given each 

person’s background, values, and culture. 

In these situations, where people may have their own conflicting emotions about money, it is 

important to remember that you have your own attitudes and feelings toward money – and they 

are probably different from the people you’re working with. Be sure that you are not offering 

advice based solely on your own preferences.

Use questions to understand what’s behind 

decisions

When discussing people’s financial behavior, don’t just accept their expressed wants at face 

value. Take time to ask questions that can help you discover their underlying attitudes, needs, 

goals, and roadblocks. Ask them questions like:

§ “Who handles the finances in your family?”

§ “How does your community of faith view money?”

§ “How did your family handle finances when you were growing up? Did you discuss 

money openly?”

§ “How do your friends view money? How do you think this may influence you?”

§ “What do you want your children to learn about money? What do you think they are 

learning from you now?” 

It’s often difficult for people to open up about money, but taking the time to help them

understand their values and attitudes about money can provide both you and the people you 

serve with new insights. These insights can help them make lasting and productive changes that 

help them reach their goals.

Once you understand the cultural factors that are guiding people’s behavior, you can coach them

toward financial choices that help them effectively manage their obligations and line up with

their true values and desires.
48 INTRODUCTION PART 4: EMOTIONS, VALUES, AND CULTURE: WHAT’S BEHIND OUR MONEY CHOICES

This might mean that you help them figure out a compromise. For example, you might help

them figure out how to take responsibility for their own financial obligations without asking

them to abandon their commitment to help their extended family.

Keeping personal values in check

Our own values about money and financial issues may affect the way that we approach financial 

empowerment and our interactions with the people we serve. Our own values affect what we 

think of situations and our thoughts on the best course of action. It can sometimes be tempting 

to “set someone’s priorities straight,” or tell them what you would do in their situation. 

Ultimately, however, this is not a successful strategy. Information, advice, and other 

support will only “stick” when they are aligned with a person’s own deeply rooted 

beliefs and values. 

In fact, imposing one’s own values on someone else can be counterproductive:

§ The person might feel judged and stop talking with you about money and financial 

decisions.

§ The community volunteer and the person they’re serving miss an important opportunity 

to compare values and attitudes toward money and to consider how they are connected 

to financial outcomes.

Consider using some combination of the following strategies for keeping values in 

check:

Examine your own values. Being more aware of the values that you hold and understanding 

your experiences can help you to realize whether they are getting in the way of helping someone. 

Knowing what your values are and where they came from does not mean that you have to give 

up those values. It just means that—while you are acting as a source of support and 

information—you will be better able to take the other person’s point of view into account as you 

help them weigh the financial choices in their lives.

Ask “implication” questions. Rather than tell someone which is the “better” course of 

action, ask questions that help identify the risks and rewards of each choice:
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 49

§ “If you continue on this path, what is the short-term gain and the long-term impact?”

§ “Does this financial choice help you and your family get to where you want to go? Who in 

your life will be affected by this course of action and how?”

Then, stop and listen. Let the person tell you what is important to her.

Help people examine their values and how they drive their financial decisions. 

Helping someone understand what drives his financial behavior is one of the most powerful 

outcomes you can achieve as a community volunteer. He can use that new insight to examine 

today’s financial decisions and potentially re-evaluate other behaviors. You can help people

achieve those insights by asking about the reasons for and against different courses of action 

and prompt them to talk through why those reasons are important. When you spot what might 

be someone’s core value, say it and ask follow-up questions that define the value:

§ “It sounds like being a source of support to your siblings is really important to you. 

Would you agree with that?”

§ “Has that always been a core value of yours? What first made you feel this was so 

important?”

§ “What makes helping your siblings important to you?”

Keeping your personal values in check doesn’t mean that you shouldn’t help 

people understand the consequences of their choices. Try to find a balance. On the one 

hand, you need to understand the person’s perspectives and values. On the other hand, 

volunteers who work with people at this level have a responsibility to make sure that they 

understand the real-life, long-term consequences of their decisions. Choices made today might 

limit options tomorrow for things like helping a family member in need, starting a family 

business, or saving for personal goals such as buying a car or a home. 

Help people understand how new behaviors line up with their existing values. Once 

someone understands their core values and how they influence their financial choices, help 

them understand how a new or different financial behavior is in line with their existing values. 

Helping people identify the reward based on their own value set gives them much stronger 

footing as they try to change their behavior. People are much more likely to stick with new 

behaviors that they believe will benefit them when they are in line with their values than when 

they try to change just because they think they are “supposed” to.
50 INTRODUCTION PART 4: EMOTIONS, VALUES, AND CULTURE: WHAT’S BEHIND OUR MONEY CHOICES

The Consumer Financial Protection Bureau (CFPB) has prepared this material as a resource for the public. This material is provided 

for educational and information purposes only. It is not intended to be a replacement for the guidance or advice of an accountant, 

certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or actions of the 

individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are limited to the 

materials that the CFPB has prepared.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 51

MODULE 1:

Setting goals and planning for 

large purchases

Every person or family has a different idea of the future they want to build. Some of the ideas 

they have are focused on the next few weeks or months, and others are long-term. What do you 

want for yourself and your family in the near future? What do you want to see in the next few 

years? These ideas of your future are your hopes, wants, and dreams.

These are important questions, but people sometimes hesitate to ask them because they feel 

their life is out of control and that they can’t change the direction they’re going.

If you’re like most people, thinking about some of your goals means thinking about the money 

you need to achieve them. Your goal may be having enough money to pay all of your bills each 

month, even though your income varies from week to week. It could be having enough money to 

cover expenses if you are laid off due to seasonal changes in work or to pay off a short-term loan 

from a family member or lender. Your goals could also include saving money to buy gifts at 

holiday time, set up an emergency fund, purchase a car, move to a nicer apartment, make a 

repair on your home, send your child to college, pay for training or education for yourself, pay 

off student loans, or to put into a retirement account. 

Life events and large purchases

People often put off saving for these important goals because they feel like they don’t have 

enough money to save or they are busy struggling to make ends meet today. They feel like they 

can’t think or worry about saving for goals, large purchases, or even life events in the future. 

This can create financial challenges in the future. Not thinking about, planning for, or saving for

these things in particular may mean that there is no money to cover:
52 MODULE 1: SETTING GOALS

§ Moving in with a partner, getting married, getting separated, getting divorced, or 

becoming widowed

§ The birth of a child

§ Faith-based celebrations associated with children

§ Your daughter’s quinceañera

§ Your son’s bar mitzvah

§ Your child’s high school graduation celebration

§ Post-high school training or education expenses for your children

§ Purchase of a car

§ Purchase of a home

§ Training or education to help you get a different job or a higher paying position

§ Starting a new job

§ Tools or equipment needed for your trade or profession

§ Wedding expenses for your children

§ Short- or long-term disability

§ Illness

§ Loss of a job (Covering the gap unemployment benefits don’t cover)

§ Celebration for a landmark birthday or anniversary

§ Illness or death of a family member

§ Retirement

§ Your own final expenses

Some of these events are likely to occur, and others may never happen to you. But some of them 

will be inevitable. Because of the expenses that are associated with life events, people often set 

goals, particularly long-term goals, around them. 
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 53

Once you know where you are and where you’d like to go, you can start moving in the direction 

you’ve chosen.

Depending on the goal, it can take just a week, a month, or a few months to reach. These are 

short-term goals. You may also have long-term goals—things that will take many months or even 

years to reach.

Costs of life events 

What is a life event likely to cost? While there are many variables that affect the cost of 

life events from one person or family to another, here are some average costs of life events 

in the U.S.:

§ Out of pocket childbirth expenses for women with insurance coverage—$3,4001

§ Out of pocket expenses associated with breast cancer—$712/month2

§ Quinceañera—coming of age celebration for 15-year old girls in Latino families--

$15,000 to $20,0003

§ Typical cost for final expenses—$10,0004

1. Rosenthal, Elizabeth, American Way of Birth, Costliest in the World, NY Times, June 30, 2013. See 

http://www.nytimes.com/2013/07/01/health/american-way-of-birth-costliest-in-the-world.html?pagewanted=all&_r=0. 

2. Andrew, Michelle, Cancer Costs Can Be Prohibitive Even with Insurance, Washington Post, October 10, 2011. See 

http://www.washingtonpost.com/national/health-science/cancer-treatment-costs-can-be-prohibitive-even-withinsurance/2011/10/06/gIQA8iBfaL_story.html. 

3. Kennedy, Bruce, These Girls’ Parties Can Cost More than a Wedding, MSN Money, August 9, 2013. 

4. Gibbs, Lisa and Mangal, Ismat Sarah, The High Costs of Saying Goodbye, CNN Money, November 9, 2012. See 

http://money.cnn.com/2012/11/01/pf/funeral-costs.moneymag.

Setting SMART goals

Setting goals is a powerful process for thinking through your short-term and long-term future 

and finding ways to turn your vision into reality. It helps you turn your needs, wants, hopes, and 

dreams for the future into something concrete that you can take steps to achieve. 
54 MODULE 1: SETTING GOALS

Setting goals helps you to: 

§ Work toward making your future better

§ Prioritize how you spend your money so that it goes toward things that really matter to 

you

§ Measure and track your progress toward getting the things you want out of life

§ Take pride in bettering your life and the lives of your children

SMART goals have five important characteristics. They are Specific, Measurable, Able to be 

reached, Relevant, and Time bound. When setting a new goal, think about the following:

Specific

Ask yourself: What will I achieve or who will benefit from the goal? What 

specific thing will I accomplish? Why is the goal important? Is this goal 

related to covering the expenses associated with an expected life event?

A specific goal has a much greater chance of being met than a general

one, because it provides something defined to reach for.

Measurable

Ask yourself: How much? How many? How will I know when it is done?

You should be able to track your progress toward meeting the goal.

Able to be 

reached

Ask yourself: Is this goal something that I can actually reach?

You might want to get out of high credit card debt tomorrow or become a 

millionaire in a year, but for most of us, those are totally impossible goals. 

That doesn’t mean that your goals should be easy. Your goal may be a 

stretch for you, but it should not be extreme or impossible.

Relevant

Ask yourself: Is this something that I really want? Is now the right time to 

do this?

Set goals that matter to you and are a priority in your life.

Time bound

Ask yourself: By what date must this goal be reached?

Goals should have a clearly defined time frame, including a target or 

deadline date. This helps ensure they are measureable and that actions 

are planned to reach the goal by the target date.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 55

Here are some hopes, wants, or dreams you might have for your family and how they could be 

translated into strong goals.

Hopes, Wants, or Dreams Strong Goals

I’d like to be able to pay all of my bills each 

month.

Short-term goal: I will review my budget to see if 

there are ways to cut my spending by the end of the 

month.

Long-term goal: I will meet with the Community 

Action Program to see if I qualify for job training and 

other benefits by the end of the month.

I really want to save some money in case 

something happens in the future and I lose 

my job.

I will save $50 over the next eight months to start an 

emergency fund.

I want to get out of credit card debt. I will pay down $1,000 of my debt over the next 18 

months. 

I’d like a safe, stable place to raise my 

children. 

Short-term goal: I will save $800 for the required 

first month rent in the next six months so that I can 

move into a new apartment by June.

Long-term goal: I will save $3,000 for a down 

payment, apply for additional down payment help, 

and purchase a home in four years. 

I’d like to buy a new television. I will save $400 and purchase a new television in six 

months. 

I’d like to help my child go to college.

Short-term goal: I will read to my child every night to 

show that school and learning are important.

Long-term goal: I will save $5,000 in a fund to help 

pay my child’s tuition in ten years. 

Building a plan

Every goal requires two things: commitment and time. To reach goals, you may also need:

§ Information
56 MODULE 1: SETTING GOALS

§ Tools

§ Assistance from a professional

§ Transportation

§ Other resources

§ Money

§ An action plan—small steps needed to reach a goal

Turning goals into financial targets

For goals that require money to reach, you will want to know: How much do I need to set aside 

every week (or month) to meet my goal? 

When figuring out how much you need to set aside every week to meet your goal, you 

need two pieces of information: the total amount you need to reach your goal and the 

number of weeks you have to reach your goal. Then, you can plug those two pieces of 

information into this formula:

Total Amount Needed for Goal ÷ Number of Weeks = Amount to Set Aside Each 

Week for Goal

Here is an example: It is January 1st, and you’ve just set a new goal to save $500 in an 

Emergency Fund by the time your kids start school at the end of August. You already have your 

first piece of information: the total amount needed for your goal $500. To get the second piece 

Total amount 

needed for goal

Number of 

weeks to reach 

goal

Amount to set 

aside each 

week
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 57

of information, the approximate number of weeks, just count the number of months from 

January to August and multiply by 4. You should arrive at 32 (8 months X 4 weeks).6

You can plug these numbers into the formula:

$500 ÷ 32 = $15.65 (rounded)

You would need to set aside about $15.65 every week in order to have $500 by beginning of 

August. (To get the monthly total, divide the amount needed by 8 months instead of 32 weeks.)

If you felt you could not set aside that much every week, you can lengthen the time 

to reach your goal. It’s helpful to use this formula when figuring out if your goal is actually 

reachable in the timeframe you have set. 

Other goals may not require you to set aside money every week. They may require you to get 

more information, get help from a professional or a financial counselor, use a new tool, or create 

an action plan. For example, you goal may be:

I want to pay my bills on time every month starting August 1.

Assuming lack of money is not the primary reason bills are not being paid on time, here are 

some steps you could take to reach that goal:

§ Collect credit card statements, loan payment statements, utility bills, phone bills, and 

documentation of other payments you make each month.

§ Highlight payment amounts and due dates.

§ Fill in the bill paying calendar tool.

§ Consider using automatic payment methods for some recurring bills or online bill 

payment.

 

6 This calculation is designed to simplify planning and can result in individuals reaching their goal more quickly. 

Because there are 35 weeks in 8 months, this can also allow them to miss their target for up to three weeks in the 

period and still reach their goal.
58 MODULE 1: SETTING GOALS

What about revising goals?

Goals aren’t something to set and then forget. You need to keep your goals in sight, and you may 

sometimes need to revise them. 

Revise your goals when:

§ The goal has been achieved

§ The amount of saving every week or month toward the goal is more than what makes 

sense for your family

§ Emergency savings are used and need to be replenished

§ Your circumstances change due to life events (such as when you lose a job or get a new 

job, start earning more money, have a new child, have a health emergency, etc.)

§ Your values change and a goal no longer feels relevant

To revise one of your goals, take a look at what has changed.

If one of your goals has been achieved, it’s time to start the process again and set a new 

goal. Think about what you want for yourself and your family and create a new goal. 

If the amount of saving every week or month toward the goal is more than what is 

possible for you, think about if you can change either total amount of savings or the length of 

time you have to save. Ask yourself if this goal can wait a bit longer. If it can wait, adjust the 

length of time you have to save, which will bring down the amount of your weekly or monthly 

savings. If you can’t adjust the length of time, you can lower the amount of total savings, which 

will also bring down the amount of your weekly or monthly savings. 

For example, in September you decide to buy a new television by the end of November. You’ve 

looked at models, and the one you want is $600. If you start saving at the beginning of 

September, you have approximately twelve weeks to save. When you plug this into the formula 

to see how much you’d need to save each month, you find that you would need to save about $50 

every week (or about $200 every month) in order to meet this goal. But what if you don’t have 

$50 extra dollars in your budget every week? Does that mean buying a new TV is a bad goal? 
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 59

No - it just means you need to adjust your goal. Are you willing to buy a less expensive 

television? If you decide that you can spend $300 on your new TV instead of $600, you’ve cut 

the amount you need to save each week in half. 

But if you don’t want to buy a cheaper television, you can decide to lengthen the time you’ll save 

up for it. Instead of saving for three months, you can extend the time you’ll save to six months. 

By giving yourself twice as much time to save, you can bring your weekly savings down to $25 

and purchase your desired television in February instead of November.

If you’ve used your Emergency Savings, they’ve done their job. Now it’s time to replenish 

them. Create a new goal by figuring out how much Emergency Savings you’d like to have and by 

when. Calculate the amount you need to save weekly or monthly and start saving. (See 

Module 2: Saving for emergencies, goals, and bills for more information on this topic.)

When your circumstances change due to life events (such as when you lose a job or 

get a new job, start earning more money, receive a lump sum from a tax refund or 

inheritance, have a new child, have a health emergency, etc.), take stock of your new 

situation and your goals. If you have less money to put toward savings goals, adjust the length of 

time and/or the total savings for your goals to make them manageable in your new situation. For 

example, if you get a tax refund, consider putting some of the lump sum toward one of your 

goals. This may help you reach the total you need for a goal faster.

When your values change and a goal no longer feels relevant, think about what you 

want for your family in the future. If the goal you set before no longer feels relevant to your life, 

set it aside and begin setting new goals that do feel relevant.

YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 61

2.

Tool 1:

Goal-setting tool

This tool can help you with the goal-setting process. Identifying goals is important, because it 

helps you plan for and reach what is most important to you. When it comes to your finances, 

goals provide the direction for all of your plans. If you don’t plan to save or set aside money for 

your goals, you probably won’t. And in order to save or set aside for your goals, you have to 

know how much money you’ll need and by when.

All goals take time and commitment to reach. Many goals also require information, help from a 

professional, tools, action plans, and money. There are four steps in the goal-setting process:

Step 1: Brainstorm a list of the hopes, wants, and dreams for yourself or your family. Determine 

whether they are short-term or long-term. Write these in the chart below.

Step 2: Turn your hopes, needs, wants, and dreams into SMART goals using the second 

worksheet.

Step 3: Create an action plan to reach your goals. For long-term goals, your action plan may be 

long and involve many steps. For other goals, you may only need to take a few steps to reach 

your goal. 

Step 4: Finally, for goals that require money, figure out how much you need to set aside each 

week (or month) to reach your goal.

If you decide to make a budget or a cash flow budget (See Module 5), be sure to include money 

you need to set aside for your goals.

Step 1: Brainstorm list of hopes, wants, and dreams

Fill in the chart below by listing the hopes, wants, and dreams you have for yourself and your 

family. Write the things you hope, want, or dream about achieving in less than six months in the 

short-term column. Write the things you hope, want, and dream about achieving in more than 

six months in the long-term column.

8
62 MODULE 1: SETTING GOALS

 TOOL 1: GOAL-SETTING TOOL

Short-term

What I want to achieve for myself or my family 

within six months.

Long-term

What I want to achieve for myself or my family 

that will take more than six months.

Step 2: SMART goals

Use your list of brainstormed hopes, wants, and dreams to create SMART goals. Use the 

checklist to make sure your goals are specific, measurable, able to be achieved, relevant, and 

time bound. You may have many things you want to achieve. If you can focus on one or two, you 

may have a better chance of reaching that goal. 

Short-term goal

Goal: □ Specific

□ Measurable

□ Able to be Reached

□ Relevant (important to you)

□ Time bound (is there a 

deadline?)

Long-term goal

Goal: □ Specific

□ Measurable

□ Able to be Reached

□ Relevant (important to you)

□ Time bound (is there a 

deadline?)

8
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 63

Step 3: Action plan

Use the following worksheet to create an action plan. Remember to include resources you may 

need to reach your goals including:

§ Information

§ Tools

§ Assistance from a professional

§ Transportation

§ Other resources

Steps to goal Resources needed

Date to 

complete 

step

when 

complete

8
64 MODULE 1: SETTING GOALS

 TOOL 1: GOAL-SETTING TOOL

Step 4: Figure out weekly target

Use the chart below to figure out the amount of money you will need to set aside each week to 

reach your goals. Only use this worksheet if your goal requires money. 

Goals Amount 

needed

Number of weeks to 

deadline

Amount needed ÷ 

Number of weeks to 

deadline = Weekly set 

aside

Short-term

Example: I will save $50 

within 6 months to start an 

emergency savings fund.

$50 24 weeks $50 ÷ 24 = $2 per week 

(about $8 per month)

Goal:

Long-term

Goal: 

Once you know how much you need to set aside each week to reach a goal, be sure to add it into 

your budget or cash flow budget. For more information on cash flow budgets, see Module 5: 

Getting through the month. For ideas on finding money to save, see Module 2: Saving for 

emergencies, goals, and bills.

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 

This Tool may ask you to provide sensitive personal and financial information. The CFPB does not collect any information from you 

or the organization using this Tool. The CFPB is not responsible and has no control over how others may use the information that 

you provide to them about your personal or financial situation. The CFPB recommends that you do not include names or account 

numbers and that users follow their organization’s policies regarding retention, storage, and disposal of documents that contain 

personal information.

8
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 65

Tool 2:

Planning for life events and 

large purchases

This tool can help plan for life events and large purchases, such as your daughter’s quinceañera, 

a car, or even tools of the trade you may need to make a living. Follow these steps:

1. Think about the life events you are likely to experience and large purchases 

you might need to make. If you rely on a car to get to and from work, you will 

probably need to replace this vehicle at some point in the future, maybe even more than 

once. If you use tools in your trade, they may need to be updated or replaced periodically 

due to normal wear and tear. Brainstorm a list of those expenses using the timeline chart 

below. Consider where you are now, and when you are likely to experience some life 

events (your daughter’s quinceañera or bat mitzvah) or need to make large purchases. If 

your daughter is eight years old now, her quinceañera will be in seven years. If your car is 

five years old or has a lot of mileage on it, you may need to replace it within the next five 

years.

2. Estimate the costs of these expenses. Research the costs of large purchases or life 

events. If the life event or need to make a large purchase is likely to happen more than 

five years from now, remember that the cost of almost everything gradually increases 

over time. This increase is called inflation. 

3. Identify potential ways to pay for the large purchases or costs associated 

with life events. For example, you can borrow money to buy a reliable used or new car. 

If you plan to borrow money, consider saving some money for a down payment to keep 

your monthly payments as low as possible. Many large purchases may require a 

combination of financing and savings to cover the cost.

4. Identify ways to keep the costs as low as possible. For example, for your 

daughter’s quinceañera or bat mitzvah, can you save on the rental of a location by 

holding it in a rent-free or reduced-rent facility like a community hall in your community 
66 MODULE 1: SETTING GOALS

 TOOL 2: PLANNING FOR LIFE EVENTS AND LARGE PURCHASES

of faith? Can you save on the meal by involving family and friends in helping you prepare 

food rather than hiring a catering company?

Planning for life events and large purchases worksheet

Large purchase 

or life event

Cost of large 

purchase or 

life event

Ways to pay

Ways to cut 

expenses/ reduce 

the overall cost

Within 1 year

Between 1 

and 2 years 

from now

Between 2 

and 5 years 

from now

8
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 67

Between 5 

and 10 years 

from now

Between 10 

and 15 years 

from now

Between 15 

and 20 years 

from now

Over 20 years 

from now

Use Tool 1: Goal setting tool to estimate the money you need to set aside to cover 

the large purchase or life event.
68 MODULE 1: SETTING GOALS

 TOOL 2: PLANNING FOR LIFE EVENTS AND LARGE PURCHASES

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are

limited to the materials that CFPB has prepared. 

This Tool may ask you to provide sensitive personal and financial information. The CFPB does not collect any information from you 

or the organization using this Tool. The CFPB is not responsible and has no control over how others may use the information that 

you provide to them about your personal or financial situation. The CFPB recommends that you do not include names or account 

numbers and that users follow their organization’s policies regarding retention, storage, and disposal of documents that contain 

personal information.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 69

Tool 3:

Buying a car

Next to buying a home, the cars people buy are the 

largest purchases many of them will make

throughout their lives. In fact, auto loans are the 

third largest category of household debt, behind 

mortgages and student loans.

When you buy a car, you can:

§ Pay for it in cash

§ Borrow money to pay for it and pay it back 

over time 

If you choose to borrow money to pay for it, you can get an auto loan from:

§ Credit unions

§ Banks

§ Finance companies

§ Car dealers

When you borrow money with an auto loan, you will pay more for the car because of the interest 

and fees on the loan. The amount of interest and fees (the annual percentage rate, or the APR) 

you will pay on a loan may depend on: 

§ Your credit history

§ Your credit score

§ The price of the car you are buying

Depreciation

Depreciation is the gradual decrease 

in the value of an asset. Assets are 

things that you own that have value. 

A car is an example of an asset. Every 

year that you own a car, it is worth 

less because of wear and tear. 

3
70 MODULE 1: SETTING GOALS

 TOOL 3: BUYING A CAR

APRs are lower for people with positive credit histories and high credit scores. The APR is also 

generally lower when you buy a new car. 

Shop for a car loan before shopping for a car

When you decide to buy a car, you can check with several banks, credit unions, or other lenders 

to get a pre-approved loan. Get that pre-approval before you go to buy a car and take the preapproval with you when you go shopping. Having a loan offer in-hand when you shop for the car 

puts you in a strong position. 

Some people have concerns that shopping around for a loan will have an impact on their credit 

score. For most people, concentrating your applications in a short period of time can minimize 

the effect on your credit score. Any negative effect will be small while the benefits of shopping 

around could be big. 7

When comparing loans, make sure you’re comparing all the terms. If you get competing offers 

from different lenders, including a dealer who offers you financing, you should take a close look 

at each of the loan terms, including the amount financed and the length of the loan. Some 

lenders may tell you they can tailor the monthly payments to suit your budget, but lower 

monthly payments could involve extending the lifetime of the loan. That could mean you still 

owe on this car when you are ready for your next one.

Deciding on a down payment

When it comes to buying a car, making a down payment can reduce the amount of interest you 

pay because you are reducing the amount you have to finance. Here is an example:

Austin can get a reliable used car for $12,000. He has saved $2,000 for the down payment, 

but one of his friends has suggested that he finance the full amount of the car. 

For a 4-year (48-month) loan at 4 APR for the full $12,000 cost of the car, Austin would 

pay 270.95/month and pay $1,005 in interest over the life of the loan.

 

7 See Module 7: Understanding credit reports and scores for information on how credit scores are calculated.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 71

If Austin made a $2,000 down payment, he would only have to borrow $10,000. His 

monthly payment would be $225.79, and he would pay $837.95 in interest. His monthly 

payment would be more than $45 less than the monthly payment if he borrowed the full 

amount for the car. Over 4 years, this lowers his monthly expenses by $2,160. This includes 

the $2,000 he made as a down payment and a savings of almost $170 in interest. 

Down payment Amount borrowed Monthly payment for 

48 months

Interest paid over life 

of loan

$0 $12,000 $270.95 $1,005.00

$2,000 $10,000 $225.79 $837.95

Decrease in monthly 

expenses and 

interest savings with 

$2,000 down 

payment

$45.16/month $167.05 over 4 years

Get the big picture

It is important to do your research before buying a car. Getting a good price on a car and 

considering the monthly costs of owning a car can help lessen your debt load and improve your 

cash flow. Some widely recognized independent sources such as the National Automobile 

Dealers Association or Kelley Blue Book offer resources that can help you compare the cost of 

purchasing, owning and operating a vehicle. It may make sense to pay a little more for a car with 

consistently lower operating and ownership costs, because it may save you money over the long 

term.

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 
72 MODULE 1: SETTING GOALS

 TOOL 3: BUYING A CAR

Resources

For estimates on the value of a vehicle and its cost of ownership:

National Automobile Dealers Association:

http://www.nadaguides.com

Kelley Blue Book:

http://www.kbb.com

If you would like help managing debt or rebuilding credit, visit the National Foundation for 

Credit Counseling:

http://www.nfcc.org

Housing counselors can provide advice on buying a home, renting, defaults, foreclosures, 

and credit issues:

www.consumerfinance.gov/find-a-housing-counselor

For additional resources, visit the Consumer Financial Protection Bureau website:

http://www.consumerfinance.gov/askCFPB

If you have a consumer complaint, visit:

http://www.consumerfinance.gov/complaint

The Consumer Financial Protection Bureau (CFPB) has prepared this material as a resource for the public. This material is provided 

for educational and information purposes only. It is not intended to be a replacement for the guidance or advice of an accountant, 

certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or actions of the 

individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are limited to the 

materials that the CFPB has prepared.

v
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 73

MODULE 2:

Saving for emergencies,

goals, and bills

Savings is money you set aside today to use in the future. Sometimes it’s for something people 

know they will need soon, and sometimes it’s for something that won’t happen for several years.

People save for many reasons:

§ Unexpected expenses and emergencies

§ A bill they know will be due every few months, like car insurance

§ Annual expenses like children’s school supplies

§ Their own goals, like a new TV, appliances, a home, their children’s education, and 

retirement

Emergency savings

Everyone has unexpected expenses and emergencies – a suddenly needed car repair, the need to 

travel to help a sick family member in another state, paying the bills when you’ve had a cutback 

in hours or even lost your job. 

When you save for unexpected expenses and emergencies in advance, you can handle them 

when they happen without having to skip paying your other bills or borrow money. When you 

have to skip paying other bills to pay for an emergency, you often pay late fees. And if it results 

in loss of service (your utilities are shut off, for example), then you have to come up with even 

more money to turn them back on. 
74 MODULE 2: SAVING FOR EMERGENCIES, GOALS, AND BILLS

When you borrow money, you have to pay fees and sometimes interest. And on top of that, you 

will probably have to use some of your income going forward to pay back the money you borrow. 

So saving money now for unexpected expenses and emergencies can save you 

money later.

Emergency fund

An emergency fund or a rainy day fund can be an important part of your savings plan. 

Having your own money set aside to cover unexpected expenses can save you money, 

because you won’t pay interest, fees, or other costs that come from borrowing the money 

you need.

How much should you save? Start with $500 as your goal.8 This is enough to cover a lot of 

common emergencies: many car repairs, a plane ticket to care for a sick family member, 

or to pay minor medical costs. Once you reach $500, consider reaching for $1,000. This 

may be enough to cover your rent if you lose your job, take care of major car repairs, and 

pay for many household repairs.

Other reasons to save

It is also important to save for periodic expenses—those that come only once or a few 

times a year such as renter’s insurance, income taxes, automobile insurance, and children’s 

school supplies. While not unexpected, they can still surprise you.

Saving money is particularly important for people whose income fluctuates, or 

varies. An hourly worker who is not guaranteed a fixed number of hours per week has 

fluctuating income. Someone who is employed seasonally—receiving income for only eight out 

of twelve months because work stops—has fluctuating income, too.

 

8 While the target amount for an emergency fund will vary from person to person based on their needs, $500 to 

$1,000 has been suggested as a starting point. See http://www.AmericaSaves.org
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 75

Regular saving while you’re earning income is crucial to ensuring that you can pay your 

expenses and bills on time and in full when your income is lower than expected or stops for a 

period of time.

But knowing it is important to save and actually saving are two different things altogether. 

That’s why it’s important to learn how to save.

Getting started

Anyone who has tried to save knows that setting money aside isn’t as easy as it sounds. First, 

you have to make the decision to save. Then you also have to find the money to save. There are 

basically only two ways to find money to save:

§ You can decrease spending on one item or many things. Then put that 

money “not spent” into savings. The easiest way to find a chunk of money to save is to 

cut one major cost. This may mean dropping a service you’re paying for but may not be 

using very often, or cutting back on television services (from premium cable service to 

basic) or phone service (from unlimited texts and calling to a limited or prepaid plan). 

§ If there are not “major costs” to cut, you may have to cut back a little bit in several 

different categories of spending—cutting out one meal out per month and consolidating 

errands to spend less on gasoline. 

§ But the big challenge is turning the money you’ve saved by spending less 

into savings. You have to move that money you have saved by not spending into a 

savings jar in your home and then into a savings account at a bank or credit union or a 

savings bond. If you don’t have a place to set it aside, it can be easy to spend it instead of 

save it.

§ You can also increase your income. This can mean taking another part-time job or 

ensuring you file your taxes and claim tax credits you qualify for. For example, you can 

save your tax refund for emergencies or unexpected expenses, set it aside for annual 

expenses (back to school or holiday shopping), use it to pay down debts, use it to take 

care of car repairs, or set aside for household maintenance. Again, you must make sure 

that some of that new income gets moved into the place you have decided to save it. 
76 MODULE 2: SAVING FOR EMERGENCIES, GOALS, AND BILLS

§ Information in Module 3, Tool 4: Increasing your income through tax credits explains 

the Earned Income Tax Credit (EITC) and the Child Tax Credit and how they can help 

you increase the income you have available to pay bills, pay down debt, or save for your 

goals. 

Making savings automatic

If you receive a regular paycheck, one way to build savings is through direct deposit into a bank 

account or onto a payroll card or by setting up a system of savings.

§ Using direct deposit saves you both time and money. You don’t have to get your 

check cashed to use it. And the funds are generally available as soon as they are 

deposited. That means you get paid on time, even if you aren’t working on payday, and 

that you get paid at the start of the payday, not the end of the day.

§ If you have a bank account, you can arrange to have some of the deposited 

money moved automatically to a savings account. If your weekly paycheck of 

$245 is directly deposited into your checking account every week, you can have $10 

automatically transferred into a savings account. Once you set this system up, you may 

forget about that $10. And by the end of the year, you will have over $500 in that 

account.

If your employer allows you to split your direct deposit, consider putting some of your paycheck 

into savings and the rest into your checking account for your bills and other expenses. 

Some payroll cards have a savings or “purse” feature. This feature lets you set aside some of your 

paycheck on the card for savings. Ask your employer about the specific features of your payroll 

card. When you do, be sure to ask about the card’s fees.

People who save successfully generally choose a system of saving for their goals. These can 

include savings for their children’s education and for their own retirement expenses. They make 

the decision one time, set up the system, and then they save money from every paycheck without 

having to think about it. If your income is seasonal or fluctuates, however, there may be times 

you need to temporarily decrease the amount of savings that is automatically deposited from 

your paycheck. 
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 77

Check with your employer to learn more about direct 

deposit and other options for automatically saving 

some of your paycheck. This can help you be ready 

for long-term expenses or for those weeks or months 

you income stops or is less than you planned because 

of seasonal changes in the availability of work.

You can use Tool 1: Savings plan to figure out why 

you need to save, how much you need to save, and 

how you can start to find the money to 

save.

Savings and public benefits

If you are receiving public benefits, you may want to know about asset limits. Asset limits are 

rules about how much you can have in assets before your benefits are reduced or eliminated. 

Different benefits have different limits.

Assets are things you own that have value. Your money in a savings or checking account is an 

asset. A car, home, business inventory, and land are examples of assets, too. 

Assets help you build financial security for you and your family. But if you receive public 

benefits, some of your assets may affect the benefits you receive. Generally, the assets 

that may be counted when applying for benefits are “liquid” – money in checking accounts, 

savings accounts, and investment accounts are examples of liquid assets. If you own your own 

home or a car, these assets will generally not count against qualifying for benefits.

You can use Tool 2: Benefits and asset limits to figure out the asset limits of the benefits you 

receive. This can help you save without unexpectedly losing your benefits.

A safe place to save

Setting aside money to save can be hard. It’s important to understand the risks and the benefits 

of each of the places you can put the money until you want or need to use it. As you consider the 

Asset limits and savings

Even if you receive public benefits, 

you can generally have some savings. 

Savings are important for building 

your financial stability. Knowing your 

state’s asset limits can help you make 

a savings plan.

3
78 MODULE 2: SAVING FOR EMERGENCIES, GOALS, AND BILLS

options, be aware of the potential costs of each financial product. Tool 3: Finding a safe place to 

save can help you identify where you’d like to keep your savings. 

Federal insurance for financial institutions

Two organizations established by the federal 

government ensure that the money people deposit 

in banks or credit unions will be there when they

want to withdraw it. The Federal Deposit 

Insurance Corporation (FDIC) insures money in 

banks. The National Credit Union Administration 

(NCUA) insures money in credit unions.

In general, the limit is $250,000 per depositor, per 

insured institution. So, if you have no more than 

$250,000 in a savings account in an insured bank 

and the bank fails, you will get all your money 

back. FDIC and NCUA do NOT insure money that 

people use to buy stocks, mutual funds, life 

insurance policies, annuities, or other securities, 

even if they are purchased from a bank or credit 

union.

Your banking history report

If you are considering opening a savings account, it’s important to understand the impact that 

your banking history report may have on the type of account you may be able to open. 

When you complete the application to open an account at a bank or credit union, they often 

contact specialty consumer reporting agencies that have information on checking account 

history. Banks and credit unions contact companies like ChexSystems, TeleCheck, Early 

Warning, and others like them to find out if you have had prior difficulties using a checking 

account, including writing bad checks or suspected fraud.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 79

These agencies collect information about how consumers manage savings and checking 

accounts. They do this for financial institutions that are a part of their network. Financial 

institutions then use the information to assess the risk of opening an account for a specific 

person based on his or her past history of managing similar accounts. 

The report includes:

§ Information about the accounts, such as routing transit number and/or account number

§ The date information was reported about an account

§ The reason for the report 

§ Information on returned checks from retailers and other businesses that is reported to a 

reporting agency such as SCAN (Shared Check Authorization Network)

If you are denied a checking account based in whole or in part on a report from any of these 

specialty consumer reporting agencies, you have the right to a free disclosure of certain 

information in your file from the agency. The notice you receive from the bank or credit union 

will give you the name, address, and phone number of the consumer reporting company and 

how you can contact it to obtain your free disclosure. 
80 MODULE 2: SAVING FOR EMERGENCIES, GOALS, AND BILLS

Finding and fixing mistakes in your banking history report

If you find mistakes in your banking history report, you can dispute them by sending a 

letter (you may choose to use regular or certified mail) describing the mistake and 

including copies of any evidence. 

You can order your own free ChexSystems report online at 

http://www.consumerdebit.com, call for more information at (800) 428-9623, or send a 

written request to: 

Chex Systems, Inc.

7805 Hudson Road, Suite 100

Woodbury, MN 55125.

You can request your annual file disclosure from TeleCheck Services by calling 

(800) 366-2425. You can order your TeleCheck Services Report by sending a written 

request and include a daytime phone number, a copy of your driver’s license, your Social 

Security number, and a copy of a voided check to:

TeleCheck Services, Inc.

Attention: Consumer Resolution – FA

P.O. Box 4514

Houston, TX 77210-4515.

To request your Early Warning report, call (800) 325-7775.

Savings plan

Did you know that most people in the U.S. don’t have enough savings to cover a $1,000 

emergency?9 Whether you have low income or high income, most people can expect around 

 

9 Dickler, Jessica. Most Americans can’t afford $1000 in emergency expenses. http://money.cnn.com.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 81

$2,000 worth of unexpected or emergency expenses in a year.10 These unexpected expenses 

include medical bills that aren’t covered by insurance, auto repairs, home and appliance repairs, 

and bills that you still have to pay if you lose your job are the most common. 

A savings plan includes:

The reasons you are saving. This could include one of your goals, an emergency fund, 

money to pay for your automobile insurance in three months, or to ensure you have enough 

money set aside for back to school expenses.

The total amounts you need to save. Your savings plan will help you come up with an 

amount of money you can save every month to reach all of your savings goals. 

How you are going to find that money to save. These are the specific strategies you are 

going to use to find money you want to set aside to save. Most people find they have to make 

choices about cutting back on one expense (or more) to have the money to save for something 

else. Or they have to figure out a way to get more income. If you have a regular paycheck, 

another strategy is using direct deposit or transferring a set amount into a savings account each 

time you get paid. And, if you usually receive a tax refund, you might want to build a plan to save 

part of your refund. Module 3, Tool 4: Increasing your income through tax credits explains the 

Earned Income Tax Credit (EITC) and the Child Tax Credit and how they can help you save for 

your goals.

Where you are going to put that savings. You have to work hard to save money. You want 

to make sure you put it in a safe and secure place. An important part of your savings plan is 

deciding where you will put the money you have saved.

What are the benefits of a savings plan?

§ Your plan builds your own personal safety net one paycheck at a time.

§ As you build savings, you can have peace of mind knowing you have a little set aside for 

the unexpected or emergencies.

 

10 Consumer Federation of American, www.consumerfed.org.
82 MODULE 2: SAVING FOR EMERGENCIES, GOALS, AND BILLS

§ As you watch small amounts add up, you’ll move closer to reaching your goals and 

almost always pay less than when you use credit and rent-to-own.

§ And, you’ll save money by avoiding late fees, interest charges, and other costs related to 

not covering expenses or borrowing money. And when you avoid borrowing, you don’t 

have to commit future income to paying off your debt. 

Here is an example scenario using different options for taking care of emergency expenses. The 

example examines the costs of paying for an unexpected expense with emergency savings, a 

credit card, or a payday loan. 
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 83

COST TO REPLACE SPARK PLUGS ON YOUR AUTOMOBILE = $350.

Emergency 

savings

Credit card Payday loan

Amount $350 $350 $350

APR11 21.99% annual percentage rate 

(APR)

$15 for every $100 borrowed for 14 days. 

This means a 391% annual percentage 

rate (APR).12

Payment

Must pay at least a certain 

amount each month.13 (For the 

purposes of the example, the 

individual is choosing a fixed 

monthly payment of $50.)

Must pay back loan amount ($350) plus 

fee ($52.50) within 14 days. If entire loan 

cannot be paid within 14 days, it can be 

rolled over (or extended) for another 14 

days for an additional fee of ($52.50).14

Total

additional

cost and 

time to 

repay

$0

You would pay $28.11 in 

interest in addition to the 

principal borrowed. It will take 

just over eight months15 to pay 

back the full amount.

The total cost depends on how long it 

takes you to save up to pay back the 

entire loan. If you renew or roll over this 

loan seven times, you would be in debt for 

14 additional weeks and could pay up to 

$367.50 in fees.16

 

11 These are for example purposes only. Actual credit card and payday loan terms vary, and some states restrict 

payday loans. The CFPB notes that, APRs on credit cards can range from about 12 percent to 30 percent. For payday 

loans, the CFPB notes that the cost of the loan (finance charge) may range from $10 to $30 for every $100 borrowed. 

A typical two-week payday loan with a $15 per $100 fee equates to an APR of almost 400%. See CFPB, What is a 

payday loan? November 6, 2013. See http://www.consumerfinance.gov/askcfpb/1567/what-payday-loan.html. 

12 Some states have laws that limit the amount of loan and/or limit the interest rates of these loans.

13 Most credit card companies allow customers to pay a percentage of the amount owed, which makes the minimum 

payment vary from month to month. For the purposes of this example, we are showing a fixed monthly payment.

14 These numbers and terms are for example purposes only. Actual costs and terms of payday or signature loans will 

vary. See Consumer Financial Protection Bureau, Payday Loans and Deposit Advance Products: A White Paper of 

Initial Data Findings, April 24, 2013. See http://files.consumerfinance.gov/f/201304_cfpb_payday-dapwhitepaper.pdf.

15 To pay off this credit card balance in full, the individual will have to make $50 payments for seven months, and 

then pay just over $28 in the eighth month.

16 Two–thirds of repeat payday borrowers take more than seven loans in one year. Consumer Financial Protection 

Bureau, Payday Loans and Deposit Advance Products.
84 MODULE 2: SAVING FOR EMERGENCIES, GOALS, AND BILLS
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 85

Saving for education

Individuals with children may want to work toward making a better life for them. Saving for 

children’s postsecondary education or training may be one of their financial goals, because they 

see it as a path to “a better life.” Training and education after high school graduation (including 

completion of a General Education Development test or GED) can be an important investment 

of both time and money. It is likely to lead to higher wages on average, less chance of 

unemployment, and a greater chance for financial security.

FIGURE 1: MEDIAN WEEKLY EARNINGS, 2012

Source: Bureau of Labor Statistics, Employment Projections. Education Pays..., accessed April 2014. See 

http://www.bls.gov/emp/ep_chart_001.htm.

Saving for children’s education can help pay for the increasing costs of training and education 

after high school. Money saved for education can also reduce the amount of money that must be 

borrowed and may increase the number of options children have for schooling after high school. 

There are many financial products geared toward helping people save for children’s education, 

but the first step is setting a goal and setting aside money specifically for it. 

 $- 

 $500 

 $1,000 

 $1,500 

 $2,000 
86 MODULE 2: SAVING FOR EMERGENCIES, GOALS, AND BILLS

Once someone has done this, he can save for postsecondary education in a savings account, a 

certificate of deposit, or an investment option designed specifically to help people save for 

postsecondary education. One option is a 529 college savings plan. These are tax-advantaged 

savings plans designed to help parents, guardians, and grandparents save for children’s 

education.

For more information on saving for college using a 529 Plan, visit www.collegesavings.org.

Savings accounts for children

People who want to teach their children about saving may be able to start a savings 

account for their children. Each financial institution has its own policies, so research both 

local and online bank and credit union options.

What are the benefits of opening a savings account for a child?

§ Providing a safe place for a child to put money earned or received as gifts

§ Introducing a child to saving and using financial services

§ Helping a child to build assets and learn to plan for the future
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 87

Tool 1:

Savings plan

This tool can help you make a plan to save money for:

§ Your goals

§ Expenses

§ Unexpected expenses and emergencies

There are two steps to making a savings plan. First, answer the set of questions below to see if 

setting up an emergency fund or rainy day fund may be right for you.

If yes, complete the savings plan using the worksheet that follows. To complete this worksheet, 

you will need to know:

§ Your savings goals. If you haven’t set these, consider using the information and tools 

in Module 1: Setting goals.

§ Strategies you can use for saving money. The worksheet encourages you to be as 

specific as possible. See the example in the worksheet to get started. 

§ Where you will put the money you save.
88 MODULE 2: SAVING FOR EMERGENCIES, GOALS, AND BILLS

 TOOL 1: SAVINGS PLAN

Is an emergency fund or rainy day fund right for you?

Answer the following questions to see if setting up an emergency fund or rainy day fund

may be right for you and your family.

Goals: Do you have the savings needed to reach your goals? Yes No

Expenses: Do you have money set aside for expenses that come one to 

four times per year?

For example, automobile insurance, renter’s insurance, tools for your trade, 

back to school expenses, birthdays, holidays (gifts, special food, etc.)

Yes No

Unexpected Expenses and Emergencies: Do you have money set aside 

for unexpected expenses or emergencies?

For example, a flat tire or other car trouble, medical expenses, need for a 

new appliance, job loss

Yes No

Living expenses for months or weeks with no income or income that is 

less than expected: Do you have money set aside to cover your living 

expenses during the months you will be earning little or no income?

Yes No

If you answered no to any of these questions, developing a savings plan may be a 

great next step for you.

8
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 89

For questions above to which you answered “no,” how do you pay for goals, 

expenses that come one to four times each year, and unexpected expenses and 

emergencies? Check all that apply to you.

____ I don’t know. It just seems to work out.

____ I don’t pay other bills to cover the emergency or unexpected expense.

____ I borrow money from other family members or friends.

____ I get a payday loan.

____ I get cash through a pawn shop.

____ I use a credit card.

____ I use a refund anticipation loan (RAL).

____ I use my tax refund.

____ I use a car title loan.

____ I ask people who owe me money to pay it back.
90 MODULE 2: SAVING FOR EMERGENCIES, GOALS, AND BILLS

 TOOL 1: SAVINGS PLAN

Savings plan17

Name _________________________________________ Date ______

Savings 

goal

Total 

amount 

needed

Months 

to reach 

goal

Monthly

amount

to save

Strategies for saving

Amount 

saved 

per 

month

Safe and 

secure 

place for 

savings

Example: To 

save $1,000 

in an 

emergency 

fund within 

10 months.

$1,000 10 $100

Cut back to basic cable $40 Savings 

account 

at a bank 

or credit 

union. 

Will 

generally 

require a 

minimum 

deposit

Cut out one fast food meal 

per week for family $60

Total saved per month $100

Once you have your savings plan, be sure to add it into your cash flow budget. For 

more information on cash flow budgets, see Module 5: Getting through the month. 

For more information on setting up an account to save in, see Module 8: Money

services, cards, accounts, and loans: Finding what works for you.

 

17 This table refers to a monthly savings plan. Irregular savings deposits as well from such places such as Federal and 

State EITC returns can also be entered as a one-time deposit. An example could include depositing $200 of a 

$2,000 EITC return.

8
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 91

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 

This Tool may ask you to provide sensitive personal and financial information. The CFPB does not collect any information from you 

or the organization using this Tool. The CFPB is not responsible and has no control over how others may use the information that 

you provide to them about your personal or financial situation. The CFPB recommends that you do not include names or account 

numbers and that users follow their organization’s policies regarding retention, storage, and disposal of documents that contain 

personal information.
92 MODULE 2: SAVING FOR EMERGENCIES, GOALS, AND BILLS

 TOOL 1: SAVINGS PLAN
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 93

Tool 2:

Benefits and asset limits

If you are receiving public benefits, you may want to 

complete this tool to know how your savings might 

affect your benefits.

Assets are things you own that have value. Your 

money in a savings or checking account is an asset. 

A car, home, business inventory, and land are 

examples of assets, too. 

Assets help you build financial security for you and your family. But if you receive public 

benefits, some of your assets may affect the benefits you receive. Generally, the assets 

that may be counted when applying for benefits are “liquid.” They include money in checking 

accounts, savings account, and investment accounts. If you own your own home or a car, these 

assets will generally not count against qualifying for benefits. In some states, however, if a car 

exceeds a set value, the amount over that value may be counted.

If you have saved money from the Earned Income Tax Credit, this savings is generally not 

counted against your limit for up to 12 months.

Do you receive public benefits?

For example, food stamps (SNAP), cash assistance (TANF), Supplemental 

Security Income (SSI), Medicaid, etc.

Yes No

If you answered “yes” to the question above, you may want to review the following tool.

It important to note that some benefits are federal, and some benefits come from the state. Be 

sure you find out the rules that apply to the benefits you get in your state.

Please note that rules regarding benefits change regularly, so check this annually 

to ensure accuracy.

Asset limits and savings

Even if you receive public benefits, you 

can generally have some savings. 

Savings are important for building 

your financial stability. 

3
94 MODULE 2: SAVING FOR EMERGENCIES, GOALS, AND BILLS

 TOOL 2: BENEFITS AND ASSET LIMITS

Benefits and asset limits list

Benefit18,19

Do 

you 

have 

this?

Asset limits Contact and other information

SNAP20

Supplemental 

Nutrition 

Program, also 

called Food 

Stamps

While the states have discretion, 

the Federal Asset Limits for 

SNAP benefits are up to $2,000 

in countable resources (bank 

account) or $3,250 if one 

household member is over 60 or 

disabled.

21

States using broad-based 

categorical eligibility have no 

asset limits.22 This means that if 

an individual qualifies for TANF, 

SSI, or General Assistance, he 

or she automatically qualifies for 

SNAP.

To get information about SNAP 

benefits in your state, call your 

state hotline number. You can find 

the hotline number by visiting:

http://www.fns.usda.gov/snap/stateinformationhotline-numbers

 

18 This information is current as of November 2014 and pertains to 2014.

19 United States Department of Agriculture Food and Nutrition Service. See http://www.fns.usda.gov/snap/eligibility.

20 In general, only your liquid assets – like cash or money in savings or checking account – are counted. This means 

that you may still be eligible to receive benefits even if you own a home or, sometimes, a car. Whether an asset 

counts against the limit depends on the program and the state.

21 Certain resources are NOT counted, such as a home and lot, the resources of people who receive Supplemental 

Security Income (SSI), the resources of people who receive Temporary Assistance for Needy Families (TANF, 

formerly AFDC), and most retirement (pension) plans. The procedures for handling vehicles are determined at the 

state level. See United States Department of Agriculture Food and Nutrition Service,

http://www.fns.usda.gov/snap/eligibility.

22 States have the option to enroll people using broad-based categorical eligibility. This effectively eliminates the asset 

test specifically for SNAP because people are enrolled based on their enrollment in other programs. See 

http://www.fas.org/sgp/crs/misc/R42054.pdf. See also United States Department of Agriculture Food and 

Nutrition Service, http://origin.www.fns.usda.gov/snap/rules/Memo/BBCE.pdf.

8
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 95

Benefit18,19

Do 

you 

have 

this?

Asset limits Contact and other information

TANF -

Temporary 

Assistance 

for Needy 

Families

$1,000 to $3,000 in most states. 

Nevada’s limit is $6,000.23

Colorado, Illinois, Ohio, 

Louisiana, Alabama, and 

Virginia have eliminated asset 

tests for TANF eligibility.

To find out more about your state 

or tribal TANF program, visit: 

http://www.acf.hhs.gov/programs/of

a/help

SSI -

Supplemental 

Security 

Income

$2,000 if single

$3,000 if married

To find out more about SSI or to 

apply for benefits, visit: 

http://www.socialsecurity.gov/agenc

y/contact/ to get the contact 

information for your local Social 

Security Administration Office

SSDI

Social 

Security 

Disability 

Insurance

No asset limits

To find out more about SSI or to 

apply for benefits, visit: 

http://www.socialsecurity.gov/agenc

y/contact to get the contact 

information for your local Social 

Security Administration Office

Public 

Housing

Generally, only the income from 

assets is counted.

To find out more about public 

housing options and eligibility, 

contact your local housing office:

http://portal.hud.gov/hudportal/HUD

?src=/states

Rental 

Assistance

In addition to income requirements, 

these programs may have asset 

limits that are considered for 

eligibility.

 

23 Nevada increased its limit to $6,000 in 2014. https://dwss.nv.gov/TANFFacts.html#DWSSresources
96 MODULE 2: SAVING FOR EMERGENCIES, GOALS, AND BILLS

 TOOL 2: BENEFITS AND ASSET LIMITS

Benefit18,19

Do 

you 

have 

this?

Asset limits Contact and other information

Low Income 

Energy 

Assistance 

Program 

(LIHEAP)

Some states and tribal 

governments use categorical 

eligibility for LIHEAP. This 

means if someone in the 

household receives TANF, SSI, 

or SNAP, they are eligible for 

LIHEAP benefits.

While most states do not have 

asset limits, where they exist 

they range from $2,000 to 

$5,000.

To find out about your state or tribal 

LIHEAP, visit: 

http://www.liheap.ncat.org/snapshot

s.htm

Other Energy 

Assistance 

Programs

Family 

Medicaid24

No asset limit test due to 

Affordable Care Act Regulations 

that took effect in 2014.

To find out more about your state’s 

Medicaid program, visit: 

http://www.medicaid.gov/medicaidchip-program-information/bystate/by-state.html

State Child 

Health 

Insurance 

Program

(SCHIP or 

CHIP)

No asset limit test in most 

states; contact state 

administrator for details.

To find out more about your state’s 

CHIP program, visit: 

http://www.medicaid.gov/medicaidchip-program-information/bystate/by-state.html

Other:

 

24 See https://www.federalregister.gov/articles/2012/03/23/2012-6560/medicaid-program-eligiblity-changesunder-the-affordable-care-act-of-2010#h-28.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 97

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 

This Tool may ask you to provide sensitive personal and financial information. The CFPB does not collect any information from you 

or the organization using this Tool. The CFPB is not responsible and has no control over how others may use the information that 

you provide to them about your personal or financial situation. The CFPB recommends that you do not include names or account 

numbers and that users follow their organization’s policies regarding retention, storage, and disposal of documents that contain

personal information.
98 MODULE 2: SAVING FOR EMERGENCIES, GOALS, AND BILLS

 TOOL 2: BENEFITS AND ASSET LIMITS
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 99

Tool 3:

Finding a safe place for 

savings

Setting money aside can be hard. It often means you have to cut back on spending somewhere 

else. For example, you might have given up premium cable or satellite dish service for basic. Or 

you have found a way to earn more income. You have taken on another part-time job, or you 

received a tax refund. 

Once you have set money aside, you need to find a safe place to store that money. Even though it 

has some drawbacks, a secret place in their home may feel like a safe place for some people. For 

other people, it may be an account in a bank or credit union.

If you do not know where to put your money or want to make sure the place you have chosen is 

safe, use the following tool. Think about the benefits and risks of each option. There are some 

benefits and risks of each option listed already to get you started.

Safe place 

to keep 

your 

money

Benefits Risks Other important 

information

A secret 

place in 

your home

No costs to maintain it

Easy to access

Convenient

Can be lost, stolen or 

destroyed in a fire or natural 

disaster

Might put you at risk of a 

home invasion crime

With a 

family 

member or 

friend

No costs to maintain it

Can be lost, stolen or 

destroyed in a fire or natural 

disaster

Might put your friend or 

family member at risk of a 

home invasion crime
100 MODULE 2: SAVING FOR EMERGENCIES, GOALS, AND BILLS

 TOOL 3: FINDING A SAFE PLACE FOR SAVINGS

Safe place 

to keep 

your 

money

Benefits Risks Other important 

information

On a 

prepaid 

debit card 

(stored 

value card)

Easy to access

Convenient

No bank or credit union 

account needed

May have fees for activation, 

loading funds, using the 

card, etc.

May not be insured for you or 

have the same protections 

from loss or theft as a 

savings account if the card or 

PIN are lost or stolen.

Check the card 

agreement to ensure 

that you understand 

the fees and whether 

you have protection 

from loss or theft.

In a 

federally 

insured 

savings or 

checking 

account

If the institution is 

federally insured, up to 

$250,000 per depositor 

is protected. 

Unlike cash, the money 

cannot be lost, stolen, or 

destroyed in a fire or 

other disaster.

You can generally get it 

back if someone steals it 

by using your ATM or 

debit card.

May be charged fees if you 

do not follow the rules for the 

account, such as having to 

keep a minimum balance to 

avoid a monthly fee.

You may not be able 

to open an account for 

a period of time if you 

have had an account 

closed because of 

unpaid account fees 

and debts in the last 

five years.

Be sure you 

understand any 

monthly fees and other 

fees.

U.S. 

Savings 

Bonds

The money cannot be 

lost or destroyed in a fire 

or other disaster. If you 

have a paper bond, the 

funds can be recovered 

The rate is guaranteed 

for the length of the 

bond.

You lose some of the interest 

if you cash the bond before it 

matures.

Other

Based on this information, the best place for me to keep my savings is: ________.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 101

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 

Resources

For additional resources, visit the Consumer Financial Protection Bureau website:

http://www.consumerfinance.gov/AskCFPB

If you have a consumer complaint, visit:

http://www.consumerfinance.gov/complaint

The Consumer Financial Protection Bureau (CFPB) has prepared this material as a resource for the public. This material is provided 

for educational and information purposes only. It is not intended to be a replacement for the guidance or advice of an accountant, 

certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or actions of the 

individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are limited to the 

materials that the CFPB has prepared.

v
102 MODULE 2: SAVING FOR EMERGENCIES, GOALS, AND BILLS

 TOOL 3: FINDING A SAFE PLACE FOR SAVINGS
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 103

MODULE 3:

Tracking and managing

income and benefits

Income 

Income is the money that comes into your household. You use income to pay for the things you 

need and want. You get income from part- or full-time work, self-employment, and investments. 

You can also get income in the form of gifts from others, tax refunds, or even inheritance. 

Income can be regular. This means it comes into your household on a schedule and in an 

amount that you can count on. It can also be irregular. This means you cannot predict exactly 

when you will receive it or how much you will receive. These ups and downs can make it hard to 

be sure that you’ll have money to pay your bills and have enough on hand for expenses like food 

and transportation.

Sometimes income is seasonal. You may receive it for only some months out of the year. For 

example, if you work in the building industry, you may be very busy with work from March 

through November, but not working at all from December through February, especially if you 

live in a northern state. Finally, income may be a one-time occurrence. Your tax refund is an 

example of a one-time source of income within a year.

When you don’t know how much money is coming in or when it’s coming in, managing income 

can be very challenging. Even when income is irregular, seasonal, or one-time, your bills and 

expenses will continue. Rent will be due every month even if the income does not come in. 

It can also be hard to plan to use irregular, seasonal, or one-time income to cover expenses in 

the months you may not have income. When you have the money, you may need or want to 

spend it rather than setting it aside for bills and expenses in other months.
104 MODULE 3: TRACKING AND MANAGING INCOME AND BENEFITS

You can use Tool 1: Income tracker to get a picture of your income. It is the first step in 

planning how you can manage your income differently to cover spending in months you may not 

have income. This is also an important step in creating a cash flow budget, which is explained in 

Module 5: Getting through the month.

If you find that your income is less than you need or want, you can use Tool 2: Ways to increase 

income and resources.

Deductions from your pay

There are two kinds of deductions you may have from your pay:

§ Mandatory, which means they must be taken out

§ Voluntary, which means they may be optional

Mandatory deductions include:

§ Federal income tax

§ Social Security, which is part of FICA (Federal Insurance Contributions Action). 6.2% of 

your pay is held for Social Security with your employer contributing another 6.2% on 

your behalf.

25

§ Medicare, which is also a part of FICA. 1.45% of your paycheck is withheld for Medicare

with your employer contributing another 1.45% on your behalf.

§ State income tax (in most states)

§ Local taxes (in some communities)

§ In some cases, wage garnishments

Voluntary deductions may include:

 

25 FICA and Medicare contributions are accurate as of November 2014.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 105

§ Employee share for health, dental, and/or vision insurance

§ Employee contributions to employer-sponsored retirement (401K or 403B plans)

§ Union dues

§ Employee contributions to life insurance premiums

§ Charitable contributions

Wage garnishments 

A wage garnishment involves a deduction from your pay. The best way to avoid the problems 

garnishment can cause is to pay your bills on time. But if you do face garnishments, it’s 

important to understand how it works.

§ If you’ve been sued for an unpaid debt and a court orders you to pay it, the creditor may 

work with you to create a plan to pay it. They may, however, seek payment from your 

assets (real estate, vehicles, bank accounts, future wages, etc.) This can involve the forced 

sale of, for example, your house or car. A common way for a creditor to collect an unpaid 

debt is to garnish your wages. Garnishment is a tool that can be used to collect an unpaid 

debt directly from your wages or from your bank account. 

Garnishment of wages

§ A wage garnishment allows a creditor to get paid for debts you owe directly from the 

wages your employer pays to you.

§ If the creditor you owe money to is not a government (such as a credit card company or a 

doctor or hospital) the creditor may sue you on the debt, and then get a court order to get 

paid directly by your employer from your wages. There are federal limits to how much of 

your paycheck the creditor can take. There may also be additional state limits.

Generally, federal law limits the amount that can be garnished from your wages to whichever of 

the two following formulas comes out to the smaller amount:

• 25% of disposable income

or 
106 MODULE 3: TRACKING AND MANAGING INCOME AND BENEFITS

• The amount that a person earns each week over the amount that equals the federal 

minimum wage times 30 (for example, $7.25 X 30 = $217.50).26

In other words, if someone earns $300 a week:

• 25% of their disposable income would be $75.00

• The amount that person earned each week over the amount that equals the federal 

minimum wages times 30 would be $82.50 

o Minimum wage ($7.25) x 30 = $217.50

o $300 - $217.50 = $82.50

In this example, only $75.00 could be garnished because $75.00 is less than $82.50.

All mandatory deductions are protected from garnishment outright including:

§ Federal, state and local taxes

§ FICA contributions

§ Generally, money received for Social Security, disability, retirement, child support, and 

alimony is protected from garnishment by regular creditors. If you owe the federal 

government or student loans, however, this money may not be protected. Voluntary 

deductions are not protected.

§ The process for getting a garnishment order from a court varies depending on what state 

you are in. But in all cases before a private creditor can garnish your wages the creditor 

should have sued you for an unpaid debt and gotten a court judgment saying you owe the 

creditor money, and how much. You should have received notice of that lawsuit and had 

a chance to raise any defenses to the debt. In most cases you also should receive notice 

that the private creditor is trying to get paid from your wages, and you should have a 

chance to raise any defenses to the garnishment.

§ Because garnishment of wages by a private party involves getting court orders, and 

complicated formulas for how much of your wages can be taken, you should consider 

consulting a lawyer. This can help you understand your legal rights and responsibilities 

and take steps to protect your rights if that becomes necessary.

 

26 Note that the federal minimum wage is subject to change. See www.dol.gov for updates.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 107

§ There may be a legal aid office or legal clinic in your area that can offer you free legal 

help if you meet their criteria. You can find a legal aid office at http://lsc.gov/find-legalaid.

§ Servicemembers should consult their local JAG office. You can find one at:

http://legalassistance.law.af.mil/content/locator.php.

§ You can also contact a lawyer referral service in your area and ask for an attorney with 

experience in garnishment and debt collection. Some attorneys may offer free services or 

charge a reduced fee.

§ If the debt you owe is to the government or is for child support there are different rules.

In this case the creditor may not need to get a court order, and the amount the creditor 

can take from your wages may be different. This kind of garnishment can be complicated 

too, so you may want to consult a lawyer.

Benefits

Benefits are payments from local, state, or federal government. They are designed to help 

individuals and families that do not have the resources cover their basic living expenses. 

You can only get benefits if you apply for them. And then, you will only receive them if you 

qualify for them. For most benefits programs, eligibility is based on:

§ Income

§ Circumstances, such as whether you have dependents or whether you have a disability

§ Assets, such as savings, a vehicle (or more than one vehicle), and money in investments

Benefits are like income and can be used to pay for some of the things you need. The difference 

between income and benefits is that benefits may often only be used for specific purposes. For 

example, if you qualify for the Supplemental Nutrition Assistance Program (SNAP), you can 

only use those benefits to purchase groceries. If you qualify for Medicaid, you can only use those 

benefits to cover qualified health expenses.
108 MODULE 3: TRACKING AND MANAGING INCOME AND BENEFITS

Benefits are important financial resources that cover living expenses. That’s why it is important 

to track benefits the same way you keep track of your income. Having benefits can also free up 

cash to pay for other living expenses not generally covered by benefits, such as:

§ Utilities

§ Gasoline for an automobile

§ Car repairs

§ Cell phone service

§ Debt repayment

§ In some states, people receive their unemployment benefits and other government 

benefits on a prepaid card.27 Instead of getting checks, they receive a card, and each 

month the benefit amount is loaded onto the card. These government benefit cards are 

sometimes called Electronic Benefit Transfer (EBT) cards. 

If your EBT card is lost or stolen, be sure to call to report it lost or stolen right away—the 

number you call will depend on the issuing agency. If someone else uses the card and PIN 

number, there is chance these benefits will not be replaced.

The federal government also provides prepaid cards for receipt of certain federal benefits, such 

as veterans’ benefits or Social Security benefits. In most cases, you can also choose to have the 

money direct deposited to a checking or savings account or a prepaid card of your choice.

The amount you can be charged in fees for using the card depends on the contract between the 

government agency and the financial institution providing the card account. Be sure to read the 

cardholder’s agreement carefully before using the card.

One major advantage of both EBT cards and direct deposit to a checking account or prepaid card 

for benefits is that individuals do not have to go anywhere to pick up benefits each month. 

Benefits are automatically transferred to the household’s account or card each month on a 

specific date.

 

27 Some states also distribute child support via prepaid card.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 109

Getting income

There are different ways to receive income and benefits. In some situations, you do not have a 

choice. For example, some public benefits can only be received electronically by direct deposit to 

an EBT card or a bank account. Some employers may only pay you using a traditional paper 

paycheck. You may get your income in one or more of the following ways:

§ Cash

§ Personal check

§ Paycheck

§ Direct deposit (to a checking or savings account or prepaid card)

§ Payroll card (prepaid card arranged by employer)

§ Electronic benefit transfer (EBT) cards

Why does this matter? Each way to get income has advantages and disadvantages. Some of these 

advantages and disadvantages may help or hinder how you manage your income. To better 

understand the pros and cons of each method, use Tool 3: Choosing how to receive your income 

and benefits

Once you have tracked your income, be sure to add it into your budget or cash flow budget. For 

more information on cash flow budgets, see Module 5: Getting through the month.
110 MODULE 3: TRACKING AND MANAGING INCOME AND BENEFITS
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 111

Tool 1:

Income and resource tracker

Income is the money that comes into your household. Benefits are financial resources that come 

into your household. 

You can use this tool to track all of income and financial resources that you receive during a 

month. Once you have written the amount and when you receive the income, benefit, or other 

resource, first identify whether the income is:

§ Regular—comes at a predictable time during the month

§ Irregular—is not predictable

§ Seasonal—is only received during some months during the year

§ One-time—only comes one-time or once a year (a gift or tax refund, for example)

It is usually easier to track net income, because that is the money you actually have available to 

pay for your living expenses. Net income is your gross income minus taxes and other deductions.

Gross income is what you earn before taxes or other deductions are taken from your pay.

§ On this worksheet, enter net income you have earned in each category. Then:

§ Add each column to get weekly income totals. Add the total for each week to get the 

monthly total.

§ Get a total by source by adding each row. 

§ Put a check in the column that best describes the income: regular, irregular, seasonal, or 

one time.
112 MODULE 3: TRACKING AND MANAGING INCOME AND BENEFITS

 TOOL 1: INCOME AND RESOURCE TRACKER

Income for the month of: ______________________________________________

§ Week 1

__/__/__

Week 2

__/__/__

Week 3

__/__/__

Week 4

__/__/__

Total by 

source

Regular Irregular Seasonal One-time

Job

Second job

Self- employment 

Income

SNAP

TANF

SSI

SSDI

Childcare 

payment

Child support

Gift

Tax refund

Other

Weekly total

8
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 113

Once you have tracked your income, be sure to add it into your budget or cash flow budget. For more information on cash flow 

budgets, see Module 5: Getting through the month. For more information on financial services that may help you manage your 

income, see Module 8: Money services, cards, accounts, and loans: Finding what works for you.

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for the public. This material is provided for educational 

and information purposes only. It is not a replacement for the guidance or advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not 

responsible for the advice or actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are limited to the materials 

that CFPB has prepared. 

This Tool may ask you to provide sensitive personal and financial information. The CFPB does not collect any information from you or the organization using this Tool. The CFPB is not 

responsible and has no control over how others may use the information that you provide to them about your personal or financial situation. The CFPB recommends that you do not 

include names or account numbers and that users follow their organization’s policies regarding retention, storage, and disposal of documents that contain personal information.
114 MODULE 3: TRACKING AND MANAGING INCOME AND BENEFITS

 TOOL 1: INCOME AND RESOURCE TRACKER
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 115

Tool 2:

Ways to increase income and 

resources

If you feel like you may not have enough income and other financial resources to pay for all of 

your obligations, needs, and wants, you can do one of two things:

1. Increase your sources of cash, income, or other financial resources.

2. Decrease your spending or uses of cash and other financial resources.

This tool focuses on ways to increase cash and financial resources.

Before you use the tool, you should note that there are two ways to bring in more income. You 

can bring in more income through a one-time activity. This would include selling items in a 

garage sale or on sales websites. This would also include getting a tax refund by claiming tax 

credits for which you qualify.

You can sometimes bring in more income or resources on a regular basis. This would include 

getting a part-time job, applying for benefits you may not be receiving, or starting a small 

business.

Increasing Income through Workforce Development Programs

One way to potentially increase income for the long term is by participating in workforce 

development programs in your community. Workforce development programs provide skills 

training that can prepare you for a new job where you work now or for another company or 

organization. Workforce development programs can be run by public or private organizations. 

The workforce development system includes vocational schools, career-technical schools, 

community colleges, universities, unions, and other apprenticeship programs. Programs often 

focus on helping individuals develop the skills to fill high-demand jobs or jobs that are predicted 

to be high demand.
116 MODULE 3: TRACKING AND MANAGING INCOME AND BENEFITS

 TOOL 2: WAYS TO INCREASE INCOME AND RESOURCES

How do you find a workforce development program in your community? Start with 

the U.S. Department of Labor services locator: http://www.dol.gov/dol/location.htm. If you 

enter your zip code, you will get a list of programs in your area. 

You can also visit a CareerOneStop Center (http://www.careeronestop.org) to explore careers, 

find out about education and training required for different careers, get advice on applying for 

jobs and interviews, and more. To find a center near you, visit: http://www.servicelocator.org.

Your state likely also has a state career or workforce development website or portal. These sites

often include online interest and skills assessments, as well as links to in-person and on-line 

training. Many community colleges also provide these types of assessments and services.

Ways to increase cash, income, and other resources

Use the tool to identify ways you can increase your income. Note that not all of these may apply 

to you. Check those that may be an option for you, and use this as a plan for getting more 

information or resources.

Check if 

option for 

you

Strategy for increasing cash and sources 

of financial resources

Information or resources you 

need to access this information

One-time activity

Hold a yard sale/garage sale

Sell items online

Claim tax credits if you qualify

Other:

Regular income

Seek a raise or additional hours at current job

Seek opportunities for training or education 

that would increase wage at current job or 

help you get a better job

Change tax withholding (if you generally 

receive a large tax refund.)

8
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 117

Get a part-time job

Do odd jobs (providing childcare, doing yard 

work, running errands for someone, etc.)

Rent a room in your home

Start a part-time small business or use your 

talents or hobbies to make items to sell 

online

Apply for public benefits (TANF, SNAP, 

Medicaid, public housing)

Search the Internet for reputable 

opportunities to provide services to other 

businesses

Other:

Other:

Once you have identified strategies for increasing income, adjust your cash flow—

see Module 5: Getting through the month.

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 

This Tool may ask you to provide sensitive personal and financial information. The CFPB does not collect any information from you 

or the organization using this Tool. The CFPB is not responsible and has no control over how others may use the information that 

you provide to them about your personal or financial situation. The CFPB recommends that you do not include names or account 

numbers and that users follow their organization’s policies regarding retention, storage, and disposal of documents that contain 

personal information.
118 MODULE 3: TRACKING AND MANAGING INCOME AND BENEFITS

 TOOL 2: WAYS TO INCREASE INCOME AND RESOURCES
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 119

3.

Tool 3:

Choosing how to receive 

income and benefits

Salaries, wages, and public benefits can be provided in a variety of ways. These include cash, 

paychecks, direct deposit, payroll cards and electronic benefits transfer (EBT) cards. Each has 

pros and cons when it comes to convenience, security, and fees. 

The table below highlights some of the pros and cons of each method. When you are given a 

choice, this will help you make an informed decision about how to receive income and benefits. 

Note that the availability of EBT cards—and the fees and other details regarding their use—vary 

from state to state and from program to program.
120 MODULE 3: TRACKING AND MANAGING INCOME AND BENEFITS

 TOOL 3: CHOOSING HOW TO RECEIVE YOUR INCOME AND BENEFITS

Method Definition Benefits Risks

Cash

Paper or coin money 

minted by the U.S. 

Government

Accepted everywhere.

Could be lost or stolen

Some people find it 

tempting to spend cash 

they have on hand (it

“burns a hole in your 

pocket.”).

Can be more difficult to 

track spending for personal 

budgeting and tax 

purposes.

Not all bill payments can be 

made in cash.

TIP: Avoid carrying around or leaving large amounts of cash in your home. If cash is lost or stolen, it’s 

hard to get it back.

 ̈ This is a good option for me. Ways to get more information:

 ̈ This is not a good option for me.

Paychecks

A check for salary or 

wages made out to an 

employee

Income can be deposited 

to a checking or a savings 

account or onto a prepaid 

card.

If you do not have a bank 

account, some banks and 

credit unions do not charge 

a fee to cash “on us” 

checks that are written 

from accounts that are held 

with their institution. 

Otherwise, you will have to 

pay a check cashing 

service to cash them.

Bank and credit union 

accounts are sometimes 

the only cost-free way to 

cash paychecks.

If you don’t have an 

account, unless your 

employer’s bank or credit 

union cashes “on us” 

checks for free, you may 

have to pay to cash them

at a bank, credit union, or 

check cashing service.

If you deposit a paycheck 

in a bank or credit union 

account or onto a prepaid 

card, you may not be able 

to access all the funds 

immediately.

TIP: If you cash your checks at a check cashing store, these stores may try to offer you a payday loan or 

overseas money-wiring service. These services can be very expensive – if you’re considering one, make 

sure you understand the costs.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 121

 ̈ This is a good option for me. Ways to get more information:

 ̈ This is not a good option for me.

Direct 

deposit

Employee pay is 

electronically sent to 

your bank or credit 

union account or your 

own prepaid card 

without the use of a 

paper check.

Reduces your risk of loss 

or theft compared to

carrying cash or checks.

Funds are usually available 

to you immediately.

Funds can be accessed via 

a debit card, ATM card, or 

personal checks.

For direct deposits made to 

a checking account, the 

account’s debit card has 

full consumer protections 

for funds taken by error or 

theft.

Income can be sent to a 

bank or credit union 

account. 

Many employers allow you 

to split the deposit between 

checking and savings 

accounts, which can help 

you build savings.

No check cashing fees. 

Many banks and credit 

unions also offer 

checking/savings accounts 

with no monthly fees when 

you set up direct deposit.

If direct deposit is made to 

a prepaid card, the card 

may lack full consumer 

protections for funds taken 

by error or theft.

Can be charged fees if you 

write checks or use debit 

card without sufficient 

funds.

Have to go to an ATM or 

get cash back at a 

merchant to get cash.

May not be offered by all 

employers.

TIP: Ask your employer how to arrange for direct deposit. If you receive your pay through direct deposit, 

your money is often available on your payday. Be aware of ATM fees you may be charged. Generally, 

you can avoid ATM fees by using your own bank or credit union’s ATMs.

 ̈ This is a good option for me. Ways to get more information:

 ̈ This is not a good option for me.
122 MODULE 3: TRACKING AND MANAGING INCOME AND BENEFITS

 TOOL 3: CHOOSING HOW TO RECEIVE YOUR INCOME AND BENEFITS

Payroll 

cards

Prepaid cards arranged 

by an employer through 

which employees 

access their salary or 

wages

Safer and more secure 

than carrying cash or 

checks.

The payroll card has full 

consumer protections for 

funds taken by error or 

theft. 

Potential inactivity and 

service fees.

Can be charged fees if you 

use the card without 

sufficient funds.

Requires some extra effort 

to access cash when cash 

is needed.

TIP: Ask questions about fees for using the payroll card. Your employer can require direct deposit, but 

must give you a choice between direct deposit to a payroll card and a bank or credit union account that 

you choose.

 ̈ This is a good option for me. Ways to get more information:

 ̈ This is not a good option for me.

Electronic 

benefit 

transfer 

(EBT) card 

EBT cards replace 

paper-based benefits 

for programs such as 

Temporary Assistance 

to Needy Families 

(TANF), Supplemental 

Nutrition Assistance 

Program (SNAP), 

Women, Infants, and 

Children (WIC) 

program, and other 

programs.28

You use it just like a 

prepaid or debit card

Not all merchants accept 

EBT cards. 

Some EBT cards are 

subject to fees.

Certain cards lack full 

consumer protections for 

returning funds taken by 

error or theft. 

WARNING: For EBT cards, some benefits can be lost if they are not used within a certain amount of time. 

Be sure to ask if this applies to your benefit and keep track of your balance.

 ̈ This is a good option for me. Ways to get more information:

 ̈ This is not a good option for me.

 

28 The availability of EBT cards, their fees and other details vary from state to state and program to program.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 123

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 
124 MODULE 3: TRACKING AND MANAGING INCOME AND BENEFITS

 TOOL 3: CHOOSING HOW TO RECEIVE YOUR INCOME AND BENEFITS
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 125

Tool 4:

Increasing your income 

through tax credits

Tax credits can make a big difference. They may give you a refund that can be saved for 

emergencies or unexpected expenses, set aside for annual expenses (back to school or holiday 

shopping), used to pay down debts, and more. The Earned Income Tax Credit (EITC) is a benefit 

for working people who have low- to moderate-income. Your tax refund is based on your income 

and filing status.

For the 2014 tax year the following income limits and maximum tax credits apply:29

Household size

Income limit if filing as 

single or married filing 

separately

Income limit if married 

filing jointly Maximum tax credit

Three or more 

qualifying children $46,997 $52,427 $6,143

Two qualifying 

children $43,756 $49,186 $5,469

One qualifying child $38,511 $43,941 $3,305

No qualifying children $14,590 $20,020 $496

Also, investment income must be $3,350 or less for the year.

 

29 http://www.irs.gov/Individuals/Preview-of-2012-EITC-Income-Limits,-Maximum-Credit--Amounts-and-TaxLaw-Updates
126 MODULE 3: TRACKING AND MANAGING INCOME AND BENEFITS

 TOOL 4: INCREASING YOUR INCOME THROUGH TAX CREDITS

Your kids are “qualifying children” if:

§ They have lived in the U.S. with you (or your spouse if married filing jointly) for more 

than half of the year.

§ Are under age 19 or under age 24 if they are a full-time student or are “permanently and 

totally disabled.”

§ Are related to you: your son, daughter, stepchild, eligible foster child, brother (including 

step or half), sister (including step or half) or are a descendant of any of these.

If you do not have any qualifying children, you may still be entitled to the credit if you are 

between ages 25 and 65, live in the U.S. for half of the year, and do not qualify as a dependent 

for anyone else. 

There is also a Child Tax Credit, which reduces the taxes you owe by up to $1,000 for each 

qualifying child under the age of 17. For the Child Tax Credit, a child is qualified if they meet the 

following tests:30

§ Relationship Test - To claim a child for purposes of the Child Tax Credit, they must 

either be your son, daughter, stepchild, foster child, brother, sister, stepbrother, 

stepsister or a descendant of any of these individuals, which includes your grandchild, 

niece, or nephew. An adopted child is always treated as your own child. An adopted child 

includes a child lawfully placed with you for legal adoption. 

§ Support Test - In order to claim a child for this credit, the child must not have 

provided more than half of their own support. 

§ Dependent Test - You must claim the child as a dependent on your federal tax return.

§ Citizenship Test - To meet the citizenship test, the child must be a U.S. citizen, U.S. 

national, or U.S. resident alien. 

 

30 http://www.irs.gov/uac/Ten-Facts-about-the-Child-Tax-Credit
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 127

§ Residence Test - The child must have lived with you for more than half of the year. 

There are some exceptions to the residence test, which can be found in IRS Publication 

972, Child Tax Credit.

§ If the amount of your Child Tax Credit is greater than the amount of income tax you owe, 

you may be able to claim the Additional Child Tax Credit. The Child Tax Credit phases out if 

your adjusted gross income exceeds the following:

§ $110,000 if married filing jointly

§ $75,000 if single, head of household, or qualifying widower

§ $55,000 if married filing separately

This information changes every year. To make sure you have the most current 

information, visit: http://www.irs.gov/Individuals/EITC-Income-Limits,-Maximum-Credit--

Amounts-and-Tax-Law-Updates.

More information on the Child Tax Credit is available here: http://www.irs.gov/uac/Ten-Factsabout-the-Child-Tax-Credit.

Consider visiting a Volunteer Income Tax Assistance (VITA) Program to file your taxes and 

make a plan to use your tax refund. The volunteers are trained by the IRS, and getting your taxes 

done doesn’t cost you anything. This preserves your income and can make a big difference in 

your ability to start and fund your savings or pay your bills and expenses. Find one at 

http://irs.treasury.gov/freetaxprep or call (800) 906-9887.

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 
128 MODULE 3: TRACKING AND MANAGING INCOME AND BENEFITS

 TOOL 4: INCREASING YOUR INCOME THROUGH TAX CREDITS

Resources

For MyMoney.gov budgeting resources, visit:

http://www.mymoney.gov/Fast/Pages/Results.aspx?k=Budgeting%20worksheets&s=All

If you lose your job, visit the following for more information:

http://www.benefits.gov

http://www.dol.gov/ebsa/publications/joblosstoolkit.html

If you are in a natural disaster, visit the following for more information: 

http://www.fema.gov/disaster-survivor-assistance

If you have a medical emergency you cannot afford, visit your state department of health and 

human services listed here:

http://www.hhs.gov/recovery/statewebsites.html

For information on finding a lawyer to represent you in a lawsuit by a creditor or debt 

collector:

http://www.consumerfinance.gov/askcfpb/1433/how-do-i-find-lawyer-or-attorneyrepresent-me-lawsuit-creditor-or-debt-collector.html

Housing counselors can provide advice on buying a home, renting, defaults, foreclosures, 

and credit issues:

www.consumerfinance.gov/find-a-housing-counselor

For additional resources, visit the Consumer Financial Protection Bureau website: 

http://www.consumerfinance.gov/AskCFPB

If you have a consumer complaint, visit:

http://www.consumerfinance.gov/complaint

The Consumer Financial Protection Bureau (CFPB) has prepared this material as a resource for the public. This material is provided 

for educational and information purposes only. It is not intended to be a replacement for the guidance or advice of an accountant, 

certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or actions of the 

individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are limited to the 

materials that the CFPB has prepared.

v
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 129

MODULE 4:

Paying bills and other 

expenses

It’s a rule of thumb that to stay financially healthy, you should spend less than you earn. But for 

some people, that rule of thumb may not feel helpful because they don’t have enough income 

and financial resources to pay all their bills and living expenses. For others, balancing their 

personal priorities and cultural expectations can be a challenge. And if your work is seasonal or 

irregular, you may be able to cover everything when you’re working but struggle to cover 

expenses in months or weeks when you’re not. 

Where does the money go?

No matter what your situation, it is important to start by understanding the differences among 

needs, obligations, and wants.

Needs are the things you must have to live. These include shelter and utilities, food, 

clothing, and transportation. The difficulty with needs, however, is that there is a wide range of 

options for shelter and utilities, food, clothing, and transportation. Determining what you can 

afford to get and can maintain or sustain may be a challenge when it comes to needs. 

Obligations are the things you must pay, because you owe money or have been 

ordered to pay someone money. Debts are examples of obligations. Child support and 

alimony as well as judgments are also examples of obligations.

Wants are the things you can survive without. For example, while a reliable car to get to 

work is a need, a new car with expensive features is both a need and a want.
130 MODULE 4: PAYING BILLS AND OTHER EXPENSES

But, it’s not always so clear-cut. One person may view something as a want, and another person 

may see it as a need. 

Financial empowerment is about understanding your options and making choices that work for 

you. Being able to separate needs, obligations, and wants for yourself empowers you to set 

priorities and cut back on the things you decide are optional.

Many people who track their spending for a week or a month discover that they are spending 

money in small ways that add up and sometimes don’t match their priorities. Once they track 

their spending, they’re better able to make decisions about which bills and expenses can be 

reduced. To get a clear picture of how you use your money and resources now, use the spending 

tracker in Tool 1 to get started.

If you are trying to make ends meet or find money to save, you may also want to cut back on the 

money and financial resources going to bills and living expenses. When this is the case, the key 

is to identify which bills and expenses can be cut. For specific ideas on cutting back on uses of 

money and financial resources, use Tool 4: Strategies for cutting expenses.

Planning and paying bills

Many people have recurring obligations like rent, utilities, car payments, child support 

payments, and insurance payments. Most of these obligations have a fixed due date, and if you 

are late, even by just a few days, you will likely pay an extra fee and risk a negative entry in your 

credit history. It can help you avoid late fees and other consequences of late or nonpayment if 

you can:

§ Write down the regular bills you have

§ Set up a bill paying calendar so you can visually see when payments are due

Tool 2: Bill calendar can help you document what you need to pay and when. 

If you use a smartphone, text messaging, or e-mail, you might prefer to explore bill reminder 

services and apps. These services can send you reminders when it’s time to pay your bills.

Another part of bill payment is how bills are paid. In general, you can pay your bills using:

§ Cash
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 131

§ Money orders

§ Checks

§ Credit cards

§ Automatic debit

§ Online bill payment

§ Tool 3: Choosing ways to pay bills can help you decide which method of paying bills will 

work for you. For example, if you prefer to pay your bills in cash, you’ll have to travel to a 

payment location, which costs you time and money for gas. If you have a checking 

account and have set up automatic bill payment, you’ll save time, but you’ll need to 

ensure that you have money in the account on the day the automatic payment is made. 

Otherwise, you’ll probably have to pay an overdraft fee.

With information about the advantages and disadvantages of each method of bill payment, you 

can be empowered to make choices that can help you save time or money, avoid additional or 

unnecessary fees, and create a reliable record of bill payment.

Unexpected expenses 

Managing unexpected and periodic expenses can put a strain on your budget. Here are some 

examples of unexpected expenses:

§ Fees for a school field trip for one of your children

§ Tools of the trade you did not anticipate needing to buy

§ The funeral of a friend or family member in another state

§ Car or home repairs

§ Health-care related expenses resulting from illness or injury.
132 MODULE 4: PAYING BILLS AND OTHER EXPENSES

Periodic expenses are different. These are 

expenses that happen occasionally. They are 

often predictable, but they can be hard to manage 

if you do not plan for them. Common periodic 

expenses include:

§ Car insurance payments

§ Life insurance payments

§ Renter’s insurance

§ Income taxes (if you owe money)

§ Property taxes

§ Holiday-related expenses

§ Health-care related co-payments (not related 

to illness or injury)

When cash is short

When your income is less than usual or you’ve had an unexpected expense, your regular bills 

and living expenses don’t stop. When you can see that you’re coming up short for your bills and 

living expenses, you can either try to find ways to increase cash and resources (See Module 3:

Tracking and managing income and benefits) or look for ways to cut your spending. Tool 4: 

Strategies for cutting expenses includes some tips and suggestions that can help you try to 

match what’s coming in with what’s going out.

Even after you’ve tracked your spending and found some ways to cut back to help make ends 

meet, you may still find yourself to be short on cash to pay your bills. This is even more likely to 

happen if you have periods when you don’t have income because you’re temporarily out of work 

or get fewer hours than usual.

You are responsible for paying all of your obligations on time. But when you truly don’t have 

enough money to cover your obligations and living expenses you may have to make a short-term 

plan to get through the month. 

Co-payments

Many health care providers require a 

co-payment (or “co-pay”) at the time 

of service. The amount is set by your 

health, dental, or vision insurance 

company. Check your insurance card 

or the insurer’s website for the 

amounts of your co-pays. Amounts

may vary depending on the reason for 

your visit (illness/ check-up) and 

type of provider (primary care/ 

specialist). Prescription co-pays are 

based on a formulary, a list that 

details what medications are covered 

and how much you have to pay for 

each one.

3
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 133

Sometimes your plan may involve paying some bills late or missing a bill. When bill collectors 

are calling and you’re trying to decide which of your obligations to pay first, it can sometimes 

just seem easiest to pay the “squeakiest wheel” – but this might not be your best approach. 

Sometimes the plan will mean ignoring the squeaky wheel for a short time until you can build a 

plan for repayment.

Part of making this short-term or longer-term plan is making sure you understand the 

consequences of delaying paying certain bills.

Action Some potential consequences

Five days past the due date for 

your rent

Pay the late fine as outlined in your lease agreement.

Risk creating a pattern of late payment, which could lead to the 

landlord terminating your tenancy through the courts—eviction.

Strain your relationship with your landlord.

Create stress for you.

Miss a credit card payment

Pay the late fee as outlined in your credit card agreement.

Risk an increase in your interest rate on what you already owe (if 

you are 60 days late).

Risk an increase in the interest rate on new purchases.

Risk a negative entry on your credit reports and a drop in your 

credit scores.
134 MODULE 4: PAYING BILLS AND OTHER EXPENSES

Miss your car payment

Pay the late fee as outlined in your loan agreement.

Risk creating a pattern of late payment, which could lead to 

repossession of your car. 

Create a situation in which you need more cash the following 

month—to catch up the car payment you missed.

Risk a negative entry on your credit reports and a drop in your 

credit scores.

Miss your electric bill payment

Pay the late fee.

Create a situation in which you need more cash the following 

month—to catch up the electric bill you missed.

Potentially get a negative entry on your credit reports and risk a 

drop in your credit scores.

Risk a drop in your credit scores.

If you are late for several months, your electricity could be cut off. 

To get it turned on, you will have catch up on payments and pay a 

restore fee to get your service turned back on. 

If you find you can’t pay all of your bills on time, try calling your creditors to make short-term 

arrangements. Do not ignore them. This generally makes the problem worse for you.

Finally, after you have examined the consequences of not paying or paying bills late and have 

called your creditors, make a short-term plan. Use Tool 5: When cash is short: Prioritizing bills 

and planning spending, to make a plan. This tool is designed to help you first protect expenses 

associated with earning an income. If you miss these costs, you may harm your ability to earn

the money you need to pay any of your bills.

When creditors call 

Do not ignore bills you can’t pay. If you must miss a payment, call and explain that you will miss 

a payment and the reason for it. You may wish to contact a certified housing or debt counselor 

for specialized assistance in building a plan to pay your debts.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 135

Module 6: Dealing with Debt has information on how you can respond to debt collectors. For 

additional information on what creditors and debt collectors can and cannot do if you owe them 

money, visit Ask CFPB at http://www.consumerfinance.gov/askCFPB. 

If a creditor (a credit card company or medical provider, for example) threatens to sue you, 

respond to any court documents. If you don’t respond at all, the court will usually assume that 

you agree with everything that the creditor says, and issue a money judgment against you. If you 

can’t go to court on the date scheduled, tell the court that you need a special appointment. You 

should also try to find an attorney who can advise or represent you at the hearing. If you don’t 

think you can afford a lawyer, check out the CFPB’s online tool for finding a provider of free 

legal services at www.consumerfinance.gov/askcfpb/1549/how-do-i-find-attorney-mystate.html or call the Center for Elder Rights Advocacy at: (866)949-2372.
136 MODULE 4: PAYING BILLS AND OTHER EXPENSES

You rights in debt collection

The Fair Debt Collection Practices Act (FDCPA) says debt collectors may not harass, 

oppress, or abuse you or any other people they contact. Some examples of harassment 

are:

§ Repeated phone calls that are intended to annoy, abuse, or harass you or any 

person answering the phone

§ Obscene or profane language

§ Threats of violence or harm

§ Publishing lists of people who refuse to pay their debts (this does not include 

reporting information to a credit reporting company)

§ Calling you without telling you who they are 

§ The FDCPA also says debt collectors cannot use false, deceptive, or misleading 

practices. This includes misrepresentations about the debt, including the amount 

owed, that the person is an attorney if they are not, false threats to have you 

arrested, threats to do things that cannot legally be done, or threats to do things 

that the debt collector has no intention of doing.

It is a good idea to keep a file of all letters or documents a debt collector sends you and 

copies of anything you send to a debt collector. Also, write down dates and times of 

conversations along with notes about what you discussed. These records can help you if 

you have a dispute with a debt collector, meet with a lawyer, or go to court.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 137

Tool 1:

Spending tracker

Whether they have a lot of money to spend or are struggling to make ends meet, most people 

can’t tell you how they spend their money during a month. Before deciding on changes to your 

spending, it is a good idea to understand how you use your money now. This takes three steps 

and commitment:

1. Keep track of everything you spend money on for a week, two weeks, or one 

month. A month is best, because all of your income and your bills will be included. But, 

keeping up with the tracking for a month may be a challenge. 

2. Analyze your spending. See how much you spend in each category. Notice trends. 

Identify areas you can and want to eliminate or cut back on.

3. Use this as information to figure out where you can make changes. 

It takes commitment, because this is a lot of work. But, it’s important work. Many people are 

actually able to find money to save for emergencies, unexpected expenses, and goals by doing 

this work. Others are able to make their budgets balance.

Get a simple plastic case or envelope. Every time you spend money, get a receipt and put it 

into the case or envelope. If the receipt doesn’t include what you purchased, take a few seconds 

and write this on the receipt. If you don’t get a receipt, write one out on scrap paper. 

Analyze your spending. Use the following tool, Analyze Your Spending, for each week of the 

month. Go through your receipts. Enter the total you spent and the date in the column that 

makes most sense to you. See how much you spend in each category and add the weekly 

amounts. Once you have these totals, add them together to get a total spending for the week. 

You can track your spending for one week, two weeks, or an entire month. 

Notice trends. Circle those items that are the same every month (for example, rent, car 

payment, cell phone payment). These are often your needs and obligations. This will make 

creating your budget easier. Identify areas you can eliminate or cut back on—these will generally 

be wants.
138 MODULE 4: PAYING BILLS AND OTHER EXPENSES

 TOOL 1: SPENDING TRACKER

Here is a list of the categories that are used in the spending tracker.

Savings Saving for goals, emergencies, children’s education, saving for 

retirement, holiday purchases, for back to school shopping

Debt payments Credit card payments, payday loan payments, pawn loan 

payments, car title loan payments, and other loan payments

Housing and utilities Rent, mortgage, insurance, property taxes, electricity, gas, 

water, sewage, phone, television, Internet service, cell phone

Tools of the trade/Jobrelated expensesTools, equipment, special clothing, job-related books, 

machinery, working animals or livestock, union dues

Household supplies and 

expenses

Things for your home like cleaning supplies, kitchen appliances, 

furniture, other equipment

Groceries Food and beverages to be brought into the home, including 

baby formula and food

Eating out (meals & 

beverages) Any meals or beverages purchased outside of the home

Pets Food, healthcare costs, and other costs associated with caring 

for your pets

Transportation Gas, car payment, insurance payment, repairs 

Health care Co-payments, medication, eye care, dental care, health care 

premiums 

Personal care Haircuts, hygiene items, dry cleaning 

Childcare and school 

expenses

Child care costs, diapers, school supplies, school materials 

fees, field trip and other activity fees

Entertainment

Going to the movies, going to concerts, sports equipment/fees, 

sporting events, lottery tickets, memberships, alcohol, 

books/CDs, subscriptions 

Court-ordered obligations Child Support, restitution, etc.

Gifts, donations, and other Donations to religious organizations or other charities, gifts, 

other expenses
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 139

Analyze Your Spending: Week ____ for the Month of ____________________

On this worksheet, enter each amount from your receipts into its matching category column. Take care to make sure the entry 

also matches the correct date. Add each column. Add the total of all of the columns to get total spending for the week. Print and 

complete multiple copies of this sheet to analyze spending over the period of a month or longer. Date of month Savings Debt payments Housing and utilities Household supplies and expenses Tools of the trade /Job related expenses Groceries Eating out Pets Transportation Health care Personal care

Childcare & schoolEntertainmentCourt-ordered oblig.Gifts, donations, otherTotal

__

__

__

__

__

__

__

Total

8
140 MODULE 4: PAYING BILLS AND OTHER EXPENSES

 TOOL 1: SPENDING TRACKER

Review your spending for the week or month. Which items cannot be cut or reduced? List these 

in the chart below. When you make your cash flow budget, you will just fill these in.

Spending that cannot be cut Reason

Are there items that can be completely eliminated? If yes, the money you spend on these items 

can be used on other things like saving for emergencies or goals or paying down debt.

Spending that can be eliminated Steps to eliminate 

Are there items that can be realistically reduced? If yes, list them below. Set new spending 

targets for these items and include them in your cash flow. 

Spending that can be reduced Strategies for reducing 

Once you have tracked your spending, be sure to add it into your budget or cash flow budget. 

For more information on cash flow budgets, see Module 5: Getting through the month. For 

more information on financial services that may help you pay your bills, see Module 8: Money 

services, cards, accounts, and loans: Finding what works for you.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 141

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 

This Tool may ask you to provide sensitive personal and financial information. The CFPB does not collect any information from you 

or the organization using this Tool. The CFPB is not responsible and has no control over how others may use the information that 

you provide to them about your personal or financial situation. The CFPB recommends that you do not include names or account 

numbers and that users follow their organization’s policies regarding retention, storage, and disposal of documents that contain 

personal information.
142 MODULE 4: PAYING BILLS AND OTHER EXPENSES

 TOOL 1: SPENDING TRACKER
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 143

Tool 2:

Bill calendar

Bills are a fact of life – and while they are not fun to pay – most are at least predictable. 

Figuring out which bills you expect throughout the month can be helpful in a couple of ways. It

helps you plan to have enough money or other financial resources on hand to pay them. 

Thinking about the amounts and timing of your bills might help you think of ways to reduce 

your expenses over the course of the month. Finally, some people find that thinking ahead about 

their bills helps reduce the stress of being surprised when they arrive in the mail.

Create a bill calendar using the following tool:

§ Print the bill calendar.

§ Fill in the name of the month and year.

§ Add numbers to represent the days of the month. Start with this week as the first week.

§ Gather all of the bills you pay in one month OR use the information from your pending

tracker.

§ Write the due dates for these bills. Since due dates are when bills must arrive, write the 

date bills must be sent. If paying by mail, mark the due date at least 7 days before it is 

due.

o For in-person or automatic bill payment, mark one or two days before the due 

date to ensure you are not late.

§ Fill in the calendar with the business or person you owe the money to, the date the 

money must be sent to arrive on time, and the amount that is due.

§ Put this calendar somewhere you will see it every day to ensure you are not forgetting 

about important bills.
144 MODULE 4: PAYING BILLS AND OTHER EXPENSES

 TOOL 2: BILL CALENDAR

Here is a sample week to show you how the tool works:

Sun. Mon. Tues. Wed. Thurs. Fri. Sat. End of 

Week

1 2 3 4 5 6 7

Bills: Bills:

Phone 

bill, $60

Rent, 

$500

Bills: Bills: Bills: Bills:

Car payment, 

$180

Bills: Total 

bills for 

week:

$740

Once you become comfortable with this tool, you may want to explore online bill reminder 

services or apps that help keep you on track for paying your bills on time.

For more information on financial services that may help you pay your bills, see 

Module 8: Money services, cards, accounts, and loans: Finding what works for 

you.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 145

______, 20__

Sun. Mon. Tues. Wed. Thurs. Fri. Sat. End of 

Week

__ __ __ __ __ __ __

Bills: Bills: Bills: Bills: Bills: Bills: Bills: Total 

bills for 

week:

__ __ __ __ __ __ __

Bills: Bills: Bills: Bills: Bills: Bills: Bills: Total 

bills for 

week:

__ __ __ __ __ __ __

Bills: Bills: Bills: Bills: Bills: Bills: Bills: Total 

bills for 

week:

8
146 MODULE 4: PAYING BILLS AND OTHER EXPENSES

 TOOL 2: BILL CALENDAR

Sun. Mon. Tues. Wed. Thurs. Fri. Sat. End of 

Week

__ __ __ __ __ __ __

Bills: Bills: Bills: Bills: Bills: Bills: Bills: Total 

bills for 

week:

__ __ __ __ __ __ __

Bills: Bills: Bills: Bills: Bills: Bills: Bills: Total 

bills for 

week:

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 

This Tool may ask you to provide sensitive personal and financial information. The CFPB does not collect any information from you 

or the organization using this Tool. The CFPB is not responsible and has no control over how others may use the information that 

you provide to them about your personal or financial situation. The CFPB recommends that you do not include names or account 

numbers and that users follow their organization’s policies regarding retention, storage, and disposal of documents that contain 

personal information.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 147

Tool 3:

Choosing ways to pay bills

With information about the advantages and disadvantages of each method of bill payment, you 

can make choices that may help you:

§ Save time

§ Save money

§ Avoid additional or unnecessary fees

§ Create a reliable record of bill payment

Bill payment 

method Advantages Disadvantages

Cash

Easy to understand.

When you pay cash directly to the 

company there are often no 

additional costs. Buying or using a 

special product such as a money 

order or prepaid cards may cost 

money.

May be inconvenient as this requires 

in-person payment of bills.

Bill payment services may charge you 

fees to make a cash payment.

May be difficult to prove payment 

unless you have a receipt.

Cost of traveling to the businesses you 

are paying money to.

Your cash can be stolen when you are 

on the way to pay your bills.

Money order

Easy to understand.

Can be mailed, so more convenient 

than cash.

Can be safer than a check in some 

cases, as no personal banking 

information appears on the money 

order.

May be inconvenient because you 

have to buy the money order.

Cost per money order.

May be hard to prove payment unless 

you have the money order receipt and 

receive the receipt for payment.

Costs of mailing the payments.

Like cash, it would be hard to recover if 

lost.
148 MODULE 4: PAYING BILLS AND OTHER EXPENSES

 TOOL 3: CHOOSING WAYS TO PAY BILLS

Check

Convenient once the checking 

account is set up at a bank or credit 

union.

Can be mailed, so more convenient 

than cash.

Easier to prove payment if there is a 

dispute.

Option for online bill payment through 

the bank or credit union.

Funds in checking account are safe.

Requires an account at bank or credit 

union; you may not be able to get a 

checking account if you have a 

negative banking history report.

The bank or credit union may charge 

nonsufficient fund fees, overdraft 

charges, or returned check fees if you 

pay bills by check without enough 

money in your account.

May be difficult for some people to 

understand and manage a checking 

account.

Time to write out checks and mail 

them.

Costs of mailing the payments.

Credit cards

Convenient.

Can pay bills over the phone or 

online.

Easier to prove payment if there is a 

dispute.

Protects you from having to pay for 

charges if your card or information is 

stolen or lost.

Can be set up to automatically pay 

recurring bills with no risk of 

overdraft.

Can help build your credit history if 

you make payments on time and 

don’t get close to your credit limit.

Creates another bill you have to pay.

Creates debt—you are borrowing 

money to pay for bills and other items.

Costs more than paying for the 

purchase with cash or a check if you 

can’t pay the credit card balance in full 

and have to pay interest on the 

balance.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 149

Automatic debit

from a 

checking/savings 

account, prepaid 

card, or credit 

card

Convenient.

No chance of being late—set it up 

once and forget it.

Can be linked to a debit card 

(checking account) or credit card.

Easier to prove payment if there is a 

dispute.

Saves time.

If there is not enough money for the 

payment in the checking or savings 

account when the automatic debit 

happens, you would have to pay 

additional fees.

Online bill 

payment

Convenient.

You can choose between making 

one-time payments each billing cycle 

or setting up recurring (automatic) 

payments using your bank or credit 

union’s online web services. Either 

way, keep track of your balance. It 

will help you avoid late fees. 

Automatic payments reduce the

chance of being late.

If set up through your bank or credit 

union, you may receive warnings or 

alerts if you do not have enough 

money in your account to pay a bill.

May include options for setting up 

payment from cell phones/smart 

devices.

Saves time.

Takes time to set up and learn.

Possible risks of overdraft.

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 

This Tool may ask you to provide sensitive personal and financial information. The CFPB does not collect any information from you 

or the organization using this Tool. The CFPB is not responsible and has no control over how others may use the information that 

you provide to them about your personal or financial situation. The CFPB recommends that you do not include names or account 

numbers and that users follow their organization’s policies regarding retention, storage, and disposal of documents that contain 

personal information.
150 MODULE 4: PAYING BILLS AND OTHER EXPENSES

 TOOL 3: CHOOSING WAYS TO PAY BILLS
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 151

Tool 4:

Strategies for cutting 

expenses

If you do not have enough money or financial resources, you can do one of two things:

§ Increase your sources of cash, income, or other financial resources.

§ Decrease your spending or uses of cash and other financial resources.

This tool focuses on ways to decrease spending or uses of cash and other financial resources.

Not all of these may apply to you. Check the ideas that may be an option for you, and use this as 

a plan for getting more information or resources.

Strategies list

Check

if an 

option 

for you

Strategy for cutting expenses 

and other uses of financial 

resources

Additional information or 

resources you need to access

this information

Estimate $ 

value of 

spending cut 

you select

Cut back on regular (recurring expenses)

Television Check with your provider about 

lower cost plans or discontinue 

cable.

Internet

8
152 MODULE 4: PAYING BILLS AND OTHER EXPENSES

 TOOL 4: STRATEGIES FOR CUTTING EXPENSES

Check

if an 

option 

for you

Strategy for cutting expenses 

and other uses of financial 

resources

Additional information or 

resources you need to access

this information

Estimate $ 

value of 

spending cut 

you select

Phone Check if you qualify for a 

“Lifeline” phone rate.31

Cell phone plan Review prepaid or fixed call 

plans. Check if you qualify for a 

“Lifeline” phone rate.

Review insurance; increase 

deductible on auto insurance to 

lower premium payment

Check to see if moving all

insurance coverage to one 

company will save you money

and for other discounts.

Find ways to save on energy.

§ Turn off and unplug 

unused electric 

appliances.

§ Insulate and use weather 

stripping around doors and 

windows.

§ Set thermostat higher in 

summer and lower in 

winter.

Check to see if you’re eligible for 

weatherization programs or other 

incentives.

Other:

Get rid of regular (recurring) expenses

Online video membership

Discount store memberships if 

 

31 For more information on Lifeline phone rates, see http://www.fcc.gov/guides/lifeline-and-link-affordabletelephone-service-income-eligible-consumers.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 153

Check

if an 

option 

for you

Strategy for cutting expenses 

and other uses of financial 

resources

Additional information or 

resources you need to access

this information

Estimate $ 

value of 

spending cut 

you select

not using regularly

Gym/health club membership (if 

not used)

Credit monitoring services

Other:

Avoid fees

Review financial services. 

Are you paying to cash your 

checks? 

Are you paying maintenance 

fees on checking or savings 

accounts?

Are you paying ATM fees?

Do you pay overdraft fees?

Are you paying annual fees for 

credit cards?

Know the fees you are paying 

for your loans.

Could you switch to a no-fee or 

lower-fee account?

Pay bills and fines like parking 

tickets on time

Parking tickets and other fines 

cost more if you pay them late.

Return library materials, rented 

DVDs, etc. on time

Renew license and registration 

on time

Other:
154 MODULE 4: PAYING BILLS AND OTHER EXPENSES

 TOOL 4: STRATEGIES FOR CUTTING EXPENSES

Check

if an 

option 

for you

Strategy for cutting expenses 

and other uses of financial 

resources

Additional information or 

resources you need to access

this information

Estimate $ 

value of 

spending cut 

you select

Other methods

Negotiate a new due date for 

bills to make them easier to 

handle in cash flow

Avoid eating out; cut one meal 

out per month

If you buy lunch at work, could 

you save money if you bring 

lunch instead?

If you have children, identify the 

restaurants that have “kids eat 

free” nights – but check what is 

included.

Avoid bottled water

Avoid buying fountain drinks 

and coffee out

Use coupons

Buy second hand furniture or 

clothing if you need to replace 

either

Do not buy or rent DVDs or 

CDs

Visit your local public library. To 

avoid late fees, you have to 

return the items by the due 

dates.

Buy items you use in bulk if 

they are cheaper that way

Look at the price label for cost 

per serving. Sometimes larger 

quantities don’t actually save 

money.

Maintain your car Get regular oil changes and keep 

tires inflated. This can save on 
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 155

Check

if an 

option 

for you

Strategy for cutting expenses 

and other uses of financial 

resources

Additional information or 

resources you need to access

this information

Estimate $ 

value of 

spending cut 

you select

fuel and can prevent major 

repairs.

Other:

Total reduction in spending for one month

Once you have identified strategies for cutting your spending, adjust your cash 

flow budget. See Module 5: Getting through the month.

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 

This Tool may ask you to provide sensitive personal and financial information. The CFPB does not collect any information from you 

or the organization using this Tool. The CFPB is not responsible and has no control over how others may use the information that 

you provide to them about your personal or financial situation. The CFPB recommends that you do not include names or account 

numbers and that users follow their organization’s policies regarding retention, storage, and disposal of documents that contain 

personal information.
156 MODULE 4: PAYING BILLS AND OTHER EXPENSES

 TOOL 4: STRATEGIES FOR CUTTING EXPENSES
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 157

Tool 5:

When cash is short—

prioritizing bills and planning 

spending

Even when you have done everything you can to increase sources of income or cut spending, you 

may still find yourself to be cash short.

You are responsible for paying all of your obligations on time. But when you truly don’t have 

enough money to cover your legal obligations and living expenses—this means you have cut out 

everything that isn’t a “need”—you may have to make a short-term plan to get through the 

month. Take time to consider how each of your bills impacts these areas – protecting your job, 

your shelter, your assets, and meeting your legal responsibilities.

Use the following tool to help you make a short-term plan to get through the months you cannot 

pay your bills or living expenses.

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 

This Tool may ask you to provide sensitive personal and financial information. The CFPB does not collect any information from you 

or the organization using this Tool. The CFPB is not responsible and has no control over how others may use the information that 

you provide to them about your personal or financial situation. The CFPB recommends that you do not include names or account 

numbers and that users follow their organization’s policies regarding retention, storage, and disposal of documents that contain 

personal information.
158 MODULE 4: PAYING BILLS AND OTHER EXPENSES

 TOOL 5: WHEN CASH IS SHORT—PRIORITIZING BILLS AND SPENDING

Protect your income Protect your shelter Protect your assets Pay your obligations

If you need a car to get to 

and from work, stay current 

on your car payment and 

insurance.

Maintain other expenses 

needed to keep your job, 

such as the tools you need 

or to pay for required 

licenses.

Whether you rent or have a 

mortgage, the costs of losing your 

home are big.

Be sure to pay taxes, condo fees, 

mobile home lot payments, too.

If possible, maintain your utilities. 

They are difficult to live without, 

and reconnection is expensive.

Don’t let essential insurance 

coverage lapse; this includes

auto, renters / homeowner’s, 

health.

Not having insurance may mean 

you cannot drive your car and

puts your assets, including your 

health/your family’s health, at 

risk.

Example include:

§ Child support

§ Income taxes

§ Student loans

Your expenses: Your expenses: Your expenses: Your expenses:

Remember, you are responsible for all of your bills and expenses.

If you miss payments now, you will have to make those up in the future.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 159

Resources

For MyMoney.gov budgeting resources, visit:

http://www.mymoney.gov/Fast/Pages/Results.aspx?k=Budgeting%20worksheets&s=All

If you lose your job, visit the following for more information:

http://www.benefits.gov

http://www.dol.gov/ebsa/publications/joblosstoolkit.html#.UM6BmXPjkt8

If you are in a natural disaster, visit the following for more information: 

http://www.fema.gov/disaster-survivor-assistance

If you have a medical emergency you cannot afford, visit your state department of health 

and human services listed here: 

http://www.hhs.gov/recovery/statewebsites.html

Housing counselors can provide advice on buying a home, renting, defaults, foreclosures, 

and credit issues:

www.consumerfinance.gov/find-a-housing-counselor

For information on finding a lawyer to represent you in a lawsuit by a creditor or debt 

collector:

http://www.consumerfinance.gov/askcfpb/1433/how-do-i-find-lawyer-or-attorneyrepresent-me-lawsuit-creditor-or-debt-collector.html

For additional resources, visit the Consumer Financial Protection Bureau website:

http://www.consumerfinance.gov/AskCFPB

If you have a consumer complaint, visit:

http://www.consumerfinance.gov/complaint

The CFPB has prepared this material as a resource for the public. This material is provided for educational and information 

purposes only. It is not a replacement for the guidance or advice of an accountant, certified financial advisor, or otherwise qualified 

professional. The CFPB is not responsible for the advice or actions of the individuals or entities from which you received the CFPB 

educational materials. The CFPB’s educational efforts are limited to the materials that CFPB has prepared. 

v
160 MODULE 4: PAYING BILLS AND OTHER EXPENSES

 TOOL 5: WHEN CASH IS SHORT—PRIORITIZING BILLS AND SPENDING
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 161

MODULE 5:

Getting through the month

When it comes to money, timing matters. People 

often find themselves flush with cash or resources

one week and pay several bills at once or splurge on 

something fun. But then they come up short the next 

week for a necessity. 

That’s why monthly budgets sometimes don’t work. 

If the timing of your income doesn’t match the 

timing of your expenses and you haven’t planned for 

it, you’ll come up short. While it may not feel like 

you have a “cash flow,” chances are you have at least 

some resources coming in and bills going out. That 

means you have “cash flow.” 

A cash flow budget is a projection of how you will get 

and use your cash and other financial resources. 

A cash flow budget is different from a regular 

budget, because it includes not only the amount for each budget item, but the timing of your 

income and expenses. It breaks your monthly budget down week by week, accounting for when 

money and other financial resources are expected (income) and when they must be used on 

needs, wants, and obligations.

A cash flow budget can help you identify where you’re falling short within the month. It can help 

you ensure you have the financial resources on hand to cover the most important expenses—so 

you don’t fall short covering the rent, for example. A cash flow budget can also help you target 

areas where you could consider cutting back or postponing expenses. 

Tracking your money and 

expenses

Some banks and credit unions provide 

online financial management tools 

including income and spending 

tracking budget, and cash flow tools. 

If you have an account at a bank or 

credit union, check to see if these tools 

may be available for you.

You may also want to explore using 

online financial management tools.

When you enter personal or banking 

information ensure the website is 

secure.

3
162 MODULE 5: GETTING THROUGH THE MONTH

A cash flow budget is even more important for people who have irregular, seasonal, or one-time 

income. It can help you project and plan ways to spread the income you receive over the weeks 

or months you don’t have money coming in. 

Making a cash flow budget

Making a cash flow budget involves three steps:

§ Keeping track of everything you earn and spend money on for a week, two 

weeks, or one month. You can use the income and financial resource tracker from 

Module 3 and the spending tracker from Module 4 to do this. 

§ Analyzing your spending. You can use the spending tracker from Module 4: Paying 

bills and other expenses to do this.

§ Using this information to create a cash flow budget. You will use Tool 1: Cash 

Flow Budget to complete this step or Tool 2: Cash flow calendar. Your cash flow budget 

is about setting targets for how you will use your income going forward.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 163

4.

Tool 1:

Cash flow budget

Building a cash flow budget is important because when it comes to money, timing matters. It 

can help you make sure you have the resources on hand to cover the most important expenses. 

This is especially important if your income is irregular, seasonal, or one time. 

There are expenses such as rent and your car payment that you cannot cut back. These are 

commonly called fixed expenses. Cutting back on these expenses requires major changes, such a 

moving or selling a car. Sometimes, though, you may find that you need to do this to make your 

cash flow work. 

If you find you want to cut back in some other areas, put these new targets levels of 

spending on your cash flow budget. For example, if you spend $350 per month on 

groceries, you may decide to buy and cook food in bulk and cut out bottled water to decrease the 

amount you spend on groceries to $300. It’s important to be realistic when you set targets. Your 

cash flow budget is about setting targets for how you will use your income going forward. 

You can create a cash flow budget using the following form.
164 MODULE 5: GETTING THROUGH THE MONTH

 TOOL 1: CASH FLOW BUDGET

Here are some important tips to get you started:

Beginning balance for the week

Your beginning balance for each week is the ending balance from the week before. When you 

start a cash flow, count the money you have in your pocket, on a prepaid debit card, or in an 

account you use to pay your bills to get your beginning balance.

Week 1 Week 2

Beginning balance for the week $37.00 $142.37

Sources of cash and other financial resources

Income from job $305.34 $290.80

SNAP $280.00

Public housing voucher $650.00

Total sources of cash and other 

financial resources $1,272.34 $433.17

Uses of cash and other financial resources

Housing $650.00

Utilities $59.97 $95.50

Groceries $180.00 $80.00

Eating out (meals and beverages)

Transportation $240.00 $60.00

Total uses of cash and other financial 

resources

$1,129.97 $235.50

Ending balance for the week $142.37 $197.67

Move your ending 

balance from the 

previous week 

forward.

To get a starting 

balance, total your 

cash, prepaid card, 

and account 

balances.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 165

Total sources of cash and other financial resources

Add your beginning balance for the week to the other income you get that week. The total is the 

amount you have to pay for all of your expenses during that week.

Week 1 Week 2

Beginning balance for the week $37.00 $142.37

Sources of cash and other financial resources

Income from job $305.34 $290.80

SNAP $280.00

Public housing voucher $650.00

Total sources of cash and other 

financial resources $1,272.34 $433.17

Uses of cash and other financial resources

Housing $650.00

Utilities $59.97 $95.50

Groceries $180. 00 $80.00

Eating out (meals and beverages)

Transportation $240.00 $60.00

Total uses of cash and other financial 

resources

$1,129.97 $235.50

Ending balance for the week $142.37 $197.67

Add your beginning 

balance and all of 

the sources of cash 

and financial 

resources for the 

week.
166 MODULE 5: GETTING THROUGH THE MONTH

 TOOL 1: CASH FLOW BUDGET

Total uses of cash and other financial resources

Add all of your expenses and other uses of cash (savings and debt repayment) for the week. Note 

that some financial resources may only be used for specific expenses. For example, SNAP 

(Supplemental Nutrition Assistance Program) benefits can only be used for food and for plants 

and seeds to grow food for your household to eat. 

SNAP cannot be used for:

§ Any nonfood item, such as pet foods, soaps, paper products, and household supplies,

grooming items, toothpaste, and cosmetics

§ Alcoholic beverages and tobacco

§ Vitamins and medicines

§ Any food that will be eaten in the store

§ Hot foods32

 

32 For details on eligible food items, see http://www.fns.usda.gov/snap/retailers/eligible.htm. 
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 167

Subtract your total uses of cash and other financial resources from your total 

sources of cash and other financial resources

This will give you your ending balance for the week. It will also show you whether you have 

enough cash and other financial resources to make it through the week.

Week 1 Week 2

Beginning balance for the week $37.00 $142.37

Sources of cash and other financial resources

Income from job $305.34 $290.80

SNAP $280.00

Public housing voucher $650.00

Total sources of cash and other 

financial resources $1,272.34 $433.17

Uses of cash and other financial resources

Housing $650.00

Utilities $59.97 $95.50

Groceries $180.00 $80.00

Eating out (meals and beverages)

Transportation $240.00 $60.00

Total uses of cash and other financial 

resources

$1,129.97 $235.50

Ending balance for the week $142.37 $197.67

Total sources 

minus total uses. 

This becomes your 

beginning balance 

for the next week.
168 MODULE 5: GETTING THROUGH THE MONTH

 TOOL 1: CASH FLOW BUDGET

Cash flow budget worksheet

Week 1 Week 2 Week 3 Week 4 Week 5

Beginning balance for the week

Sources of cash & other financial resources

Income from job

Income from part-time job

Income from self-employment

TANF

SNAP

Public housing voucher

Other:

Total sources of cash & other financial resources

Uses of cash & other financial resources

Credit card payments

Payday loan payments

8
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 169

Personal loans

Other debt

Other payments

Savings: emergency fund

Savings: goals

Savings: children's education

Savings: retirement

Rent or mortgage payment

Homeowners or rental insurance

Electricity

Gas

Water and sewer

Cable or satellite television

Internet service
170 MODULE 5: GETTING THROUGH THE MONTH

 TOOL 1: CASH FLOW BUDGET

Phone and cell phone service

Groceries

Eating out (meals and beverage)

Car payment

Gas for car

Car maintenance 

Tools of the trade and other job-related expenses

Health insurance

Health care deductibles and co-pays

Personal care

Childcare, diapers, and school fees and supplies

Entertainment

Contributions

Total uses of cash & other financial resources
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 171

Ending balance for the week (sources - uses)

Be sure to use tools you may have completed in other modules to build your cash flow. Look at Module 1: Setting 

goals, Module 2: Saving for the emergencies, goals, and bills Module 3: Tracking and managing income and 

benefits, Module 4: Paying bills and other expenses, and Module 6: Dealing with debt.

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for the public. This material is provided for educational 

and information purposes only. It is not a replacement for the guidance or advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not 

responsible for the advice or actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are limited to the materials 

that CFPB has prepared. 

This Tool may ask you to provide sensitive personal and financial information. The CFPB does not collect any information from you or the organization using this Tool. The CFPB is not 

responsible and has no control over how others may use the information that you provide to them about your personal or financial situation. The CFPB recommends that you do not 

include names or account numbers and that users follow their organization’s policies regarding retention, storage, and disposal of documents that contain personal information.
172 MODULE 5: GETTING THROUGH THE MONTH

 TOOL 1: CASH FLOW BUDGET
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 173

Tool 2:

Cash flow calendar

A cash flow approach to managing your money involves paying attention to the timing of your 

sources and uses of cash and other financial resources. This is important, because timing 

matters when you are making sure you have enough to cover your expenses. Tool 1: Cash flow 

budget uses a table to track those sources and uses from week-to-week. This tool takes the same 

cash flow approach, but uses a calendar format to plan for the weeks ahead.

Use the information from your Module 3, Tool 1: Income and resource tracker and Module 4’s

Spending tracker to create a cash flow calendar using the blank calendar provided here. Start 

each new month by carrying over your balance from last month. Then enter the sources and uses 

of cash and other financial resources for each day of the week. 

At the end of every week, take your beginning balance, add your total sources, and subtract your 

total uses. That number will be what you have left, your weekly ending balance. 

Here is a sample week to show you how the tool works:

Sun. Mon. Tues. Wed. Thurs. Fri. Sat. End of Week

31 1 2 3 4 5 6

Beginning bal.:

$130 +

Total sources

including SNAP:

$585 –

Total uses

$450 =

Ending bal.:

$265(including 

$100 in SNAP)

Sources

SNAP, 

$280

Pay, 

$305

Uses

Food, 

$180

Phone 

bill, $60

Gas, 

$30

Car 

Payment, 

$180
174 MODULE 5: GETTING THROUGH THE MONTH

 TOOL 2: CASH FLOW CALENDAR

______, 20__

Sun. Mon. Tues. Wed. Thurs. Fri. Sat. End of Week

__ __ __ __ __ __ __

Beginning bal.:

_________ +

Total sources:

_______ –

Total uses:

_______ =

Ending bal.:

__________

Sources

Uses

Reproduce this sheet to manage your cash flow for additional weeks.

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 

This Tool may ask you to provide sensitive personal and financial information. The CFPB does not collect any information from you 

or the organization using this Tool. The CFPB is not responsible and has no control over how others may use the information that 

you provide to them about your personal or financial situation. The CFPB recommends that you do not include names or account 

numbers and that users follow their organization’s policies regarding retention, storage, and disposal of documents that contain 

personal information.

8
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 175

Tool 3:

Improving cash flow checklist

If you created a cash flow using the spreadsheet or the calendar, you may find that some weeks 

are not working out—you are not able to pay your bills on time. 

Improving cash flow comes down to one of three strategies:

§ Smooth out cash flow by avoiding large periodic payment and making smaller payments 

throughout the month or year.

§ Cut out spending.

§ Increase income or other resources.

Sometimes short-term changes to expenses or finding ways to temporarily increase income can 

help improve your cash flow now, and sometimes the changes you make will need to stay in 

place for a long time to make a difference.

Some of these suggestions may not work for you. Check the ones that may be options for you

and use this checklist as a plan to put the ideas into action.

Strategy list

Check

if 

option 

for you

Strategy for improving cash 

flow

Tips and more information Notes

Smooth out cash flow

Negotiate new due dates for 

bills to better line up with when 

you get income.

Check with businesses you have 

had a long-standing relationship 

with first.

8
176 MODULE 5: GETTING THROUGH THE MONTH

 TOOL 3: IMPROVING CASH FLOW CHECKLIST

Negotiate splitting a monthly 

payment into two smaller 

payments.

For example, if a $700 rent 

payment is due the first of the 

month, see if you can make a 

$350 payment on the 1st and a 

$350 on the 15th.

Avoid large, lump sum or 

periodic payments by making 

monthly payments—car 

insurance and taxes, for 

example.

You may have to pay a small fee 

to make this arrangement, but it 

may make handling these 

payments more manageable.

Set up a savings account and 

automatically deposit the 

monthly amount of large, lump 

sum payments into the 

account so you are prepared 

when they are due.

For this you need regular income 

and a bank or credit union 

account.

Explore level payment plans 

for utilities.

This is especially important in 

extreme climates—with high 

heating bills in the winter or high 

cooling bills in the summer. You 

often have to be a customer in 

good standing to qualify for these 

programs. Check with your local 

utility providers.

Check to see if you qualify for 

an energy assistance 

program.

Ask for a referral to the agency in 

your community that manages 

energy assistance programs.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 177

Explore debt consolidation. If you have many debts and good 

credit, consider exploring debt 

consolidation with a bank or credit 

union. This can make managing 

your cash flow easier because the 

monthly payment may be smaller 

– but it may take you longer to 

completely pay off the debts and 

cost more in the long run. 

Remember that if you consolidate 

your debts into your mortgage, 

falling behind on those payments 

could put your home at risk. Be 

sure you understand the terms 

and are not paying more interest 

with your new loan.

See the Resources list at the end 

of the module for credit counseling 

links.

Refinance your car or home 

for lower interest rates if 

possible or explore extending 

the time you will repay the 

loan. If you have a home loan, 

talk with your lender about the 

possibility of a modification.

Be sure to do the math to ensure 

the new rate (including the fees) 

really does save you money over 

time. While it may cost you more 

in the long run and may impact 

your credit reports and scores, it 

may make monthly payments 

more manageable.

Check to make sure your 

withholding enough tax with 

your employer.

This can help ensure you do not

end up with a large income tax bill 

because your withholding was too 

low.

If you have student loans, 

check to see if you have 

repayment options.

See if you qualify for incomebased repayment or other 

programs. 

http://studentaid.ed.gov/repayloans/

Other:
178 MODULE 5: GETTING THROUGH THE MONTH

 TOOL 3: IMPROVING CASH FLOW CHECKLIST

Cut out spending

Television, Internet, Phone, 

and Cell phone Plans

Check with your provider about 

bundling and lower cost plans or 

discontinue cable.

Check to see if you qualify for a 

“Lifeline” phone rate. Visit 

http://www.fcc.gov and your 

state’s public utilities commission 

website

Review insurance; check to 

make sure you have the right 

deductibles for auto and home 

insurance.

Check to see if moving insurances 

to one company will save you 

money, and check for other 

discounts.

Find ways to save on energy:

• Turn off and unplug 

unused electric 

appliances.

• Insulate and use 

weather stripping 

around doors and 

windows.

• Set thermostat higher in 

summer and lower in 

winter.

Check to see if eligible for 

weatherization programs or other 

incentives.

Eliminate online video or 

music pass membership.

Eliminate gym/health club or 

discount store memberships if 

not using regularly.

Eliminate credit monitoring 

services if you are paying for 

them.

• You can check each of your three 

credit reports for free once a year 

at www.annualcreditreport.com. 

Some states have laws that allow 

for an additional credit report from 

each major credit reporting 

agency.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 179

Pay bills and renew license 

and registration on time to 

avoid late fees.

Return library materials, 

rented DVDs, etc. on time.

Access community resources 

for some living expenses.

See if you qualify for community 

food programs, clothing closets, 

transportation voucher programs, 

childcare subsidies, etc.

Other:

Increase income

Take another part-time job if 

your schedule allows.

Work odd jobs.

Apply for benefits for which 

you may qualify.

Visit http://www.benefits.gov

File taxes so that you can 

receive a refund if you qualify.

Consider saving some of your 

refund to help pay bills or cover 

emergencies for the rest of the 

year.

Other:

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 

This Tool may ask you to provide sensitive personal and financial information. The CFPB does not collect any information from you 

or the organization using this Tool. The CFPB is not responsible and has no control over how others may use the information that 

you provide to them about your personal or financial situation. The CFPB recommends that you do not include names or account 

numbers and that users follow their organization’s policies regarding retention, storage, and disposal of documents that contain 

personal information.
180 MODULE 5: GETTING THROUGH THE MONTH

 TOOL 3: IMPROVING CASH FLOW CHECKLIST

Resources

For MyMoney.gov budgeting resources, visit:

http://www.mymoney.gov/Fast/Pages/Results.aspx?k=Budgeting%20worksheets&s=All

If you want more information on budgeting, visit: 

http://www.mymoney.gov/tools/Pages/tools.aspx

For more information on benefits, visit:

http://www.benefits.gov

If you want more information about finding a job, visit this site to get started: 

http://www.dol.gov/dol/audience/aud-unemployed.htm

To find a one-stop career center located near you, visit: 

http://www.servicelocator.org

If you lose your job, visit the following for more information:

http://www.benefits.gov

http://www.dol.gov/ebsa/publications/joblosstoolkit.html#.UM6BmXPjkt8

Housing counselors can provide advice on buying a home, renting, defaults, foreclosures, 

and credit issues:

www.consumerfinance.gov/find-a-housing-counselor

If you would like help managing your debt or rebuilding credit, visit the National 

Foundation for Credit Counseling: 

http://www.nfcc.org/

For additional resources, visit the Consumer Financial Protection Bureau website:

http://www.consumerfinance.gov/AskCFPB

If you have a consumer complaint, visit:

http://www.consumerfinance.gov/complaint

The CFPB has prepared this material as a resource for the public. This material is provided for educational and information 

purposes only. It is not a replacement for the guidance or advice of an accountant, certified financial advisor, or otherwise qualified 

professional. The CFPB is not responsible for the advice or actions of the individuals or entities from which you received the CFPB 

educational materials. The CFPB’s educational efforts are limited to the materials that CFPB has prepared. 

v
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 181

MODULE 6:

Dealing with debt

What is debt?

Debt is money you have borrowed from a person or a business. When you owe someone money, 

you have a liability. When you owe money, you have to pay it back, sometimes in 

scheduled payments. You will often use money from your future income to make 

those payments.

While borrowing money may give you access to something today, you may have monthly 

payments for months or years going forward. This obligation can decrease your options in the 

future.

Debt is different from credit. Credit is the ability to borrow money. Debt results from using 

credit. You can have credit without having debt. For example, you may have a credit card on 

which you don’t currently owe money, because you paid the balance off and haven’t made new 

purchases with it.

Good debt, bad debt?

Sometimes people label debt as “good” debt or “bad” debt. 

Some debt can help you reach your goals or build assets for the future. People will often say that 

borrowing for your education, for a reliable car, to start a business, or to buy a home can be a 

good use of debt. 

But it’s not always that simple. For example, borrowing to further your education may be a good 

use of debt because earning a certification or a degree may lead to a better paying job and more 

job security. But if you take on the debt and don’t earn the certificate or degree, this student debt

has set you back instead of helping you reach your goals.

Taking out a loan to get a reliable car to get to and from your job can help you pay your bills and
182 MODULE 6: DEALING WITH DEBT

save for goals. However, if you borrow 100% of the 

car’s value, you may end up owing more than the car is 

worth. Or if you buy a more expensive car than you 

need, you’ll have less money for other bills each month. 

While it may get you to work, it might keep you from 

getting to your financial goals.

Borrowing money to start a business may help create 

income for yourself and others. If the business fails, 

however, you may end up owing money and not having 

any income you can use to make the payments.

Finally, taking out a loan to buy a home of your own 

may be a way to reach your personal goals. But if you 

are unable to keep up with the payments or you end up 

owing more than your home is worth, that debt may set 

you back for a long time.

That’s why even debt that many people consider “good” should be approached with caution.

Some people consider loans such as credit card debt, short-term loans, and pawn loans “bad” 

debt. This is because they may carry high fees and interest, and when they have been used for 

things you consume (like meals out, gifts, or a vacation) they don’t help build assets. But, these 

sources of debt can help cover a gap in your cash flow if you have a way to repay them. 

So, there is no one type of debt that is “good” or “bad.” That’s why it’s important to first 

understand your goal or your need. Then you can shop for the credit you need, especially for 

large purchases like a car or a home, before you make your final decision on your purchase.

Secured and unsecured debt

Another way to understand debt is whether it is secured or unsecured.

Secured debt is debt that has an asset attached to it. When debt is secured, a lender can collect 

that asset if you do not pay. Here are examples of secured debt:

Student loan debt

For many people, student loans 

make up a big portion of the debt 

they owe. Sometimes people 

borrow more than they will be able 

to afford given the likely pay they 

will earn in their profession. 

Sometimes people get into trouble 

because they do not understand the 

terms of their loans and the 

consequences of letting interest 

build up.

3
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 183

§ A home loan. The debt is secured with the home 

you are buying. If you do not pay your loan, the 

lender can foreclose on your home, sell it, and 

use the money from the sale to cover some or all 

of your loan.

§ An auto loan. The debt is secured with your car. 

If you do not pay your loan, the lender can 

repossess (repo) your car and sell it to cover 

some or all of the loan.

§ A pawn loan. The debt is secured with the item 

you have pawned. If you do not make payment 

when it is due, the pawned item is eventually 

sold.

§ A secured credit card. The debt is secured by 

funds you deposit at a bank or credit union. 

Your credit limit will generally equal your 

deposit. For example, if you deposit $300, your 

credit limit will be $300.

Unsecured debt does not have an asset attached to it. Here are examples of unsecured debt:

§ Credit card debt from an unsecured card

§ Department store charge card debt

§ Signature loans

§ Medical debt

§ Student loan debt

If these loans are not paid as agreed, since there is no asset to repossess, they often go directly to 

collections. For more information on student loan debt, see Tool 4: Student loan debt.

Using Tool 1: Debt worksheet, you can list all of your debts and determine whether they are 

secured or unsecured. 

Student loan debt

For many people, student loans 

make up a big portion of the debt 

they owe. Sometimes people 

borrow more than they will be able 

to afford given the likely pay they 

will earn in their profession. 

Sometimes people get into trouble 

because they do not understand the 

terms of their loans and the 

consequences of letting interest 

build up.

Rent-to-own versus 

installment plans 

In a rent-to-own arrangement, 

consumers lease items such as 

furniture, electronics, or appliances 

and typically have the option to 

purchase. 

This can be done by continuing to 

make payments for a set period of 

time or by paying off the balance 

during the term of the lease. If you 

don’t make the payments made as 

agreed, the item can be taken back 

and you don’t receive a refund for 

any of the rental payments.

3
184 MODULE 6: DEALING WITH DEBT

How much debt is too 

much?

One way to know if you have too much debt is based on 

how much stress your debt causes you. If you are 

worried about your debt, you may have too much. 

A more objective way to measure debt is the debt-toincome ratio. The debt-to-income ratio compares the 

amount of money you pay out each month for debt 

payments to your income before taxes and other 

deductions. The resulting number, a percentage, shows 

you how much of your income is dedicated to debt—

your debt load. The higher the percentage, the less 

financially secure you may be, because you have less 

left over to cover everything else. Everything else is all 

of the other needs, wants, and obligations you pay each 

month that are not 

debt. These include:

§ Rent

§ Savings

§ Taxes

§ Insurance

§ Utilities

§ Food

§ Clothing

§ Childcare

§ Health care (that has not turned into debt)

§ Child support and other court-ordered obligations

Debt-to-income ratio 

The debt-to-income ratio is a 

simple calculation:

Total of your monthly debt 

payments ÷ Monthly gross income 

(income before taxes).

The result is a percentage that tells 

you how much of your income is 

going toward covering your debt.

For example, if you have a debt-toincome ratio of 36%, you have 64 

cents out of every dollar you earn to 

pay for everything else, including 

all of your living expenses and 

taxes.

3
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 185

§ Charitable contributions and gifts

§ Other family expenses

Using Tool 2: Debt-to-income worksheet, you will determine what your debt load is. And if you 

find out that it is higher than you want, you can use Tool 3: Debt reduction worksheet to make a 

plan to get out of debt.

Payday loans and deposit advance products

A payday loan – which might also be called a “cash advance” or “check loan” – is a short-term 

loan, generally for $500 or less.

Payday loans generally come due your next payday. You must give lenders access to your 

checking account or write a check for the full balance in advance that the lender has an option of 

depositing when the loan comes due.

Other loan features can vary. For example, payday loans are often structured to be paid off in 

one lump-sum payment, but interest-only payments – "renewals" or “rollovers” – are not 

unusual. In some cases, payday loans may be structured so that they are repayable in 

installments over a longer period of time. 

Some ways that lenders might give you the loan funds are providing cash or a check, loading the 

funds onto a prepaid debit card, or electronically depositing the money into your checking 

account. 

The cost of the loan (finance charge) may range from $10 to $30 for every $100 borrowed. A 

typical two-week payday loan with a $15 per $100 fee equates to an annual percentage rate

(APR) of almost 400%. By comparison, APRs on credit cards can range from about 12 percent to 

30 percent. 

State laws and other factors can influence how much you can borrow and the fees you are 

charged. Some state laws do not permit payday lending and in other states lenders may choose 

not to do business rather than abide by the state’s regulations.

There are special protections through the Military Lending Act for active duty 

servicemembers and their dependents who use certain payday loans and other 

small dollar credit products.
186 MODULE 6: DEALING WITH DEBT

How do payday loans work?

Here is an example of how a 14-day payday loan generally works: 

Borrower visits a storefront payday lender and completes application (there is

generally no credit check or ability to repay the loan; the

borrower only needs a deposit account so he can write a post-dated

check). Loans also be taken out

Borrower gets loan (the median loan amount is $350) and pays $10-$20 per $100 

borrowed ($15 per $100 is the median fee).

The borrower provides the lender with 14-day post-dated check for the amount of 

the loan + the fee or $350 + $52.50 = $402.50 or authorization to present a debit 

against the borrower's account.

In 14 days, the loan is due. Often, the borrower does not have $402.50 to satisfy the 

debt. Instead he will pay the fee ($52.50) and renew the loan for another 14 days.

(Note: 14 days is used for example purposes only. Repayment may fall on the next 

payday or another minimum period as specified by state law.)

Every 14 days, the borrower must pay the full amount or renew the debt for $52.50. 

The average borrower has 10 transactions a year. Applied to this loan, that would 

mean a fee of $525 to borrow $350.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 187

Deposit advance loans are short-term loans made by banks. The loan is secured by the 

borrower's deposit account to which the bank has access. The loan is limited to a percentage of 

the recurring direct deposit. For example, the loan may be limited to the lesser of $500 or 50% 

of the scheduled direct deposit based on the amount from the previous deposit into the account.

Repayment is due the next time the direct deposit is made into the account. The bank sweeps 

the amount of the loan plus the fees from the account before any transactions can be made from 

the account. In some instances, this puts the borrower into overdraft (where she is charged more 

fees for any subsequent draws on the account).

Many financial institutions began discontinuing this product in 2013, but clients may still find 

them at some institutions.

If you are considering these products, it’s important to be aware of common misunderstandings 

and the facts about payday and deposit advance loans.

§ The money is borrowed for emergencies.

Fact: Most borrowers do not use their first loans for emergency expenses. The Pew 

Charitable Trusts’ Payday Lending in America33 found that 69% of first-time borrowers 

use the loan to pay for regular bills, while only 16% use them for emergencies such as a 

car repair.

§ The borrowers can pay back the loan. 

Fact: While they may pay it back on time, many borrowers have to either immediately 

take a new loan or take another one in the same pay-period. A CFPB study34 found that 

payday borrowers are in debt for a median of 199 days (nearly seven months) of the year 

and pay a median of $458 in fees (not including the principal). The Pew Charitable 

 

33 The Pew Charitable Trust State and Consumer Initiatives. Payday Lending in America. October 2013. 

http://www.pewstates.org/research/featured-collections/payday-lending-in-america-85899405692. 

34 Consumer Financial Protection Bureau. Consumer Financial Protection Bureau Study Finds Debt Trap Concerns 

with Payday and Deposit Advance Loans. April 2013. http://files.consumerfinance.gov/f/201304_cfpb_paydayfactsheet.pdf.
188 MODULE 6: DEALING WITH DEBT

Trust35 found similar results – that on average, payday borrowers are in debt for five 

months out of the year and pay an average of $520 in fees on top of the money they have 

borrowed.

The CFPB study also found that more than half of deposit advance borrowers end up 

taking out $3,000 in advances in a year. When they paid off their loan, those borrowers 

tended to take out a new loan in 12 days or less and were in debt more than 149 days in 

the year. 

Avoiding debt traps

If you are considering short-term loan products that meet an immediate need, it’s important to 

know how to avoid debt traps on your path to your goals. Short-term loans that have to be paid 

back in just one payment or a couple of payments may lead to a debt trap.

A debt trap is a situation where people take a loan and have to repeatedly take new 

loans to make the payment on the first loan. For many people, it can become difficult to 

escape the cycle of borrowing to cover the loan payment and still be able to pay for other 

expenses like food, rent, and transportation.

A debt trap can happen when people use short-term loans that have to be paid back in just a 

couple of payments and do not have the money to repay the loan and the finance charges when 

they are due. These loans have many things in common. They:

§ Are small dollar loans— generally under $500

§ Must be repaid quickly—14 days is the median term of payday loans, for example

§ Require the borrower to give creditors access to repayment through an authorization to 

present a check or debit a borrower’s deposit account

Make sure you understand how your loan will be repaid and how much the loan could ultimately 

cost you before agreeing to use this form of credit. If you find that you cannot make your loan 

 

35 The Pew Charitable Trust State and Consumer Initiatives. Payday Lending in America. October 2013. 

http://www.pewstates.org/research/featured-collections/payday-lending-in-america-85899405692.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 189

payment and cover your other expenses without taking a new loan, talk with the provider about 

repayment options that can allow you to pay over a longer period of time. 

Here is an example scenario using different options for taking care of emergency expenses. The 

example examines the costs of paying for an unexpected expense with emergency savings, a 

credit card, or a payday loan. 

COST TO REPLACE SPARK PLUGS IN YOUR AUTOMOBILE = $350

Emergency 

savings

Credit card Payday loan

Amount $350 $350 $350

APR36 21.99% annual percentage 

rate (APR)

$15 for every $100 borrowed for 14 days. 

This means a 391% annual percentage 

rate (APR).37

Payment

Must pay at least a certain 

amount each month.38 (For the 

purposes of the example, the 

individual is choosing a fixed 

monthly payment of $50.)

Must pay back loan amount ($350) plus 

fee ($52.50) within 14 days. If entire loan 

cannot be paid within 14 days, it can be 

rolled over (or extended) for another 14 

days for an additional fee of ($52.50).39

Total

additional

$0 You would pay $28.11 in 

interest in addition to the 

The total cost depends on how long it 

takes you to save up to pay back the 

 

36 These are for example purposes only. Actual credit card and payday loan terms vary, and some states restrict 

payday loans. The CFPB notes that, APRs on credit cards can range from about 12 percent to 30 percent. For payday 

loans, the CFPB notes that the cost of the loan (finance charge) may range from $10 to $30 for every $100 borrowed. 

A typical two-week payday loan with a $15 per $100 fee equates to an APR of almost 400%. See CFPB, What is a 

payday loan? November 6, 2013. See http://www.consumerfinance.gov/askcfpb/1567/what-payday-loan.html. 

37 Some states have adopted laws that limit the amount of loan above a certain amount and/or limit the interest rates 

of these loans.

38 Most credit card companies allow customers to pay a percentage of the amount owed, which makes the minimum 

payment vary from month to month. For the purposes of this example, we are showing a fixed monthly payment.

39 These numbers and terms are for example purposes only. Actual costs and terms of payday or signature loans will 

vary. See Consumer Financial Protection Bureau, Payday Loans and Deposit Advance Products: A White Paper of 

Initial Data Findings, April 24, 2013. See http://files.consumerfinance.gov/f/201304_cfpb_payday-dapwhitepaper.pdf.
190 MODULE 6: DEALING WITH DEBT

cost and 

time to 

repay

principal borrowed. It will take 

just over eight months40 to pay 

back the full amount.

entire loan. If you renew or roll over this 

loan seven times, you would be in debt 

for 14 additional weeks and could pay up 

to $367.50 in fees.41

Dealing with a debt collector

Often people find out they have a debt in collection when they receive a letter or phone call from 

a debt collection agency. Sometimes, they don’t remember owing a debt, so they are surprised 

when they’re told a debt has gone to collections. 

Debt collectors use persuasive techniques to get you to send in money to pay your debt. Before 

you send in money, you should confirm that: 

§ You actually owe the debt.

§ The collection isn’t fraudulent and is legitimate.

You may be able to confirm this information during 

an initial or follow-up discussion with the debt collector, but be careful of fraudulent debt 

collectors. You should ensure that you recognize the debt and know that you owe it and have not 

paid it before.

 

40 To pay off this credit card balance in full, the individual will have to make $50 payments for seven months, and 

then pay just over $28 in the eighth month.

41 Two–thirds of repeat payday borrowers take more than seven loans in one year. Consumer Financial Protection 

Bureau, Payday Loans and Deposit Advance Products.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 191

Many people know they do owe the debt and are able to 

confirm that the collector is the right person to pay 

when they receive the first phone call or letter. Paying 

right away can benefit you because it allows you to 

resolve the matter and take advantage of a settlement 

offer if one has been made. If you pay the debt, it’s 

important to request confirmation of payment or a 

payment receipt so that you have a record of it.

If you are uncertain that the debt is yours or that the 

collector has the authority to collect it, you can ask the 

debt collection agency to verify the debt. You can do 

this by sending a letter within 30 days of the debt 

collector’s providing you with certain information 

regarding the debt. That information includes the name 

of the creditor, the amount owed, and statements 

concerning how to dispute and seek verification of the 

debt. Use the sample letters in Tool 5: When debt

collectors call to get started.

Even if the debt may be yours, you have the right under the Fair Debt Collection Practices Act 

(FDCPA) to ask the debt collector to stop contacting you. Once you make this request, they can 

contact you to tell you that they won’t contact you again. Or they may notify you that they or the

creditor could take other action (for example, filing a lawsuit against you). Otherwise they must 

stop contacting you.

Stopping them from contacting you does not cancel the debt. You still might be 

sued or have debt reported to the credit reporting agencies (Equifax, Experian, 

and TransUnion).

You can ask a debt collector to stop contacting you at any time, so keep in mind that you could 

ask them for more information before deciding whether to tell them to stop contacting you.

When the phone rings... 

Sometimes it’s hard to know if a 

caller is really a debt collector. To 

avoid falling victim to a scam, ask 

for the name, number and address 

for the debt collector and request 

information about the debt in 

writing. 

Be wary of sharing your personal 

information by phone. If a stranger 

asks for your Social Security 

number, date of birth or bank 

account information, this can be a 

“red flag.”

3
192 MODULE 6: DEALING WITH DEBT

Your rights in debt collection 

The Fair Debt Collection Practices Act (FDCPA) says what debt collectors can and cannot 

do. This law covers businesses or individuals that collect the debt of other businesses. 

These are often called “third party debt collectors.” This law does not apply to businesses 

trying to collect their own debts.

The law states that debt collectors may not harass, oppress, or abuse you or any other 

people they contact. Some examples of harassment are:

§ Repeated phone calls that are intended to annoy, abuse, or harass you or any 

person answering the phone.

§ Obscene or profane language.

§ Threats of violence or harm.

§ Publishing lists of people who refuse to pay their debts (this does not include 

reporting information to a credit reporting company).

§ Calling you without telling you who they are

The law also says debt collectors cannot use false, deceptive, or misleading practices. This 

includes misrepresentations about the debt, including the amount owed, that the person 

is an attorney if they are not, threats to have you arrested if you cannot be, threats to do 

things that cannot legally be done, or threats to do things that the debt collector has no 

intention of doing.

Keep a file of all letters or documents a debt collector sends you and copies of anything 

you send to them. Also, write down dates and times of conversations along with notes 

about what you discussed. These records can help you if you have a dispute with a debt 

collector, meet with a lawyer, or go to court.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 193

Alternatives to high-cost credit

There are ways to avoid the risk of a debt trap if you’re in a situation where you need money 

quickly. 

If you are short on cash, consider other alternatives, including:

§ Using your own emergency savings

§ Using lower-cost short-term loan alternatives from a credit union or bank

§ Borrowing from a friend or family member

§ Using a credit card – while it will increase your monthly card payment, it may prove 

cheaper in the long run.

§ Negotiating for more time to pay if the loan is for a bill that is due

§ Bartering for part or all of what you are borrowing the money to cover

§ Determining whether the item or circumstance you are borrowing the money for is a 

need, an obligation, or a want. If it’s a want, consider whether it’s possible to spend less 

money for it, not purchasing it, or waiting until you have the money for it.

Medical debt42

For many Americans, medical debt comprises a large amount of the money they owe. Forty one 

percent of working age adults in America reported having trouble paying for medical bills in 

2012. 

Medical debt has increasingly been a major factor in decline in credit scores for some 

individuals. And medical debt is becoming a greater factor in the reason people file for 

 

42 For more information on medical debt and its impact on consumers see the CFPB’s Consumer Credit Reports: A 

study of medical and non-medical collections at http://www.consumerfinance.gov/reports/consumer-creditreports-a-study-of-medical-and-non-medical-collections/
194 MODULE 6: DEALING WITH DEBT

bankruptcy—they could make ends meet were it not for their medical debts.43 The majority of 

individuals who filed for bankruptcy due to medical debt had health insurance.44

Finally, once people have medical debt, they are much less likely to seek medical care—whether 

preventative or prescriptive.45 This can increase the amount they have to spend on treatment,

because by the time they get medical care, the situation has become more acute and, therefore, 

more expensive to address.

What are the factors that can lead to medical debt?

Medical debt is almost always the result of an unplanned event—someone 

becoming ill or injured. Even with health insurance, co-pays and deductibles can add up. 

This is one reason that emergency savings is important for building financial stability. 

Secondly, the costs of the care are almost never fully known upfront. Unlike the cost 

of a house or car, where you should know what you will pay when you sign the loan agreement,

when you accept responsibility for payment of your treatment at a hospital or other medical 

provider, you generally have no idea how much the treatment will cost. You may also not know 

your share of the cost.

Invoices and bills may be confusing. Rather than one itemized bill, you may receive several 

bills over a period of weeks or months with hospital stays or situations that involved multiple 

health care services providers. Because of this confusion, people may be more likely to not 

recognize the information contained on the invoice or hesitate or delay paying a medical bill. 

They may have questions about whether the amount was already paid by insurance, whether the 

correct amount was billed, or whether they actually received the billed treatment. 46

 

43 Associated Press, New Medical Billing Standards, February 13, 2014. See http://bigstory.ap.org/article/newbilling-standards-help-patients-debt

44 http://www.cnn.com/2009/HEALTH/06/05/bankruptcy.medical.bills/

45 Kalousova, Lucie and Burgard, Sarah A. Debt and Forgone Medical Care, University of Michigan Institute for 

Social Research. July 2012.

46 See Consumer Financial Protection Bureau, Consumer credit reports: A study of medical and non-medical 

collections, December 2014. See http://www.consumerfinance.gov/reports/consumer-credit-reports-a-study-ofmedical-and-non-medical-collections. 
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 195

And without knowing how much the total cost should be, how much the insurer will cover, and 

how much of the cost will be passed on to you, it becomes difficult to determine whether you are 

being charged the right amount. That leaves consumers in a position where they need to review 

each medical bill carefully and contact providers or insurers when they have questions. 47

Uninsured individuals are generally charged more for services. Insurance companies 

negotiate discounts for services. This means that if you are uninsured, your bill will likely be 

higher than the bill that someone who has insurance receives for the same procedures and care. 

So what can you do to avoid medical debt? 

While there are no easy answers, there are specific things you may be able to do to lessen the 

impact of medical debt:48

§ Get cost estimates up front—then you can decide whether to proceed or delay 

elective procedures.

§ Find out whether there is a prompt payment discount, which can be substantial.

This may mean cutting back in other areas for a few months in order to pay the bill and 

secure the discount.

§ Ask for a discount on the treatment.

§ Ask about “charity care” from the hospital and government before or immediately 

following treatment.

§ If you are asked to put a hospital bill on a credit card, watch out. Many 

hospitals have some obligation to provide for charity care for those who can’t afford 

treatment. Once you put your hospital bill on a credit card, you won’t be considered for a 

 

47 See Consumer Financial Protection Bureau, Consumer credit reports: A study of medical and non-medical 

collections, December 2014. See http://www.consumerfinance.gov/reports/consumer-credit-reports-a-study-ofmedical-and-non-medical-collections. The Healthcare Financial Management Association (HFMA) notes “There is 

confusion among healthcare consumers about how to obtain clear, understandable pricing information. The 

differences among healthcare charges and prices and the widespread variations in service, quality, and outcomes all 

are shrouded in an air of uncertainty and complexity. The all-too-common result is misunderstanding.” (Brian 

Workinger, Front-Line Perspectives on price Transparency and Estimation, HFM Magazine, Sept. 2014).

48 Ibid.
196 MODULE 6: DEALING WITH DEBT

later write-down of your bill under the charity care program. Some medical providers 

even offer a credit card for you to use at the provider’s office. Healthcare credit cards can 

have tricky terms, so make sure you know what you’re getting into. For tips on 

healthcare credit cards see: http://www.consumerfinance.gov/blog/whats-the-dealwith-health-care-credit-cards-four-things-you-should-know/

§ If you can’t afford to pay for the care even after charity care and discounts have been 

applied, take steps to work with the provider to set up a reasonable 

repayment plan. As you negotiate, ensure that as long as you pay as agreed, reports 

made to credit reporting agencies will reflect that you are making payments as required 

by the plan. Be sure to get your repayment plan agreement in writing. Also, consider 

asking for the following terms:

No interest on the debt

Monthly statements showing the amount paid and the outstanding balance

Request that the debt not be turned over to a third party collection agency – that the debt 

servicing stays in-house 

Be sure you do not sign an agreement that states you will make full payment of the debt 

if you are late or miss a payment on your plan.

§ Check your credit report to make sure resolved bills are reported accurately or any 

errors are removed from your credit history. If the credit reporting agency doesn’t 

respond, contact you state’s consumer protection agency, attorney general, or the CFPB.

§ If you do get sued by a medical service provider or hospital, respond. Get 

legal assistance from the legal aid organization in your community or a lawyer.

Be sure you do not jeopardize your ability to earn income or pay for your shelter or food because 

you have paid more income than you can afford to cover a medical debt.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 197

Tool 1:

Debt worksheet

Before you can make a plan for your debt, you have to know where you stand. You can start by 

making a list of who you owe money to and how much you owe them. This is the first 

step in managing and reducing your debt.

Be sure to include debts to friends and family, credit card companies, banks, department stores, 

payday lenders, and the federal government (for student loans and income taxes, for example). 

On the debt management worksheet, you will include: 

§ The person, business, or organization you own money to

§ The amount you owe them

§ The amount of your monthly payment, which includes the principal, interest payments, 

and any fees you may owe

§ The interest rate you are paying and other important terms

To complete this worksheet, you may need to get all of your bills together in one place.

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 

This Tool may ask you to provide sensitive personal and financial information. The CFPB does not collect any information from you 

or the organization using this Tool. The CFPB is not responsible and has no control over how others may use the information that 

you provide to them about your personal or financial situation. The CFPB recommends that you do not include names or account 

numbers and that users follow their organization’s policies regarding retention, storage, and disposal of documents that contain 

personal information.
198 MODULE 6: DEALING WITH DEBT

 TOOL 1: DEBT WORKSHEET

Debt worksheet

Use this worksheet to list who you owe money to and how much you owe them. This is the first 

step in managing and reducing your debt. Lender Total amount borrowed Amount 

outstandingTotal paymentamount Payment due dateSecured? If yes, by what.Interest rateOther important terms

Mortgage

Vehicle loan

Appliance/furniture loan

Student loan

Credit card/Charge card debt

Payday loan

Car title loan

Other

Total monthly debt payment

8
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 199

Tool 2:

Debt-to-income worksheet

Your debt-to-income ratio is like your blood pressure. Your blood pressure measures the 

amount of pressure on your heart; your debt-to-income ratio measures how much pressure debt 

is putting on your budget. 

Your debt-to-income ratio is a simple calculation. It is the total of your monthly debt payments 

divided by your monthly gross income. Gross income is the amount of your income before any 

taxes or other deductions are taken.

The result is a percentage that tells you how much of your income is going toward covering your 

debt. 

Another way of seeing the debt-to-income ratio is that it represents how much of every dollar

you earn goes to cover your debt. 

For example, if your debt-to-income ratio is .45, or 45%, then 45 cents out of every dollar you 

earn goes toward your debt. This leaves you with 55 cents of every dollar to cover your rent, 

taxes, insurance, utilities, food, clothing, child care, and so on.

In addition to using the debt-to-income ratio to measure how much pressure debt is putting on 

your budget, you can also use it as a benchmark if you take steps to reduce your debt. As you pay 

down your debts, your debt-to-income ratio will also decline. This means money is being freed 

up to use on other things like saving for your goals, unexpected expenses, and emergencies.
200 MODULE 6: DEALING WITH DEBT

 TOOL 2: DEBT-TO-INCOME WORKSHEET

Figure out your debt-to-income ratio

Your total monthly debt payment (from Tool 1)

DIVIDED BY

Your monthly gross income (Income before taxes)

EQUALS

Your current debt-to-income ratio

Understanding your debt-to-income analysis

If your debt-to-income ratio is higher than certain percentages, it could be difficult to pay all 

your monthly bills because so much of your income will be going to cover debts. A high debt-toincome ratio may also impact your ability to get additional credit, because creditors may be 

concerned that you wouldn’t be able to handle their debt on top of what you already owe.

The following debt-to-income ratio ranges are guidelines, not rules. In fact, many creditors set 

their own rules. What is an acceptable level of debt to one creditor may not be to another. 

§ For renters: Consider maintaining a debt-to-income ratio of 15% - 20% or 

less. 

o This means that monthly credit card payments, student loan payments, auto loan 

payment, and other debts should take up 20% or less of your gross income.

§ For homeowners: Consider maintaining a debt-to-income ratio of 28% - 35% 

or less just for the mortgage (home loan), taxes, and insurance.

o This includes the monthly principal, interest, taxes, and insurance (called PITI).

§ For homeowners: Consider maintaining a debt-to-income ratio for all debts 

of 36% or less.

o This means that if you have a mortgage and other debts—credit card payments, 

student loan payments, auto loan payment, and payday loan payments–your debt-toincome ratio should be below 36%.

8
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 201

o If you have court-ordered, fixed payments, such as child support, count these as debt 

for this purpose.

o Some lenders will go up to 43% or higher for all debt.49

If your debt-to-income ratio is above these limits, you may want to use the 

following tool to develop a plan to reduce your debt and lower your debt-to-income 

ratio.

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 

This Tool may ask you to provide sensitive personal and financial information. The CFPB does not collect any information from you 

or the organization using this Tool. The CFPB is not responsible and has no control over how others may use the information that 

you provide to them about your personal or financial situation. The CFPB recommends that you do not include names or account 

numbers and that users follow their organization’s policies regarding retention, storage, and disposal of documents that contain 

personal information.

 

49 See http://www.fha.com/fha_requirements_debt. 
202 MODULE 6: DEALING WITH DEBT

 TOOL 2: DEBT-TO-INCOME WORKSHEET
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 203

Tool 3:

Debt-reduction worksheet

When it comes to reducing your debt, there are two basic strategies:

Highest interest rate method

Focus on the unsecured debt with the highest rate of interest, and eliminate it as quickly as 

possible, because it is costing you the most. Once it is paid off, focus on the next most expensive 

debt.

PRO CON

You eliminate the most costly debt first. In the 

long-run, this method can save you money.

You may not feel like you are making progress 

very quickly, especially if this debt is large.

Snowball method

Focus on the smallest debt. Get rid of it as soon as possible. Once you have paid it off in full, 

continue with the payment, but now dedicate it to the next smallest debt. This is called the 

“snow ball method.” You create “a snow ball of debt payments” that keeps getting bigger as you 

eliminate each debt. How? You keep making the payments, but you are redirecting them to the 

next debt as each debt is paid off.

PRO CON

You may see progress quickly, especially if you 

have many small debts. For some people, this 

creates momentum and motivation.

You may pay more in total because you are not 

necessarily eliminating your most costly debt.
204 MODULE 6: DEALING WITH DEBT

 TOOL 3: DEBT-REDUCTION WORKSHEET

There are other things you can do, too.

§ Call your creditors to see if they will lower your interest rates. If you have paid all of your 

bills on time, they may lower it to maintain your loyalty. If you are in a difficult position, 

you could explain your hardship and ask them to lower the rate.

§ Get another job in the short-term. Use all of your additional earnings to eliminate debts.

§ Sell something, and use the income to pay off a debt or debts.

§ If you are eligible, file for tax credits, and use your refund to pay down or eliminate 

debts.

Debt reduction worksheet

Check the method you are going to use, and then follow the instructions.

§ Highest interest rate method

§ List your debts from highest rate to lowest rate.

§ In the column labeled Extra Payment, list the extra payment you will dedicate to the 

debt with the highest interest rate until you have it paid off.

§ When this debt is paid off, allocate the entire payment (monthly payment + extra 

payment) you were making to the next debt on the list.

§ Snowball method

§ List your debts from smallest to largest in terms of the amount outstanding.

§ In the column labeled Extra payment, list the extra payment you will dedicate to the 

smallest debt until you have it paid off.

§ When this debt is paid off, allocate the entire payment (monthly payment + extra 

payment) you were making to the next debt on the list.

8
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 205 Lender Total amount borrowed Amount out

standing

Monthly paymentExtra paymentMonthly Due date Date paid off in full

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are

limited to the materials that CFPB has prepared. 

This Tool may ask you to provide sensitive personal and financial information. The CFPB does not collect any information from you 

or the organization using this Tool. The CFPB is not responsible and has no control over how others may use the information that 

you provide to them about your personal or financial situation. The CFPB recommends that you do not include names or account 

numbers and that users follow their organization’s policies regarding retention, storage, and disposal of documents that contain 

personal information.
206 MODULE 6: DEALING WITH DEBT

 TOOL 3: DEBT-REDUCTION WORKSHEET
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 207

Tool 4:

Student loan debt

The CPFB has a section on its website dedicated entirely to helping you plan for ways to pay for 

postsecondary education. In fact, the tool will help you think through the entire process of 

planning for and paying for school including:

§ Researching schools

§ Filling out the Free Application for Federal Student Aid (FAFSA), a first step in 

figuring out how to pay for college

§ Choosing a loan

§ Comparing financial aid packages and college costs across more than one school

§ Managing your money while in college

§ Repaying your student loans

If you have student loan debt, start with the Repaying Your Student Loans section of the tool, 

which can be accessed at: http://www.consumerfinance.gov/paying-for-college/repay-studentdebt/#Question-1.

Repaying federal student loans

There are two general kinds of student loans: federal student loans and private student loans. 

Federal student loans are loans that are funded by the federal government. Private 

student loans are nonfederal loans made by a lender such as a bank, credit union, state 

agency, or a school. In both federal and private student loans, delinquent payment will impact 

your credit history and scores and may result in collections. Private student loans do not offer 

the flexible repayment terms or borrower protections featured by federal student loans.

There are many options for paying back federal student loans. Do not ignore student loan 

paperwork—nonpayment and delinquency reduces options for payment plans as many require 

loans in good standing to qualify. A summary of some of the repayment options includes:
208 MODULE 6: DEALING WITH DEBT

 TOOL 4: STUDENT LOAN DEBT

§ Standard repayment. Most borrowers start with this payment plan. This repayment 

plan has fixed payment of at least $50/month for up to 10 years.

§ Graduated repayment. The payment is lower the first year and then gradually 

increased every 2 years for up to 10 years.

§ Extended repayment. The payment is fixed or graduated for up to 25 years. The 

monthly payments are lower than the standard or graduated repayment plans, but you 

will pay more interest over the life the loan(s).

§ Income-Based Repayment (IBR). Payment is limited to 15% of discretionary 

income, which is the difference between your adjusted gross income and 150% of the 

Federal Poverty Guidelines. Payments change as income changes and the terms can last 

up to 25 years. After 25 years of consistent payment (you have missed no payments or 

caught up with payments), the loan will be forgiven. You will have to pay income tax on 

the portion of the loan that is forgiven. To qualify for IBR, you must be able to show 

partial hardship.

§ Pay as you earn. Payment is limited to 10% of discretionary income as defined above, 

payment changes as income changes, and the loan term is 20 years. After 20 years of 

payments, the loan is forgiven as described above, and taxes will be owed on the amount 

forgiven. To qualify for pay as you earn, you must be able to show partial hardship.

§ Consolidation loan. You pay off all of your existing federal student loans with a new 

loan. This simplifies paperwork and payment for you—you go from monthly payments 

on multiple loans to one payment per month on the one new loan. Your loans must be in 

good standing to qualify. This results in lower monthly payments as the term is 30 years; 

however, you will pay more interest over the life of the loan.

You may also qualify for deferment or forbearance in certain circumstances. In deferment, 

payment of both principal and interest is delayed. If you have a subsidized federal loan, the 

government pays your interest during the deferment. Otherwise you must pay interest or it 

accrues, which means builds up. When interest builds up on student loans, it becomes part of 

what you owe. This means you ultimately end up paying interest on the interest. Deferments 

are only granted for specific circumstances including:

§ Enrollment in college, a trade school, a graduate fellowship, or a rehabilitation program 

for individuals with disabilities
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 209

§ During unemployment

§ During military services

§ During times of economic hardship, including Peace Corps service

Forbearance means that you stop paying or pay a lesser amount on your loan for a 12-month 

period. Interest accrues during forbearance.

When applying for a repayment option, be sure to continue making your loan payments until 

you receive written notification that you have been approved for IBR or forbearance, for 

example. This ensures your loan continues to be in good standing. Finally, you may also apply 

for loan forgiveness, cancellation, or discharge in the following situations:

§ Total and permanent disability

§ Death (someone would apply on your behalf)

§ Closed school

§ Teacher loan forgiveness ( if you are a teacher working in certain educational settings)

§ Public services loan forgiveness (if you work in a public service sector and have made 120 

loan payments)

Except for the above circumstances, it is very difficult to eliminate federal student loan debt 

even in bankruptcy. If you are interested in filing bankruptcy to discharge your student loans, 

you may want to talk with a bankruptcy lawyer.

It’s important to note that unpaid federal student loans can be collected in special 

ways. For instance, the Department of Education can garnish some federal benefits, such as 

Social Security and certain Veterans’ Assistance benefits. If you are afraid that your federal 

benefits could be garnished to pay off federal student loans, you may want to consider talking to 

a lawyer. 

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 
210 MODULE 6: DEALING WITH DEBT

 TOOL 4: STUDENT LOAN DEBT
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 211

Tool 5:

When debt collectors call

Debt collectors use persuasive techniques to get you to send in money to pay your debt. Before 

you send in money, you should confirm that: 

§ You actually owe the debt.

§ The collection isn’t fraudulent and is legitimate.

You may be able to confirm this information during an initial or follow-up discussion with the 

debt collector, but be careful of fraudulent debt collectors. You should ensure that you recognize 

the debt and know that you owe it and have not paid it before. 

The letter you receive from the debt collector should contain a notice about your right to request 

more information about the debt.

If you are contacted by debt collectors, remember that federal law prohibits a debt collector 

from deceiving you by threatening to take actions they can’t take or don’t intend to take.

Ask for more information

If you have questions about the debt, ask the debt collection agency to verify the debt before you 

send money or acknowledge the debt. You can do this by sending a letter within 30 days of the 

debt collector’s providing you with certain information regarding the debt. That information 

includes the name of the creditor, the amount owed, and statements concerning how to dispute 

and seek verification of the debt.

You can use the sample letter on the next page to ask for more information about this debt. 

§ Read the information below.

§ Edit the letter as needed to fit your situation. Delete any bullets that don’t apply to you, 

or isn’t information you’re looking for.

§ Print and send the letter as soon as you can. Keep a copy for your records.
212 MODULE 6: DEALING WITH DEBT

 TOOL 5: WHEN DEBT COLLECTORS CALL

Send this letter as soon as you can and, if at all possible, within 30 days of when a debt 

collector provides you with certain information regarding the debt. That information includes 

the name of the creditor, the amount owed, and statements concerning how to dispute and seek 

verification of the debt.

Even if 30 days have passed, you can still ask for the information.

If you ask in writing before 30 days have passed, a debt collector has certain legal 

responsibilities to give you some information. 

If the debt collector makes vague statements about what will happen if you do not pay, read 

their response to your letter carefully. Debt collectors are prohibited from deceiving you 

by threatening to take actions they can’t take or don’t intend to take. But if they tell you that they 

intend to sue you, you should take that seriously.

State laws have statutes of limitations, or limited time periods when creditors or debt collectors 

can file a lawsuit to collect a debt. These periods of time can be two years or longer; the period of 

time varies by state and by the type of debt. In some states, even a partial payment on the debt 

will restart the time period. You may want to consult an attorney or the applicable law in your 

state to know when the statute of limitations expires before making any payment on a debt.

Knowing whether or not a debt collector is licensed is useful (though not all states require 

licenses) because if the debt collector isn’t conducting itself properly, you can contact the state 

licensing agency.

For additional sample letters you can use if you have been contacted by a debt collector and 

want to dispute the debt, to specify how you wish to be contacted, or to request that the collector 

contact you through your lawyer, visit http://www.consumerfinance.gov/askcfpb/1695/ivebeen-contacted-debt-collector-how-do-i-reply.html.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 213

Example letter to a debt collector asking to verify the debt

[Your name]

[Your return address] 

[Date]

[Debt collector name] 

[Debt collector address]

Re: [Account number for the debt, if you have it]

Dear [Debt collector name]:

I am responding to your contact about a debt you are trying to collect. You contacted me 

by [phone/mail], on [date] and identified the debt as [any information they gave you 

about the debt]. Please supply the information below so that I can be fully informed:

Why you think I owe the debt and to whom I owe it, including:

§ The name and address of the creditor to whom the debt is currently owed, the 

account number used by that creditor, and the amount owed.

o If this debt started with a different creditor, provide the name and address of 

the original creditor, the account number used by that creditor, and the 

amount owed to that creditor at the time it was transferred. When you 

identify the original creditor, please provide any other name by which I 

might know them, if that is different from the official name. In addition, tell 

me when the current creditor obtained the debt and who the current creditor 

obtained it from.

o Provide verification and documentation that there is a valid basis for 

claiming that I am required to pay the debt to the current creditor. For 

example, can you provide a copy of the written agreement that created my 

original requirement to pay?
214 MODULE 6: DEALING WITH DEBT

 TOOL 5: WHEN DEBT COLLECTORS CALL

o If you are asking that I pay a debt that somebody else is or was required to 

pay, identify that person. Provide verification and documentation about why 

this is a debt that I am required to pay.

The amount and age of the debt, specifically:

§ A copy of the last billing statement sent to me by the original creditor.

§ State the amount of the debt when you obtained it, and when that was.

§ If there have been any additional interest, fees or charges added since the last 

billing statement from the original creditor, provide an itemization showing the 

dates and amount of each added amount. In addition, explain how the added 

interest, fees or other charges are expressly authorized by the agreement 

creating the debt or are permitted by law.

§ If there have been any payments or other reductions since the last billing 

statement from the original creditor, provide an itemization showing the dates 

and amount of each of them.

§ If there have been any other changes or adjustments since the last billing 

statement from the original creditor, please provide full verification and 

documentation of the amount you are trying to collect. Explain how that amount 

was calculated. In addition, explain how the other changes or adjustments are 

expressly authorized by the agreement creating the debt or permitted by law.

§ Tell me when the creditor claims this debt became due and when it became 

delinquent.

§ Identify the date of the last payment made on this account.

§ Have you made a determination that this debt is within the statute of limitations 

applicable to it? Tell me when you think the statute of limitations expires for this 

debt, and how you determined that.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 215

You can ask a debt collector to stop contacting you

The following example letter tells the debt collector to stop contacting you unless they can show 

evidence that you are responsible for this debt. Stopping contact does not cancel the debt. So, if 

the debt collector still believes you really are responsible for the debt, they could still take other 

Details about your authority to collect this debt.

§ I would like more information about your firm before I discuss the debt with 

you. Does your firm have a debt collection license from my state? If not, say why 

not. If so, provide the date of the license, the name on the license, the license 

number, and the name, address and telephone number of the state agency 

issuing the license.

§ If you are contacting me from a place outside my state, does your firm have a 

debt collection license from that place? If so, provide the date of the license, the 

name on the license, the license number, and the name, address and telephone 

number of the state agency issuing the license.

I have asked for this information because I have some questions. I need to hear from 

you to make an informed decision about your claim that I owe this money. I am open to 

communicating with you for this purpose. In order to make sure that I am not put at 

any disadvantage, in the meantime please treat this debt as being in dispute and under 

discussion between us.

In addition to providing the information requested above, please let me know whether 

you are prepared to accept less than the balance you are claiming is owed. If so, please 

tell me in writing your offer, with the amount you will accept to fully resolve the 

account.

Thank you for your cooperation. 

Sincerely,

[Your name]
216 MODULE 6: DEALING WITH DEBT

 TOOL 5: WHEN DEBT COLLECTORS CALL

action. For example, you still might be sued or have the status of the debt reported to one or all 

of the three credit reporting agencies—Equifax, Experian, and TransUnion.

You may not want to make a request to stop contact if the debt is your home 

mortgage. If you ask your mortgage servicer to stop contacting you, the servicer may not have 

to reach out to tell you about options that you may have to avoid foreclosure.

Example letter asking a debt collector to stop contacting you

[Your name]

[Your return address]

[Date]

[Debt collector name]

[Debt collector Address]

Re: [Account number for the debt, if you have it]

Dear debt collector,

I am responding to your contact about a debt you are attempting to collect. You 

contacted me by [phone/mail], on [date]. You identified the debt as [any information 

they gave you about the debt].

Please stop all communication with me and with this address about this debt.

Record that I dispute having any obligation for this debt. If you forward or return this 

debt to another company, please indicate to them that it is disputed. If you report it to a 

credit bureau (or have already done so), also report that the debt is disputed.

Thank you for your cooperation. 

Sincerely,

[Your name]
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 217

Resources

CFPB.gov, Know Before You Owe: 

http://www.consumerfinance.gov/knowbeforeyouowe

Consumer.gov, Coping with Debt:

http://www.consumer.ftc.gov/articles/0150-coping-debt

MyCreditUnion.gov, Pocket Cents: 

http://www.mycreditunion.gov/what-credit-unions-can-do/Pages/paying-off-CreditCards.aspx

StudentAid.ed.gov, Repay Your Loans: 

http://studentaid.ed.gov/repay-loans

Medicare.gov, Four Programs that Can Help You Pay Your Medical Expenses:

http://www.medicare.gov/Pubs/pdf/11445.pdf

If you have a medical need you cannot afford, visit your state department of health and 

human services listed here:

http://www.hhs.gov/recovery/statewebsites.html

If you would like help managing your debt or rebuilding credit, visit the National 

Foundation for Credit Counseling: 

http://www.nfcc.org

Housing counselors can provide advice on buying a home, renting, defaults, foreclosures, 

and credit issues: 

www.consumerfinance.gov/find-a-housing-counselor

For information on finding a lawyer to represent you in a lawsuit by a creditor or debt 

collector:

http://www.consumerfinance.gov/askcfpb/1433/how-do-i-find-lawyer-or-attorneyrepresent-me-lawsuit-creditor-or-debt-collector.html

For additional resources, visit the Consumer Financial Protection Bureau website:

http://www.consumerfinance.gov/AskCFPB

v
218 MODULE 6: DEALING WITH DEBT

 TOOL 5: WHEN DEBT COLLECTORS CALL

If you have a consumer complaint, visit:

http://www.consumerfinance.gov/complaint

This tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 219

MODULE 7:

Understanding credit reports 

and scores

People sometimes confuse the words debt and credit because they are both connected to 

borrowing money. Credit is your ability to borrow money if you want a loan or mortgage. Debt is 

the money you owe when you take on a loan. 

When you use your credit and have loans to pay, your track record in making your payments 

becomes part of your credit report. A credit report is a consumer report that looks at some of 

your bill paying history, public record information, and a record of your applications for credit. 

Your credit reports show information about how you have used credit, such as how much credit 

you have, how much of your available credit you are using, whether you have made your 

payments on time, and whether anyone has sent a delinquent (late) debt you owe to a debt 

collector.

Credit scores are calculated using the information in your credit report, and many lenders use 

them to decide how much money they can lend you and how much interest to charge.

Why do credit reports and scores matter?

Some people say credit reports and scores don’t matter to them, because they never plan to get a 

loan. But many different people and businesses use reports and scores to make decisions about 

you.

§ A bank or credit card will use them to decide whether to give you a loan or offer you a 

credit card.
220 MODULE 7: UNDERSTANDING CREDIT REPORTS AND SCORES

§ A credit card company may use them to decide what interest rate you will pay on your 

future charges if you are approved.

§ A landlord may use your reports or scores to determine whether to rent an apartment to 

you. 

§ In many states, an insurance company may use your reports or scores to determine 

whether to give you insurance coverage and the rates you will pay for coverage.

§ Other service providers, like cell phone and utilities companies, may use them to screen 

you for deposit levels and cost of service.

§ A potential employer may use your reports to determine whether you will get a job or a

security clearance for a job. (Note: According to the credit reporting agencies, credit 

scores are not used by employers. Instead, a special version of the credit report is used by 

employers. Some states do not allow employers to use these reports in their hiring 

decisions unless credit history is relevant to the job’s duties.)

§ An existing employer may use your reports to determine whether you will get or keep a 

security clearance.

Having a positive credit history and good credit scores can open doors for you. Not having a 

positive credit history or good credit scores can create obstacles for you and end up costing you 

more money in terms of the price you will pay for loans, credit cards, and other services. 

That’s why it’s important to pay bills on time and pay attention to what’s in your credit report. 

The score is calculated based on the information in the report – so at least once a year, take the 

time to make sure the information in your report is accurate.

What is in a credit report?

Companies collect information about consumers from many sources, some of which are called 

information furnishers. Credit reporting agencies organize this information into reports and sell 

these reports to businesses so they can make decisions about you. The biggest nationwide credit 

reporting agencies or credit bureaus that make credit reports include Equifax, Experian, and 

TransUnion. Each of these companies is likely to have a file on you. Your files at all three are 

likely to be similar, but there may be differences.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 221

A credit report contains five sections. These sections include:

§ Header/identifying information—This includes your name and current address, as 

well as other information that can be used to distinguish or trace your identity, either by 

itself, like your Social Security number, or when combined with other personal 

information, including date and place of birth. This information may not be complete—

all of the jobs you have held, for example, may not be listed. But what is listed should be 

accurate. A credit report does not include some personal information such as race or 

ethnicity.

§ Public record information—This section includes public record data of a financial 

nature, including consumer bankruptcies, judgments, and state and federal tax liens. 

Records of arrests and convictions generally do not appear on your credit file, but other 

types of consumer reporting agencies, such as employment background screening 

agencies, often include them. Other public records that usually do not appear in credit 

reports are marriage records, adoptions, and records of civil suits that have not resulted 

in judgments. 

§ Collection agency account information—This section will show if you have or have 

had any accounts with a collection agency and the status of those accounts. 

§ Credit account information—This section may include accounts you have now or 

that you had before with creditors. This may include:

□ The company name

□ Account number

□ Date opened

□ Last activity

□ Type of account and status

□ Date closed if the account is no longer open

□ Credit limit

□ Items as of date (any amount currently owed and whether you are current or late 

with payments) and the balance
222 MODULE 7: UNDERSTANDING CREDIT REPORTS AND SCORES

□ Whether you have a past due amount and the number of payments that were 30, 

60, and 90 days late

□ Whether the account was charged off

□ The date information was reported to the credit bureau. 

§ Some accounts may not be listed, especially older accounts or those you have closed. So there 

may be inconsistencies across credit files and credit reporting agencies in the contents of this 

section. It is important to make sure what is listed, however, does or did belong to you.

§ Inquiries made to your account—Companies look at your credit report when you 

apply for credit, when they review your account, or when they offer you a special 

promotional rate. When you apply for credit and a lender reviews your credit report, it is 

listed as an “inquiry” on your report. You will see promotional inquiries, periodic reviews 

of your credit history by one of your creditors, and your requests for a copy of your report 

when you obtain your own report, but these aren’t listed as an “inquiry” when your report 

is provided to others.

§ Consumer reporting agencies collect this information and sell it to other businesses,

which use it to make decisions about you. How do they use this information to make 

decisions? Businesses that use this information believe that how you have handled credit 

in the past is a good predictor of how you will handle it in the future. If you have 

struggled with managing your credit in the past (especially the recent past), they believe 

you are likely to struggle again.

Negative information

In general, negative information can be reported to those who request your credit report for only 

a specified period of time—seven years for most items. A bankruptcy can stay on your credit 

report for 10 years, and certain other court records can be reported on your credit report for 

longer than seven years. For civil suits and judgments, as well as arrest records, the information 

can be reported on your credit report for seven years or for the duration allowed by the statute of 

limitations, whichever is longer. For criminal convictions, there’s no time limit. There is no legal 

limit to the length of time that positive information can stay on your credit report.

Even though consumer reporting agency cannot include information that is beyond the limits 

provided in the Fair Credit Reporting Act in most consumer credit reports, they may continue to 
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 223

keep the information in your file. Why? Because there is no time limit in terms of reporting 

information (positive or negative) when you are:

§ Applying for credit of $150,000 or more

§ Applying for life insurance with a face value of $150,000 or more

§ Applying for a job with an annual salary of $75,000 or more

Example credit report

Each of the three major credit reporting agencies—Equifax, Experian, and TransUnion—has its 

own presentation format. This example of a credit report that highlights the key sections you 

will find in all three agencies’ credit reports. It is an example credit report and not based on the 

format of any one credit reporting agency. Each agency’s format varies in layout, look, and level 

of detail reported.
224 MODULE 7: UNDERSTANDING CREDIT REPORTS AND SCORES

Example document: 

This includes your name, current address, as well as other information that can be used to 

distinguish your identity by itself like your Social Security number, or when combined with other 

personal information, including date and place of birth.

File number: 12345678 

Date issued: 9/30/2013

Personal information

Name:

Miguel Smith

SSN:

XXX-XX-1234

Other names:

Miguel S Smith

Miguel Simon Smith

Date of birth:

12-1-1980

Telephone number:

555-555-1000

Addresses reported:

457 First Street, Littletown, MI 09876

13476 Avenue A, Big City, WI 43526

Employment data reported

Employer name:

Riviera Restaurants

Position:

Manager

Date reported:

3/2013

Hired:

11/2010

Employer:

Freer Chiropractic College

Position:

Food services

Date reported:

6/2008

Hired:

3/2008
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 225

Public Records

This section includes public record data of a financial nature, including consumer 

bankruptcies, judgments, and state and federal tax liens.

Big City Wisconsin Court Docket# 200900001467

515 C St, NE, Big City, WI 43528

Date filed: 

8/3/2009

Type: 

Chapter 7 Bankruptcy

Amount: 

$11,987

Responsibility: 

Individual

Big City Municipal Court Docket# 200700056712

4326 Fourth Street, SW, Big City, WI 43530

Date filed: 

4/14/2007

Type: 

Civil Judgment

Amount: 

$4,763

Responsibility: 

Individual

Plaintiff: 

Bank of Big City

Plaintiff attorney: 

Lisa Perry

Collections

This section will show if you have any accounts with a collection agency and the 

status of those accounts.

Reliable collections (Y76381): Account# 3629

Original creditor: 

ABC Megastore

Amount placed: 

$2,500

Opened: 

7/2/2009

Account type: 

Open

Balance: 

$1,000

Responsibility: 

Individual
226 MODULE 7: UNDERSTANDING CREDIT REPORTS AND SCORES

Account information

This section includes accounts you have now or that you had before with 

creditors.

Littletown Bank (B62391), Account# 2010004637

Balance: 

$14,285

Pay status:

30 days past due

Date updated: 

8/30/2013

Account type: 

Automobile

High balance:

$16,500

Responsibility: 

Individual

Past due: 

$395

Date opened:

2/5/2013

Terms: 

$395/month 48 months

Payment received: 

$349

Account type: 

Automobile

Last payment made: 

7/5/2013

8/5/13 7/5/13 6/5/13 5/5/13 4/5/13 3/5/13

Balance $14,285 $14,680 $14,988 $15,294 $15,598 $15,901

Scheduled 

Payment

$395 $395 $395 $395 $395 $395

Amount Paid $0 $395 $395 $395 $395 $395

Past Due $395 $0 $0 $0 $0 $0

Rating 30 OK OK OK OK OK
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 227

Bank of Wisconsin (B42394), Account# 543298760192XXXX50

Balance:

$3,603

Pay status:

Paid or paying as agreed

Date updated:

8/30/2013

Account type:

Revolving; Credit Card

High balance:

$9,869 12/09

Responsibility: 

Individual

Credit limit:

$10,000

Past due:

$0

Date opened: 

6/1/2008

8/2013 7/2013 6/2013 5/2013 4/2013 3/2013 2/2013 1/2013 12/2012

Balance $3,683 $3,764 $3,848 $3,933 $4,020 $4,109 $4,200 $4,293 $4,388

Scheduled

Payment

$147 $151 $154 $157 $161 $164 $168 $172 $176

Amount 

Paid

$147 $151 $154 $157 $161 $164 $168 $172 $176

Past Due $0 $0 $0 $0 $0 $0 $0 $0 $0

Rating OK OK OK OK OK OK OK OK OK

Continued...

 

50 This example is fictional. The credit card payment schedule is based on a credit card with a 22% APR. In this example, the individual is paying down a high 

balance of $9,869, paying the minimum payment each month calculated at 4% of the balance. He is not using the card to make additional purchases. While 

credit card companies use a variety of methods to determine finance charges, a simple interest calculation was used for the purposes of this example. 

Amounts were rounded to the nearest dollar. According to the credit card payment calculator on Bankrate.com, making the minimum payment of 4%, it will 

take the consumer 15 years and 3 months to pay off this credit card debt. He will also pay $8,165 in interest assuming no late fees.
228 MODULE 7: UNDERSTANDING CREDIT REPORTS AND SCORES

11/2012 10/2102 9/2012 8/2012 7/2012 6/2012 5/2012 4/2012 3/2012

Balance $4,485 $4,585 $4,686 $4,790 $4,896 $5,005 $5,115 $5,227 $5,345

Scheduled

Payment

$179 $183 $187 $192 $196 $200 $205 $209 $214

Amount 

Paid

$179 $183 $187 $192 $196 $200 $205 $209 $214

Past Due $0 $0 $0 $0 $0 $0 $0 $0 $0

Rating OK OK OK OK OK OK OK OK OK
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 229

Inquiries made to your account

This section includes a record of any time a company requests information from a 

credit reporting agency about you.

Inquiries that display to others

The following companies have received your credit report.

Auto Loan Store

90 President Lane, Big City, WI 43529

Requested on: 

6/2013

Super Store

100 First Street, Anytown, IA 78691

Requested on: 

12/2012

Promotional inquiries

The following companies received your name, address and other limited information about you so 

they could make a firm offer of credit or insurance. They did not receive your full credit report. These 

are not displayed to others and do not affect your credit scores.

Dress for Success Fashion House

31 Fashion Lane, Big City, WI 43530

Requested on:

7/2012

EZ Loan Store

220 4th Avenue, Littletown, MI 09876

Requested on:

4/2013

Account review inquiries

The companies listed below obtained information from your consumer report for the purpose of an 

account review of business transaction. These are not displayed to others and do not affect your 

credit scores.

Bank of Wisconsin

457 State Street, Big City, WI 43532

Requested on: 

3/2013

Terms used on credit reports can be confusing. Here are the definitions of some key terms used 

on credit reports:

Term Explanation

Authorized user

A person permitted to use a credit card account, but who is not responsible for 

the account. The payment status of the account (positive or negative) is usually

shown on the credit report of both the authorized user and the account’s 

owner.
230 MODULE 7: UNDERSTANDING CREDIT REPORTS AND SCORES

Payment status The history of the account including on-time payments as well as delinquencies 

and other negative items.

Delinquent An account that has not been paid on time and is late. Generally delinquencies 

are expressed as being 30, 60, 90, or 120 days or more delinquent.

Default

Default means that the consumer is not meeting the requirements agreed to 

when they took out the loan. An account that has been delinquent (late) for 

several 30 day billing cycles is generally considered to be in default.

Charge off

A debt is charged off when it is so delinquent that the lender can no longer 

consider it as something that it is likely to be able to collect. This doesn’t mean 

that the debt itself is erased – the consumer still legally owes the debt and it 

can be collected. In many cases the right to collect the debt is taken over by a 

collection agency.

Closed date

The date an account is closed. An account can be closed by the business or 

the consumer. If there is still a balance when the account is closed, the 

consumer is still responsible for paying this.

Discharge When the court releases a consumer of responsibility for a debt as part of the 

bankruptcy process.

Chapter 7 

bankruptcy

A legal process in which the consumer’s assets are used to pay off creditors. 

Any eligible debts not paid through the assets are discharged. This will be in 

the public records section of the credit report.

Chapter 13 

bankruptcy

A legal process in which a consumer enters into a payment plan to pay off 

creditors using future income. These are arranged by the courts. Once the 

payment plan is complete, remaining eligible debts are discharged. This will be 

in the public records section of the credit report.

Dispute

A right consumers have to challenge and require investigation of information 

they believe is incorrect on their credit reports. Consumers must initiate the 

dispute process.

End user The business or individual that receives a credit report.

Information 

provider or 

furnisher

A business or individual that reports information to a credit reporting agency.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 231

Disputing errors on credit reports

If you find something wrong on your credit report, you should dispute it. You may contact both 

the credit reporting agency (most often TransUnion, Equifax, or Experian) and the company 

that provided the incorrect information (the information furnisher).

You will need to explain what you think is wrong and why. If you have evidence (a receipt for 

payment, copy of a cancelled check, etc.) you can include a copy of this and a copy of your credit 

report with the incorrect information highlighted. 

If you submit your dispute in writing rather than online, never send original documents—only 

send copies. You may want to send this information with your letter using certified mail return 

receipt requested. This will give you notification of when the credit reporting agency and 

information furnisher receive your dispute letter. Tool 2: Credit report review checklist includes 

an example of a dispute letter.

The credit reporting agency generally has 30 - 45 days to respond to your request from the time 

it receives it.

You can also submit a complaint to the Consumer Financial Protection Bureau. 

What are credit scores?

Credit scores sum up key pieces of your credit history in a number at a moment in time—like a 

photograph. Companies that make credit scores each use their own complicated mathematical 

formulas to do this. The information used in this formula comes from your credit reports – such 

as information on the number and type of loans and other forms of credit you have used and are 

currently using, whether you’re making your payments on time, and whether you’re 30 days or 

more late (delinquent) on any of these accounts. The formulas are created by looking at how 

other people whose credit file looks like yours have paid their bills over time.

Credit scores provide a standardized way for businesses that offer credit to understand the risk 

that you may have difficulty paying back a loan. The current common credit scoring formulas 

are designed to predict whether someone is likely to fall behind on loan payments for 90 days or 

more. For these scores, the higher the number, the less risky you are predicted to be. 
232 MODULE 7: UNDERSTANDING CREDIT REPORTS AND SCORES

These scores can make it easier for businesses to make decisions about whether to offer you 

credit and how much interest they will charge. Without scores, they would have to take more 

time to read and interpret both your credit application and your credit report. 

There are multiple companies that calculate and sell credit scores. Credit scores vary because 

different score companies use the information stored by the three large credit bureaus in 

different ways. Scores produced by different companies may also vary because they don’t always 

share the same score range. Sometimes the three large credit bureaus store slightly different 

information used to calculate the score, which can also contribute to differences. 

As a result, you have more than one credit score. Each company generates its own scores, and 

they may differ from each other, sometimes significantly. And, each company that creates credit 

scores generates different scores for different kinds of users—they may sell educational scores to 

consumers, but provide different scores to lenders. This can make deciding which credit score to

purchase, if any, confusing for consumers.

How are scores calculated?

FICO scores (calculated using formulas made by Fair Isaac Corporation) are the most commonly 

used scores. These scores range from 300 to 850. A FICO score above 700 is considered good by 

most businesses, and the scores considered the best are 750 and higher. 

The actual way that FICO scores (and other scores) are calculated is considered a trade secret. 

But FICO makes some information available to the public on what goes into its scores.51

 

51 Pie chart values are from FICO. See http://www.myfico.com.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 233

FIGURE 2: WHAT GOES INTO FICO SCORES?52

Payment history tracks whether you are paying your bills on time and as agreed. This is the 

biggest factor in your FICO Scores. Paying bills late, not paying bills at all, and having bills that 

go to collections will cause your scores to drop. The impact on a score from a single late or 

missed payment decreases over time. Paying your bills on time can help increase your score, and 

debts that go to collections and to judgment will cause it to fall.

Amounts owed include the amount you are paying down on loan balances as agreed. It also 

includes your credit utilization rate. Your credit utilization rate is how much of your available 

credit you are using. As your revolving balance relative to the credit limit increases, your score 

will drop.

Length of credit history is the next factor that impacts your scores. Your score increases the 

longer you have a credit history. The more established credit accounts you have, the “thicker” 

your credit file will be. This is a credit record with strong evidence of how you use credit and 

your payment behavior. If you have just one or only a few credit accounts, you will have a “thin 

file.” 

 

52 “Amounts owed” relates to the percentage of a revolving credit limit that is being used and the percentage of an 

installment loan that remains to be paid off.

35% 

30% 

15% 

10% 

10% 

Payment history 

Amounts owed 

Length of credit history 

New credit 

Types of credit used 
234 MODULE 7: UNDERSTANDING CREDIT REPORTS AND SCORES

New credit is tracked by measuring your inquiries for credit. If you have too many inquiries, 

the model interprets this to mean you have a high demand for credit, which may be an indicator 

of risk, and your scores may drop. When you are shopping for credit, however, you can compare 

offers for a home, car, or student loan. FICO and most other models give you a short window of 

time – generally 30 days – when multiple inquiries for the same type of product will be 

considered as only one inquiry. And your score is not affected at all when companies “prescreen” you for credit or when you check your credit report yourself (such as at 

annualcreditreport.com).

Finally, types of credit used are considered. Your FICO scores increase if you have both credit 

cards (revolving credit) and loans (installment credit such as a mortgage or car loan) in good 

standing. Generally, it is considered a positive to have a mortgage, an auto loan, and not too 

many credit cards.

Scores provided by VantageScore, another score provider, range from 300 to 850. Scores 

calculated with its earlier models ranged from 501 to 990.53 Like the FICO Scores, the actual 

method used to calculate VantageScore credit scores is secret. But VantageScore provides 

information to the public like the graphic below, which explains how your credit history, credit 

usage, and other actions can influence the scores it calculates.

 

53 See http://your.vantagescore.com/score-influences.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 235

FIGURE 3: WHAT GOES INTO VANTAGESCORES?54

 

54 “Recent behavior” refers to recent credit behavior and inquiries. “Age of credit” refers to the length of time accounts 

have been open.
236 MODULE 7: UNDERSTANDING CREDIT REPORTS AND SCORES

Credit utilization rate

If you want to maintain your credit score, many experts advise keeping your use of 

revolving credit low in relation to your credit limit.

That’s because credit scoring formulas penalize you for using too much of the credit you 

have available to you. This means your credit score may drop if you use more than a 

certain percentage of the revolving credit you have available to you. 

For example, you may have a high percentage of your credit limit charged on a card, and 

you want to qualify for better rates on new credit. In this case, you may want to lower the 

amount you are revolving from month to month by paying down your credit card before 

you apply for new credit.

The easiest way to understand credit utilization is through an example:

If someone had a credit card with a $5,000 credit limit, and she has charged $3,500 

on this card, her credit utilization rate is calculated as follows:

$3,500 (amount charged to credit card) divided by $5,000 (credit limit) = .7 or 70%

If she sets a goal of lowering her revolving utilization of this card to 25% or less, her 

revolving balance should be no more than:

$5,000 (the credit limit) multiplied by .25 (25%) = $1,250

Does this mean that only the unpaid balance is counted toward the credit utilization rate? 

The answer is no. If at any time during the month your total charges are higher than the 

limit the credit scoring model is based on, you run the risk of lowering your credit score.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 237

Tool 1:

Getting your credit reports 

and scores

Getting your reports

Getting your credit report is the first step to improving your credit. It is important to think about 

credit, because a good credit history can help you: 

§ Get and keep a job

§ Get and keep a security clearance for a job, including a military position

§ Get an apartment

§ Get insurance coverage

§ Get lower deposits on utilities and better terms on cell phone purchase plans 

§ Get a credit card

§ Get loan from a bank or credit union including a loan for a house (a mortgage)

§ Get a better credit score—all of the information used to calculate your score comes from 

credit reports

If any of these things are important to you, improving your credit report can help you get them.

Start with your free annual report

You can get a free copy of your report from each of three agencies every 12 months.

Some states and territories allow for an additional free report each year: Colorado, Georgia, 

Maine, Maryland, Massachusetts, New Jersey, Vermont and Puerto Rico.
238 MODULE 7: UNDERSTANDING CREDIT REPORTS AND SCORES

 TOOL 1: GETTING YOUR CREDIT REPORTS AND SCORES

To order through the website, visit https://www.annualcreditreport.com. You will complete a 

form with basic information (your name, Social Security number, address, etc.). You will select 

the report(s) you want—Equifax, Experian, and/or TransUnion.

Then for each report, you will be asked a series of security questions such as: former addresses, 

amount of a loan you have, phone numbers that have belonged to you, counties you may have 

lived in, etc. If you are unable to answer these questions, you will have to use another method.

You will save a PDF version of your report, print the report, or both. 

Be sure you do this in a safe and secure location. Avoid doing this on public computers such as 

those at a library.

Alternative methods

Order by phone: (877) 322-8228. You will go through a verification process over the phone. 

Order by mail: Download the request form from https://www.annualcreditreport.com. 

Print and complete the form. Mail the completed form to:

Annual Credit Report Request Service

P.O. Box 105281

Atlanta, GA 30348-5281

Track when you have printed or received your credit reports

Source of credit 

report

Equifax

PO Box 740241

Atlanta, GA 30374

www.equifax.com

Experian

www.experian.com

TransUnion LLC

PO Box 1000

Chester, PA 19022

www.transunion.com

Date report printed or 

received

Beware of imposter websites offering free credit reports. Some companies offer free credit 

reports, but you may have to buy another product or service to get it. 

8
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 239

DO NOT use a search engine (Google or Yahoo, for example) to find the annual credit report 

site. Go directly to: https://www.annualcreditreport.com or go through 

http://www.consumerfinance.gov.

You can get an additional free report if you:

§ Are unemployed and plan to look for employment in the next 60 days

§ Are receiving public assistance

§ Have been the victim of fraud including identity theft

§ Have had adverse action taken (you have been denied credit, employment, insurance, 

etc.) because of information in your credit report. In this case, you have 60 days to 

request your report

If you are under 18, you should not have a credit report unless:

§ You are an authorized user or joint owner on an account

§ You are an emancipated minor

§ Your state law allows you to enter contracts at 17, and your have done so

§ You have student loans

§ You have been the victim of identity theft and credit or financial fraud

Currently, only Experian allows minors (once they reach the age of 14) to obtain their own credit 

reports. Call (888) 397-3742 to get your file.

With TransUnion, you can send an email to childidtheft@transunion.com to see if a credit file 

exists. Or you can visit the TransUnion website and complete the Child Identity Theft Inquiry 

Form. If the minor has a legitimate credit history (he or she is the joint owner of or an 

authorized user on an account), then a parent or guardian must order the report.

For the Equifax report, call (877) 784-2528. Currently, an adult—the parent or legal guardian—

must order the credit report on behalf of the minor. 
240 MODULE 7: UNDERSTANDING CREDIT REPORTS AND SCORES

 TOOL 1: GETTING YOUR CREDIT REPORTS AND SCORES

Getting your credit scores

Unlike your credit report, which you can get at no cost to you, you usually have to pay for your 

credit score. There are certain instances in which you are entitled to your credit score for free, 

for example if you are denied a loan on the basis of your credit score. 

There are many credit scores you can purchase in the marketplace. The type of credit score most 

used by lenders is a FICO score. Another score also used by lenders is the Vantage Score, which 

you can purchase through TransUnion. 

Credit scores offered online are approximations of your scores. They are not the actual scores 

businesses will use to make decisions about you. However, some people find they can be useful 

for education. You can generally see if your credit scores are moving up or down. But the actual 

number may not reflect your actual FICO Scores. So this may be confusing.

You cannot know ahead of time whether the scores you purchase will vary moderately or 

significantly from a score sold to creditors. You should not rely on credit scores you purchase 

exclusively as a guide to how creditors will view your credit quality. Knowing what is in your 

credit report and fixing errors is more important to building your credit than 

buying a credit score that may not tell you what you need to know before you apply 

for a loan.

Tracking when you ordered scores

To order your FICO score 

visit

http://www.myfico.com

Each credit score will cost. 

This company also offers 

other credit reporting and 

monitoring services for a 

fee. 

Equifax score: Date:

Experian score: Date:

TransUnion score: Date:

You have the right to get a free credit scores if:

§ You apply for a mortgage loan and the lender uses your credit score. The lender must 

send you a notice telling you this and include your score.

8
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 241

§ Your application for credit is turned down and the lender used your credit score. You will 

get a notice (disclosure) from the provider explaining this with your credit score.

§ You get less favorable terms from a lender than the terms available to most people who 

get credit from that lender, and the lender used your credit score. You will get a notice 

(disclosure) from the provider explaining this with your credit score.

§ This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource 

for the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance 

or advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the 

advice or actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational 

efforts are limited to the materials that CFPB has prepared. 

§ This Tool may ask you to provide sensitive personal and financial information. The CFPB does not collect any information from

you or the organization using this Tool. The CFPB is not responsible and has no control over how others may use the 

information that you provide to them about your personal or financial situation. The CFPB recommends that you do not 

include names or account numbers and that users follow their organization’s policies regarding retention, storage, and disposal 

of documents that contain personal information.
242 MODULE 7: UNDERSTANDING CREDIT REPORTS AND SCORES

 TOOL 1: GETTING YOUR CREDIT REPORTS AND SCORES
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 243

Tool 2:

Credit report review checklist

Once you get your credit report, you will want to review it carefully. Ordering it is not enough—

you have to read it. Credit reports may have mistakes. And if there are mistakes, you are the only 

one who is likely to find them.

Use the following worksheet to review each section of your credit report. Do this for each credit 

report you get throughout the year. Then, keep the completed checklist with your credit report. 

Your credit report contains a lot of personal and financial information. Be sure to keep any hard 

copies of your credit reports in a safe and secure place. If you do not want to hang on to your 

credit reports, be sure to shred them before getting rid of them.

Credit report review checklist

Today’s date: __________ Name of credit reporting agency ____________

Check for 

“yes”

Checklist item

Is your name correct?

Is your Social Security number correct?

Is your current address correct? Is your current phone number correct?

Are the previous addresses they have listed for you correct?

Is your marital status listed correctly?

Is the employment history they have listed for you accurate?

Is everything listed in the personal information section correct?

Is there anything listed in the public record information? Is it correct? Highlight the 

information you think may not be correct.

8
244 MODULE 7: UNDERSTANDING CREDIT REPORTS AND SCORES

 TOOL 2: CREDIT REPORT REVIEW CHECKLIST

Review each item under the credit account (trade account) section. Are the accounts on 

the list still open? 

Are all of the current balances correct?

Are accounts where you are an authorized user or joint owner listed?

Are zero balances recorded for debts discharged in bankruptcy? For debts paid in full?

Are you listed as a co-signer on a loan? Is this correct?

Are accounts that you closed listed as “closed by the consumer”?

Is negative information reported on each credit account correct? Look for late payments 

and missed payments. Highlight those items you think are not correct.

Are any accounts listed more than once? Check to make sure the same account is not 

listed multiple times in the collections section.

Is old negative information still being reported? If yes, highlight the information that has 

exceeded the negative information reporting limit, which is usually seven years.

Do you suspect that you have been the victim of identity theft after reviewing your credit 

reports?

If you find something wrong with your credit report, you should dispute it. You may contact 

both the credit reporting company and the creditor or institution that provided the information. 

Explain what you think is wrong and why.

To correct mistakes, it can help to contact both the credit reporting company and 

the source of the mistake. You may file a dispute not only with the credit reporting 

company, but also directly with the source of the information, and include the same supporting 

documentation. However, there are certain circumstances where creditors and furnishing 

institutions are not required to investigate. 

You may file your dispute online at each credit reporting agency’s website. 

If you file a dispute by mail, your dispute letter should include: Your complete name, address, 

and telephone number; your report confirmation number (if you have one); and the account 

number for any account you may be disputing. 
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 245

In your letter, clearly identify each mistake, state the facts, explain why you are disputing the 

information, and request that it be removed or corrected. You may want to enclose a copy of the 

portion of your report that contains the disputed items and circle or highlight the disputed 

items. Include copies (not originals) of documents that support your position.

Send your letter of dispute to credit reporting companies by certified mail, return receipt

requested, so that you will have a record that your letter was received. You can contact the 

nationwide credit reporting companies online, by mail, or by phone:

You can contact the primary nationwide credit reporting agencies online, by mail, or by phone:

Equifax 

Online: http://www.ai.equifax.com/CreditInvestigation

By mail: Download and complete the dispute form: 

http://www.equifax.com/cp/MailInDislcosureRequest.pdf

Mail the dispute form with your letter to:

Equifax Information Services LLC

P.O. Box 740256

Atlanta, GA 30374

By phone: Phone number provided on credit report or (800) 864-2978

Experian 

Online: http://www.experian.com/disputes/main.html

By mail: Use the address provided on your credit report or mail your letter to:

Experian

P.O. Box 4000

Allen, TX 75013

By phone: Phone number provided on credit report or (888) 397-3742

TransUnion 

Online: http://www.transunion.com/personal-credit/credit-disputes-alerts-freezes.page

By mail: Download and complete the dispute form: 

http://www.transunion.com/docs/rev/personal/InvestigationRequest.pdf

Mail the dispute form with your letter to:

TransUnion Consumer Solutions

P.O. Box 2000,
246 MODULE 7: UNDERSTANDING CREDIT REPORTS AND SCORES

 TOOL 2: CREDIT REPORT REVIEW CHECKLIST

Chester, PA 19022-2000

By phone: (800) 916-8800

Keep copies of your dispute letter and enclosures.

If you suspect that the error on your report is a result of identity theft, visit the Federal Trade 

Commission’s Fighting Back Against Identity Theft website for information about 

identity theft and steps to take if you have been victimized. This will include filing a fraud alert 

and possibly filing a security freeze.

If the error is with a specific account, you can also choose to start the process by contacting the 

creditor or the debt collector to resolve the dispute.

Whether you file your dispute directly with the creditor (information furnisher) or the credit 

reporting agency, they generally have 30 - 45 days to investigate your claim and 5 days to send 

you written notice once their investigation is over.

If the dispute results in a business changing the information it reported about you, the business 

must notify the credit reporting agencies. And vice versa, if you filed your dispute with a credit 

reporting agency, it must fix your file and notify the creditor of the error.

You can also submit a complaint to the Consumer Financial Protection Bureau at 

https://www.consumerfinance.gov/complaint or by calling 877-411-2372.

Steps to filing a dispute checklist

Check for 

“yes”

Steps to filing a dispute

Write a letter to the credit bureau that sent you the report.

Provide the account number for the item you feel is not accurate.

For each item, explain concisely why you believe it is not accurate.

If you can, include copies of bills or cleared checks (money order stubs) that show you 

have paid them on time.

Provide your address and telephone number at the end of the letter so the credit 

bureau can contact you for more information if necessary.

8
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 247

Make a copy of your letter before you send it to the credit bureau.

Send the letter. You may choose to use Certified Mail with Return Receipt to have 

proof of when the letter was received. The consumer reporting agency or the creditor 

generally has 30-45 days to investigate your claim.

You can use this example dispute letter from the Federal Trade Commission to a credit reporting 

agency as a guide for writing your own letter.
248 MODULE 7: UNDERSTANDING CREDIT REPORTS AND SCORES

 TOOL 2: CREDIT REPORT REVIEW CHECKLIST

Example letter

Be sure to keep copies of everything you send to the credit reporting agencies, 

including the dates you sent the items.

[Your name]

[Your return address]

[Date]

Complaint Department

[Company Name]

[Street Address]

[City, State, Zip Code]

Dear Sir or Madam:

I am writing to dispute the following information in my file. I have circled the items I 

dispute on the attached copy of the report I received.

This item [identify item(s) disputed by name of source, such as creditors or tax court, 

and identify type of item, such as credit account, judgment, etc.] is [inaccurate or 

incomplete] because [describe what is inaccurate or incomplete and why]. I am 

requesting that the item be removed [or request another specific change] to correct the 

information.

Enclosed are copies of [use this sentence if applicable and describe any enclosed 

documentation, such as payment records and court documents] supporting my 

position. Please reinvestigate this [these] matter[s] and [delete or correct] the disputed 

item[s] as soon as possible.

Sincerely,

[Your name]

[Phone number]

Enclosures: [List what you are enclosing.]
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 249

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 

This Tool may ask you to provide sensitive personal and financial information. The CFPB does not collect any information from you 

or the organization using this Tool. The CFPB is not responsible and has no control over how others may use the information that 

you provide to them about your personal or financial situation. The CFPB recommends that you do not include names or account 

numbers and that users follow their organization’s policies regarding retention, storage, and disposal of documents that contain 

personal information.
250 MODULE 7: UNDERSTANDING CREDIT REPORTS AND SCORES

 TOOL 2: CREDIT REPORT REVIEW CHECKLIST
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 251

Tool 3:

Improving credit reports and 

scores

Your credit report shows information about how you have used credit, such as how much credit 

you have, how much of your available credit you are using, whether you have made your 

payments on time, and whether anyone has sent a loan you owe to a debt collector.

A credit score is a number that is used to predict how likely you are to pay back a loan. Your 

credit score starts with the information about you from your credit report. A mathematical 

prediction formula is applied to this information about you from your credit report. That 

prediction formula, which is called a scoring model, creates a number, and this number is your 

credit score.

To get and keep a good credit score:

§ Pay all your loans and bills on time.

§ Make sure information in your credit report is correct.

§ Don’t use too much of the credit that is available to you.

If you want to qualify for credit, focus on improving your reports and scores now. Use this 

worksheet to ensure you are focusing on the areas that matter most.

You may want to talk with a specialized credit or housing counselor to build your plan to 

improve your credit report and scores. See the Resources list at the end of this tool for links to 

get you started in finding an accredited counselor.
252 MODULE 7: UNDERSTANDING CREDIT REPORTS AND SCORES

 TOOL 3: IMPROVING CREDIT REPORTS AND SCORES

Strategies for improving credit reports and scores list

Check if 

you plan 

to 

implement

Strategy for improving credit reports and scores Other 

information or 

resources you 

need

Obtaining free credit reports annually

Online at https://www.annualcreditreport.com

By phone: Call (877) 322-8228

By mail: Go to https://www.annualcreditreport.com to print the 

form

(Use Tool 1: Getting your credit reports and scores)

Reviewing the credit reports for accuracy

(Use Tool 3: Credit report review checklist)

Disputing errors found on the reports

(Use Tool 3: Credit report review checklist)

Understanding Credit Scores 

(Use Tool 2: Getting your credit reports and scores)

Paying bills on-time is the most effective way to improve your 

credit reports and credit scores.

Keeping the amount of credit available that you use low. (While 

there is not an “official” published limit, many financial experts 

recommend keeping the amount of credit used between 25% 

and 30%55 of the credit available.)

 

55 For two examples, see http://www.chicagotribune.com/classified/realestate/sns-201204201830--tms--realestmctniga20120428apr28,0,222450.column and http://www.experian.com/blogs/news/2012/09/24/rebuild-your-credit.

8
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 253

Keeping unused credit accounts open—credit card company 

may close account because of inactivity. (They are not allowed 

to charge fees if this occurs.)

However, if your goal is paying down debt and you may be 

tempted to use the card, keeping the account open may not help 

you reach your goal. 

• If you close some credit card accounts and put most or all of 

your credit card balances onto one card, it may hurt your credit 

score if this means that you are using a high percentage of your 

credit limit on that account.

Developing a plan to take care of outstanding judgments or 

liens. You may be able to negotiate with a collector (See Module 

6).

Diversifying credit sources

If you have medical debt, you may be eligible for assistance with 

your bills or may be able to get on a payment plan.

Paying down old debt or debt in collections. This will improve 

your credit history – your report – but may not impact your credit 

score. Before you make a payment on debt that you have not 

paid for a long time, such as three or more years, you may wish 

consult with a credit specialist or attorney regarding the statute 

of limitations on the debt. If the statute of limitations period has 

passed, making a payment may re-start the clock on creditors’ 

ability to file a lawsuit to collect the debt, depending on the debt 

and state law.

Using credit building products:

Secured credit cards. This can be a way to build a positive credit 

history. But because credit limits tend to be low with these cards, 

be sure to watch your credit utilization rate and not get too close 

to using the full limit.

Credit building loans. Visit a bank or credit union to find out 

about these products. With some credit builder loans, you make 

monthly payments first, and receive the loan amount when it is 

paid off. This helps you avoid taking on debt while you build a 

positive payment record. These loans can be very effective in 

creating new history and will have a positive impact on your 

reports and scores.
254 MODULE 7: UNDERSTANDING CREDIT REPORTS AND SCORES

 TOOL 3: IMPROVING CREDIT REPORTS AND SCORES

Other:

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 

This Tool may ask you to provide sensitive personal and financial information. The CFPB does not collect any information from you 

or the organization using this Tool. The CFPB is not responsible and has no control over how others may use the information that 

you provide to them about your personal or financial situation. The CFPB recommends that you do not include names or account 

numbers and that users follow their organization’s policies regarding retention, storage, and disposal of documents that contain 

personal information.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 255

Resources

If you would like help managing your debt or rebuilding credit, visit the National 

Foundation for Credit Counseling: 

http://www.nfcc.org

Certified housing counselors can provide advice on buying a home, renting, defaults, 

foreclosures, and credit issues: 

www.consumerfinance.gov/find-a-housing-counselor

FDIC.gov, Credit Repair: 

http://www.fdic.gov/consumers/consumer/ccc/repair.html

Consumer.gov, Building a Better Credit Report: 

http://www.consumer.ftc.gov/articles/pdf-0032-building-a-better-credit-report.pdf

For additional resources, visit the Consumer Financial Protection Bureau website:

http://www.consumerfinance.gov/AskCFPB

If you have a consumer complaint, visit: 

http://www.consumerfinance.gov/complaint

The CFPB has prepared this material as a resource for the public. This material is provided for educational and information 

purposes only. It is not a replacement for the guidance or advice of an accountant, certified financial advisor, or otherwise qualified 

professional. The CFPB is not responsible for the advice or actions of the individuals or entities from which you received the CFPB 

educational materials. The CFPB’s educational efforts are limited to the materials that CFPB has prepared. 

v
256 MODULE 7: UNDERSTANDING CREDIT REPORTS AND SCORES

 TOOL 3: IMPROVING CREDIT REPORTS AND SCORES
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 257

MODULE 8:

Money services, cards, 

accounts, and loans: Finding 

what works for you

Finding and choosing financial products and 

services

Financial products and services are the tools that you use to store money, make payments and 

purchases, send money to someone, and pay for things over time – like checking and savings 

accounts; prepaid, debit, payroll and EBT cards; credit cards; money transfers and bill payment 

services; and loans.

§ Banks and credit unions may come to mind when you think about places to get financial 

products and services. But there are many other places that offer them. Here are a few:

§ Department stores—credit cards or charge cards

§ Automobile dealers—car loans

§ Retail superstores, convenience stores, grocery stores, and other stores—check cashing, 

bill payment, money orders, prepaid cards, and money transfers

§ Check cashers and payday lenders – check cashing, money transfers, bill payment, 

money orders, prepaid cards, and short-term loans

§ Online companies—money transfers, bill payment services, loans, financial management 

tools, online “wallets” or “accounts”

§ Mortgage companies—loans for homes
258 MODULE 8: MONEY SERVICES, CARDS, ACCOUNTS, AND LOANS: FINDING WHAT WORKS FOR YOU

§ Commercial tax preparers—refund anticipation loans

§ Consumer finance companies – loans

§ U.S. Postal Service—money orders and money transfers

The federal government issues student loans, offers savings bonds, and provides the Direct 

Express® card to recipients of federal benefits if they do not have a bank account. 

Sometimes, even an employer may act as a financial service provider by giving you a loan.

One important key to finding the right financial service provider is figuring out the reason you 

need one. You may want a safe and secure place to put the money you are saving for your goals, 

unexpected expenses, or emergencies. You may want a convenient way to pay your bills. You 

may be looking for a loan to buy a car. Or you may want to repair or build your credit history to 

improve your credit scores.

In other words, you may want to first identify your needs, then the product or services that will 

satisfy those needs.

Financial products and services are the tools you can choose from to do all of these things and 

more. But selecting a financial service provider can be hard, because there are so many choices. 

Use Tool 1: Know your options: Understanding what you need to help you figure out the 

primary reason you need financial products or services. 

Then use Tool 2: Ask questions: Choosing where to get what you need to ensure you get the 

right questions answered before using a financial service provider. If you are not clear about the 

different kinds of financial service providers or the products and services they offer, use 

Tool 3: Money services and banking basics to learn more about them. 

If you feel you want to use a bank or credit union account, use Tool 4: Opening an account 

checklist.

Managing a bank or credit union account

If you decide to open a bank account, it’s your responsibility to take care of it. This starts with 

learning the rules of your new account from your bank or credit union. If you don’t follow the 

rules of your account, the bank or credit union may charge you fees. 
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 259

No one likes to see fees reducing their checking account balance every month. You may not be 

able to eliminate all the fees charged by your bank or credit union, but here are six steps to 

reduce the number or amount of fees you pay:

1. Keep track of your balance to avoid spending more than you have available or going 

below your minimum balance requirement.

For example:

o Check your balance at the ATM before you withdraw cash.

o Ask if your bank or credit union offers low-balance warnings via e-mail or text.

o Ask your bank or credit union when the money you deposit will be available for your 

use. 

o Ask your bank how it processes debits to your account (debits are when money is 

taken out of your account).

o Know that your charges and withdrawals are not always processed in the order in 

which you make them.

o Monitor your account online, with text alerts, or with a mobile app.

2. Find out if fees can be waived. Many financial institutions waive monthly service 

fees if you maintain a minimum balance or sign up for direct deposit. Compare fees.

3. Watch out for overdraft fees. Overdrafts occur when you spend or withdraw more 

money than is available in your checking account. Many banks and credit unions will 

charge you several overdraft fees per day with each one costing you between $30 and 

$35.

4. Use your financial institution’s ATMs. When you use ATMs in your bank’s 

network, there is generally no charge. Many banks or credit unions offer ATM locator 

maps on their websites and mobile apps. 

5. See if there’s a low-fee checking account for you, such as a senior or student 

account, or just a basic checking account with a low minimum balance requirement and 

a limited number of “free” checks and withdrawals.
260 MODULE 8: MONEY SERVICES, CARDS, ACCOUNTS, AND LOANS: FINDING WHAT WORKS FOR YOU

6. Open and review all of the mail from your bank or credit union. Review account 

statements every month to make sure they are correct and report errors immediately. 

You must also be notified when your minimum balance requirement, fees, or other 

account terms change.

Finally, it is important to never knowingly write a check for funds you do not have in your 

account. This can create a number of problems for you. In addition to being charged fees for 

nonsufficient funds from the bank or credit union and the merchant (if the check was written to 

a merchant), it could severely impact your ability to access financial services in the future, and 

even subject you to criminal prosecution.

Overdraft Coverage Programs

An overdraft occurs when you spend or withdraw more money than is available in your checking 

account. Banks or credit unions can advance you money to cover the shortfall and charge you a 

fee. This is sometimes called overdraft coverage or overdraft protection.

At its surface, overdraft programs seem like they might be a good deal—they prevent people 

from being charged bounced or returned check fees by the merchant and the financial

institution. But in reality, this protection can be expensive. The bank or credit union can charge 

you daily when you overdraw your account. Finally, you must pay the bank or credit union back 

for both the amount covered by the financial institution and the fees. 

You can’t be charged a fee for an overdraft with your debit card unless you “opt in” to overdraft 

coverage and fees. This means you have to actively choose to have it. If you have opted in 

previously, you can opt out now.

Even if you don’t opt in, however, you can still be charged an overdraft fee if a recurring 

payment you have set up with your debit card number or via a direct billing arrangement 

overdraws your account. If you want to have a checking account and don’t want to pay overdraft 

fees, use one of these approaches:

§ Keep track of your balances. Remember, not all deposits are available for use 

immediately.

§ Sign up for low balance alerts at your bank or credit union.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 261

§ Know when regular electronic transfers, such as a rent payment or utility bills, will be 

paid.

§ Link your checking account to your savings account, credit card, or line of credit. If 

you run out of money in your checking account, the bank will pull money from the 

place you’ve chosen. The fee for this is usually much lower than an overdraft fee.

Garnishment from your bank or credit union 

account 

§ A creditor to whom you owe money can seek to be paid directly from your bank or credit 

union account by garnishing the account. Whether a creditor can garnish money from 

your bank account depends on where the funds in your bank account came from.

Generally, money in your bank account that is from your wages or from another person can be 

garnished. But certain money in your bank account cannot be garnished by private creditors.

This includes money from:

§ Social Security Payments

§ Supplemental Security Income

§ Veteran’s Benefits

§ Railroad Retirement Board Benefits

§ Federal Employee and Civil Service Retirement Benefits

§ Other income may also be protected from garnishment by private creditors. Examples 

include state public assistance, federal student assistance, payments from a disability 

insurance policy, and income from a retirement plan. In some states, state 

unemployment compensation may also be exempt. 

Proving that money in your bank account comes from a protected source can be difficult and 

complicated. For this reason, federal law requires banks to have special procedures to ensure 

that the bank or credit union where you have your account can identify the federal benefits that 

are exempt. If you believe that your federal benefits or other money in your account have been 
262 MODULE 8: MONEY SERVICES, CARDS, ACCOUNTS, AND LOANS: FINDING WHAT WORKS FOR YOU

improperly taken from it, you will need to take steps to protect your rights. You should talk to 

your bank or credit union and consider consulting a lawyer.

§ If the debt you owe is owed to the government (for example for taxes or student loans) or 

is for child support there are different rules. In this case the creditor may be able to 

garnish federal benefits in your bank account. If this happens to you may want to consult 

a lawyer.

Money you owe to the bank or credit union where you have your account

If you owe a debt to your bank or credit union, other than regular account fees, the bank may be 

entitled to take money from your account to pay itself. This will depend on your deposit contract 

with your bank. Generally, your bank or credit union is not allowed to pay itself from money in 

your account that came from federal benefits or another protected source. 
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 263

Tool 1:

Know your options: 

Understanding what you need

Deciding where to get financial products can be hard, because there are so many choices. Before 

you decide which type of provider to use, think about the reasons you need a financial product. 

Checklist of common reasons to find a financial service provider

Pick the top three reasons for you.

Ranking What I want to do or accomplish?

I want a safe and secure place to keep my money. 

I want to be able to make purchases without having to carry cash or go into debt. 

I want a low cost and easy way to pay and manage my bills. 

I want to bank and pay bills online.

I want to have my paycheck directly deposited. 

I want to accumulate savings. 

I want to save for retirement, my children’s education, or other life events. 

I want to buy a car. 

I want to buy a home. 

I want to be able to get small loans quickly and without a hassle. 

I want to build my credit history. 

I want to send money to someone. 

8
264 MODULE 8: MONEY SERVICES, CARDS, ACCOUNTS, AND LOANS: FINDING WHAT WORKS FOR YOU

 TOOL 1: KNOW YOUR OPTIONS: UNDERSTANDING WHAT YOU NEED

Find the three reasons for finding a financial service product and provider you identified above. 

Circle them and read about the providers and products that may be the best fit for your 

priorities.

Reason for a financial 

service provider Financial service provider Products that can meet your need

I want a safe and secure 

place to keep my money. 

Bank or credit union Savings account, checking account, or 

certificate of deposit

Retailer, check cashing 

store or online 

Prepaid debit card (May currently lack 

the same consumer protections as a 

debit card linked to a checking 

account)

TIP: Don’t carry around large amounts of cash or leave cash in your home. It’s not safe and could be 

stolen or lost. Banks and credit unions are safe places to keep your money. To avoid fees, be sure to 

ask if you have to keep a minimum amount in the account and always know how much money you have 

in it. 

I want to be able to make 

purchases without having to 

carry cash or go into debt. 

Bank or credit union Debit card (attached to a savings or 

checking account)

Retailer, check cashing 

store, or online Prepaid debit card

TIP: Read the information you receive about the fees related to using your product. If you are being 

charged fees that you don’t understand, ask questions. If no one can explain the fees to you, it could be 

a red flag!

I want a low cost and easy 

way to pay and manage my 

bills. 

Bank or credit union

Checking account

Bill payment services

Money orders

Retailer, check cashing 

store, or online

Money orders

Bill payment services

Prepaid debit cards (some can be 

used for bill payment)

U.S. Postal Service Money orders

TIP: Make sure to check how you can pay for most of your bills. Some utilities and other companies 
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 265

accept only certain bill payment options. 

I want to bank and pay bills 

online. 

Bank or credit union Checking account and online banking

Internet-based bill paying 

service Online bill paying

Retailer, check cashing 

store, or online

Prepaid debit card with online bill 

payment

I want to have my paycheck 

directly deposited. 

Bank or credit union Savings account or checking account 

Employer Payroll card (prepaid debit card)

Retailer, check cashing 

store, or online Prepaid debit card

I want to accumulate 

savings. 

Bank or credit union Savings account or certificate of 

deposit

TIP: You can open an account for yourself or a joint account with your spouse or another person. If you 

open a joint account with someone, that person will usually have the same rights to the money in the 

account that you do, so only open a joint account with someone you trust with your money. To avoid 

fees, be sure to ask if you have to keep a minimum amount in the account.

I want to buy a car. 

Bank or credit union Car loan

Automobile dealer Dealer financing

I want to buy a home. 

Bank or credit union

Mortgage company

Mortgage

I want to be able to get small

loans quickly and without a 

hassle. 

Credit card company Credit card 

Pawn shop Pawn loan

Some credit unions and 

Banks

Finance company

Deposit advance loans (requires a bank 

account)

Signature loan

Payday loan provider Payday loan (requires a bank account)

TIP: Use the annual percentage rate (APR) to compare how much loans cost. You can compare the 

cost of loan products with different fee structures on an “apples-to-apples” basis. It also takes into 
266 MODULE 8: MONEY SERVICES, CARDS, ACCOUNTS, AND LOANS: FINDING WHAT WORKS FOR YOU

 TOOL 1: KNOW YOUR OPTIONS: UNDERSTANDING WHAT YOU NEED

account the amount of time you have to repay the loan.

I want to build my credit 

history. 

Bank or credit union Credit builder loan

Bank or credit union Loan for an asset (car, home, etc.)

Other lenders 

Credit builder loan

Credit card

Credit card company

Secured credit card

Credit card

TIP: Check your credit reports regularly and make sure the information in your credit reports is correct.

Visit AnnualCreditReport.com to get a free copy of your credit report from the nationwide credit reporting 

companies. You can receive a free credit report once every 12 months. Call 1-877-322-8228 or visit 

www.annualcreditreport.com.

I want to send money to 

someone. 

Retailer, some check 

cashing stores, U.S. 

Postal Service, online 

companies

Money Transfers

Bank or credit union Wire Transfers or other money 

transfers

TIP: New protections apply when you send money abroad. Before you pay, you will learn more about 

the exchange rate, the fees and taxes you’ll pay, and the amount that will be received. You will also 

receive information about when the money will be available at its destination, your right to cancel the 

transfer, how to get help if errors are made, and how to submit a complaint. Other protections also may 

be available to you, depending on how you send the money and the laws in your state.

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 

This Tool may ask you to provide sensitive personal and financial information. The CFPB does not collect any information from you 

or the organization using this Tool. The CFPB is not responsible and has no control over how others may use the information that 

you provide to them about your personal or financial situation. The CFPB recommends that you do not include names or account 

numbers and that users follow their organization’s policies regarding retention, storage, and disposal of documents that contain 

personal information.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 267

Tool 2:

Ask questions: Choosing

where to get what you need

Once you know the reasons you want a financial product or service and the type of place that 

offers it, use this tool to compare businesses that can offer you those services. Using this form, 

you can compare up to three financial service providers at one time. If there are services or 

features that don’t matter to you, just put a line through the entire row.

Financial service provider comparison

Financial 

service 

provider 1:

__________

Financial 

service 

provider 2:

__________

Financial 

service 

provider 3:

__________

Convenience and access

Close to where I work or live?

Open during hours I can visit (at lunch and after 

work, for example)?

Can I pay bills and check balances by phone, 

online, or with a mobile app?

Products and services

Does it offer depository services? (savings, 

checking, CDs)

If I get a checking or savings account, will I get 

an ATM card? Debit card?

Does it offer credit services? (credit cards, 

small dollar loans, mortgages, lines of credit)

8
268 MODULE 8: MONEY SERVICES, CARDS, ACCOUNTS, AND LOANS: FINDING WHAT WORKS FOR YOU

 TOOL 2: ASK QUESTIONS: CHOOSING WHERE TO GET WHAT YOU NEED

Does it offer transactional services?(check 

cashing, money transfers, bill payment)

Does it offer additional services? (Notary 

Public, safe deposit boxes)

Customer service

Do I feel welcome?

Are the products and services described in 

terms I can understand?

Is staff available to answer my questions in 

person or by phone?

Safety and Security

If I am depositing money, is it FDIC or NCUA 

insured?

Is my money protected if someone steals my 

debit card or uses it without my permission?

If I transfer money, will the provider guarantee 

the time it will arrive and give me information 

about the fees, taxes, and the exchange rate 

before I pay for the transfer? 

Fees

Are there transaction fees or other costs, such 

as activity fees or, for international transactions, 

exchange rates? What are they?

Is there a fee for making a deposit?

Is there a fee for going below the minimum 

balance?

Are there monthly account maintenance fees?

Are there fees for using debit cards to make 

retail purchases or inactivity fees?
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 269

Are there fees for using online banking 

services?

What are the fees if you overdraft?

What are the fees associated with getting a 

loan?

What are the fees associated with getting a 

credit card? Are there annual fees?

Interest and statements

Will you earn interest on savings?

What is the rate of interest you will earn (APY)?

What is the interest rate on the loan?

What is the interest rate including all fees on 

the loan (APR)?

How often will you receive account statements?

Other criteria important to me

If I am transferring money, how convenient is it 

for the recipient to receive the funds?

If I am borrowing money, how much will my 

payment be? When is it due? How long will it 

take to repay? What will the total cost be?

Other: 

Other:

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are

limited to the materials that CFPB has prepared. 
270 MODULE 8: MONEY SERVICES, CARDS, ACCOUNTS, AND LOANS: FINDING WHAT WORKS FOR YOU

 TOOL 2: ASK QUESTIONS: CHOOSING WHERE TO GET WHAT YOU NEED

This Tool may ask you to provide sensitive personal and financial information. The CFPB does not collect any information from you 

or the organization using this Tool. The CFPB is not responsible and has no control over how others may use the information that 

you provide to them about your personal or financial situation. The CFPB recommends that you do not include names or account 

numbers and that users follow their organization’s policies regarding retention, storage, and disposal of documents that contain 

personal information.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 271

Tool 3:

Money services and banking

basics

Part of selecting the right financial service provider is knowing what product(s) or service(s) you 

need. Use the following tool to learn more about the basic financial products or services that 

may be available to you. Identify the places in your community where you can get the products 

or services you are interested in.

Common financial products or services

Check if 

you want 

to learn 

more about 

it

Common 

financial 

products or 

services

Description Where can you 

get this 

product or 

service?

Transaction or payment products or services

Checking 

account

Deposit money in and withdraw money from 

this account by writing checks or using a 

debit card. Suitable for frequent transacting. 

Many checking accounts include access to 

mobile and online bill pay. Always keep 

track of your account activity to ensure 

sufficient balances to cover payments and 

withdrawals and avoid overdraft fees. 

Check cashing Turn paychecks, government checks, or 

personal checks into cash, often for a fee. 

8
272 MODULE 8: MONEY SERVICES, CARDS, ACCOUNTS, AND LOANS: FINDING WHAT WORKS FOR YOU

 TOOL 3: MONEY SERVICES AND BANKING BASICS

Debit card You can use this card to make purchases at 

businesses (like grocery stores and gas 

stations) with money in your checking 

account. You can also use this card to 

make deposits to and withdrawals from a 

checking account at ATMs.

Automated 

teller machine 

(ATM) card 

Deposit in or withdraw money from a 

savings or checking account. Many ATM 

cards are also debit cards that can be used 

to make purchases. An ATM card that is not 

also a debit card cannot be used to make 

purchases at businesses. You will often not 

be charged a fee by using ATMs that are 

owned by your bank or credit union or 

within the same ATM network.

Prepaid debit 

card

A card that you use to access money you 

have paid in advance. A prepaid card can 

refer to a number of different types of cards. 

Gift cards are prepaid cards that typically 

are used up after you deplete the value on 

the card. You can also buy prepaid debit 

cards that you can add money to (reload) 

and continue using over and over. Some 

types of prepaid cards also allow you to 

take money out at an ATM. Reloadable 

prepaid cards generally charge a monthly 

maintenance fee, and some charge for 

deposits or each time you use the card. 

Prepaid debit cards may carry fewer 

consumer protections in the event of loss or 

a disputed charge than debit cards. 

Money transfer Send money from one place to another. 

Bill payment 

services

Use cash, a money order, a bank account, 

or another payment method to pay utility, 

mortgage, or other bills, in person, by 

phone, through a website, or through a 

mobile phone application. 

Money order Buy a money order to pay a business or 

other party; can be used instead of a check. 
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 273

Depository products or services

Savings 

account

Deposit money in and withdraw money from 

an account; earn interest (currently interest 

rates are low). Not intended for frequent 

transacting. 

Certificate of 

deposit

Deposit a fixed amount of money for a 

specific amount of time. Funds are 

generally inaccessible during the CD term 

unless you forfeit interest as a penalty. The 

size of the penalty varies, and could 

amount to more than the interest you have 

earned if you withdraw the money before 

the maturity date. Generally earns more 

interest than savings. 

Credit products or services

Credit card Borrow money up to an approved credit 

limit. Make purchases using the card or the 

number and card security code. A minimum 

monthly payment is required. Will be 

charged interest on unpaid amounts; can 

be charged other fees based on terms of 

contract. 

Line of credit Borrow money up to an approved credit 

limit. Getting approved for a line of credit is 

different from a credit card. It may be 

secured with collateral (such as a home), or 

be unsecured. Can be used for overdraft 

protection in a checking account. 

Car loan Borrow money to buy a used or new car. 

This will be an installment loan. The car will 

generally be pledged against the loan 

(collateral). 

Business loan Borrow money to start or expand a 

business. This will be an installment loan. 

Equipment or other business assets, or 

personal assets may be pledged against 

the loan (collateral). 
274 MODULE 8: MONEY SERVICES, CARDS, ACCOUNTS, AND LOANS: FINDING WHAT WORKS FOR YOU

 TOOL 3: MONEY SERVICES AND BANKING BASICS

Mortgage Borrow money to build or buy a home. This 

will be paid back in installments. The home 

will generally be pledged against the loan 

(collateral). 

Credit building products or services

Secured credit 

card

Borrow money up to a limit that is secured 

by a deposit. This deposit acts as collateral 

if you do not pay the credit card as agreed. 

Credit building 

loan

Borrow money specifically to improve credit 

scores. This may be available at banks or 

credit unions in your community. 

Other products or services 

Small dollar / 

Signature loan

Borrow small amounts of money. Generally, 

the loans have to be paid back quickly and 

the interest rate and fees are higher than 

bank or credit union loans or credit cards. 

Payday loan Borrow small amounts of money. You 

provide a check written for some time in the 

future—generally two weeks. If you don’t 

repay the loan and fees in full, the lender 

can cash the check. If your account does 

not have enough money in it to cover the 

amount, you may have to take out a new 

loan for the amount you don’t repay. 

Pawn shop 

loan

Borrow money against an item. If you do 

not pay back the loan as agreed or renew 

the loan, the pawn shop can sell the item to 

cover the debt. The loan amount is often 

much less than the item is worth. 

Car title loan Borrow money against your car, which is 

given as collateral. If you do not pay back 

the loan as agreed or renew the loan, the 

car can be sold to cover the debt. The loan 

amount is often much less than the car is 

worth. 

Technology-based services
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 275

Online 

banking

Manage your bank or credit union account 

through a secure website. This option may 

include a method to pay bills from your 

account, and is available through many 

banks and credit unions. 

Mobile 

banking

Use your smart phone to manage accounts 

and make payments through your bank or 

credit union’s website or mobile application. 

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 

This Tool may ask you to provide sensitive personal and financial information. The CFPB does not collect any information from you 

or the organization using this Tool. The CFPB is not responsible and has no control over how others may use the information that 

you provide to them about your personal or financial situation. The CFPB recommends that you do not include names or account 

numbers and that users follow their organization’s policies regarding retention, storage, and disposal of documents that contain 

personal information.
276 MODULE 8: MONEY SERVICES, CARDS, ACCOUNTS, AND LOANS: FINDING WHAT WORKS FOR YOU

 TOOL 3: MONEY SERVICES AND BANKING BASICS
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 277

Tool 4:

Opening an account checklist

Opening an account at a bank or credit union

If you decide that a checking or savings account is the right product for you, opening an account 

at a bank or credit union is really quite simple. 

First, you may want to get a recommendation from a trusted friend or family member for a bank 

or credit union. Find out about:

§ The services they offer

§ The interest they pay for savings accounts

§ The fees they charge

You will usually need between $25 and $100 to open a savings or checking account. 

TIP: Be sure to find out how much you must keep in the account at all times to 

avoid fees. This is called the “minimum balance requirement.” This may not be the 

same amount of money you need to open the account, so it’s important to understand.

You will also need two forms of identification to open an account. Some banks or credit unions 

will take one form of identification and a bill with your name and address on it. You will usually 

be required to present:

§ A U. S. government or state issued form of identification with your photo on it, such as a 

driver’s license, U. S. Passport, or military identification

and one of the following:

§ Your Social Security card

§ A bill with name and address on it

§ Your birth certificate
278 MODULE 8: MONEY SERVICES, CARDS, ACCOUNTS, AND LOANS: FINDING WHAT WORKS FOR YOU

 TOOL 4: OPENING AN ACCOUNT CHECKLIST

If you do not have a U. S. government-issued form of identification, some banks and credit 

unions accept foreign passports and Consular IDs, such as the Matricula Consular card, which is 

an official Mexican Government identification document. Other countries, such as Guatemala 

and Argentina have similar IDs. Consulates in the United State offer them. Visit your country’s 

consulate for more information about how to get an ID card, and with the banks and credit 

unions about whether they accept it.

Accounts that pay interest

Interest is considered income. If you earn interest, you must pay taxes on it. In order to open an 

account that pays interest, such as a savings account, you must have a Social Security number or 

an Individual Taxpayer Identification Number (ITIN).56

If you do not have a Social Security number, you do not have an ITIN, or you have not applied 

for an ITIN, you can open an account that does not pay interest.

Barriers to opening an account

Not having the proper identification can be one barrier to opening an account. Another potential 

barrier is a negative rating with specialty consumer reporting agencies like ChexSystems, 

TeleCheck, Early Warning, and others that report on checking accounts or banking histories. 

These agencies collect information from merchants, banks, and credit unions about how 

consumers manage savings and checking accounts. They do this for financial institutions that 

are a part of their network. Banks and credit unions use reports developed by these agencies to 

decide if someone can open a new account. You may have a negative rating if you or someone 

you had a joint account with has struggled with a checking or savings account in the past and:

§ Had a lot of bounced checks and non-sufficient funds (NSF) fees

§ Not paid debts and fees owed to a bank or credit union related to an account

§ Been suspected of fraud related to a checking account

 

56 Internal Revenue Service. See http://www.irs.gov/Individuals/General-ITIN-Information. 
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 279

§ Have had an account closed (involuntarily) by a bank or credit union within the last 12 

months

Involuntary closures stay on your ChexSystems report for five years and on the Early Warning 

System report for seven. Overdrafts remain on your consumer record for five years, even if you 

have paid back what you owe the bank or credit union. Each bank or credit union has its own 

policies about the way the information in your banking history report impacts your ability to 

open an account. This can include the amount of time that has passed since events like an 

involuntary closure or repeated overdrafts occurred. 

Some banks and credit unions require you to pay these old charges and fees before you are 

allowed to open a savings or checking account. In other cases, you may be offered the 

opportunity to open a “second chance” or checkless checking account that has different features 

and restrictions than standard checking accounts offer. Depending on the account’s rules, you 

may be allowed to open a standard checking account after six to twelve months if you have not 

over drafted or bounced any checks. 

You can order your own ChexSystems report online from ChexSystems at 

http://www.consumerdebit.com. You can call for more information at (800) 428-9623, or send 

a written request to:

ChexSystems, Inc. 

7805 Hudson Road, Suite 100 

Woodbury, MN 55125

You can order your TeleCheck Services Report by sending a written request to:

TeleCheck Services, Inc. 

Attention: Consumer Resolution – FA

P. O. Box 4514

Houston, TX 77210-4515

To request your Early Warning report, call (800) 325-7775. 

If you find mistakes, you can dispute these by sending a letter (you may choose to use certified 

mail) describing the mistake and copies of any evidence. 
280 MODULE 8: MONEY SERVICES, CARDS, ACCOUNTS, AND LOANS: FINDING WHAT WORKS FOR YOU

 TOOL 4: OPENING AN ACCOUNT CHECKLIST

Opening an account checklist

Use this checklist to ensure you have what you need to open an account at a bank 

or credit union.

Check 

for 

“yes”

Information needed Additional questions

A U.S. or foreign government issued form of 

identification with my picture on it. Note that each bank 

or credit union has its own policy on which foreign IDs 

it accepts.

Another form of identification:

§ Your Social Security card

§ A bill with name and address on it

§ Birth certificate

A Social Security number or ITIN (individual taxpayer 

identification number); if not, you may only be able to 

open an account that doesn’t pay interest.

Money to open the account

Information about:

Minimum balance required in the account to avoid 

monthly service fees

Monthly service fees

Direct deposit and whether it eliminates the monthly 

fee

Per-check or transaction fees

Fees associated with use of automated teller 

machines (ATMs)

Internet banking and online bill pay access and any 

costs 

Overdraft fees 

8
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 281

Low balance alert notifications

Other:

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 

This Tool may ask you to provide sensitive personal and financial information. The CFPB does not collect any information from you 

or the organization using this Tool. The CFPB is not responsible and has no control over how others may use the information that 

you provide to them about your personal or financial situation. The CFPB recommends that you do not include names or account 

numbers and that users follow their organization’s policies regarding retention, storage, and disposal of documents that contain 

personal information.
282 MODULE 8: MONEY SERVICES, CARDS, ACCOUNTS, AND LOANS: FINDING WHAT WORKS FOR YOU

 TOOL 4: OPENING AN ACCOUNT CHECKLIST
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 283

Tool 5:

Remittances

Consumers in the United States send billions of dollars in remittance transfers each year. The 

Consumer Financial Protection Bureau has issued rules to protect consumers who send money 

electronically to foreign countries. 

A “remittance transfer” is an electronic transfer of money from a consumer in the United States 

to a person or business in a foreign country. It can include transfers from retail “money 

transmitters” as well as from banks and credit unions that transfer funds through wire transfers, 

automated clearing house (ACH) transactions, or other methods.

Disclosures

The rules generally require companies to give disclosures to consumers before they pay for the 

remittance transfers. The disclosures must contain:

§ The exchange rate

§ Fees and taxes collected by the companies

§ Fees charged by the companies’ agents abroad and intermediary institutions

§ The amount of money expected to be delivered abroad, not including certain fees 

charged to the recipient or foreign taxes

§ If appropriate, a disclaimer that additional fees and foreign taxes may apply

Consumers must also receive information about when the money will arrive and how the 

consumer can report a problem with a transfer. Instead of issuing a separate pre-payment 

disclosure and receipt, a company may provide a single combined disclosure before the sender 

pays for the transfer, so long as proof of payment is given when payment is made.

Companies must provide the disclosures in English. Sometimes companies must also provide 

the disclosures in other languages.
284 MODULE 8: MONEY SERVICES, CARDS, ACCOUNTS, AND LOANS: FINDING WHAT WORKS FOR YOU

 TOOL 5: REMITTANCES

Other protections: The rules also generally require that consumers get 30 minutes (and 

sometimes more) to cancel a transfer if it has not yet been received. Consumers can get their 

money back if they cancel.

§ Companies must investigate if a consumer reports a problem with a transfer. For certain 

errors, consumers can generally get a refund or have the transfer sent again free of 

charge if the money did not arrive as promised.

§ Companies that provide remittance transfers are responsible for mistakes made by 

certain people who work for them.

The rules also contain specific provisions applicable to transfers that consumers schedule in 

advance and for transfers that are scheduled to recur on a regular basis. 

What is covered?

The rules apply to most remittance transfers if they are:

§ More than $15

§ Made by a consumer in the United States

§ Sent to a person or company in a foreign country

This includes many types of transfers, including wire transfers. The rules apply to many 

companies that offer remittance transfers, including banks, thrifts, credit unions, money 

transmitters, and broker-dealers. However, the rules do not apply to companies that 

consistently provide 100 or fewer remittance transfers each year.

This tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 285

Resources

If you would like help managing debt or rebuilding credit, visit the National Foundation for 

Credit Counseling: 

http://www.nfcc.org

Housing counselors can provide advice on buying a home, renting, defaults, foreclosures, 

and credit issues: 

http://www.consumerfinance.gov/find-a-housing-counselor

FDIC.gov, Credit Repair: 

http://www.fdic.gov/consumers/consumer/ccc/repair.html

Consumer.gov, Building a Better Credit Report: 

http://www.consumer.ftc.gov/articles/pdf-0032-building-a-better-credit-report.pdf

For additional resources, visit the Consumer Financial Protection Bureau website:

http://www.consumerfinance.gov/AskCFPB

If you have a consumer complaint, visit:

http://www.consumerfinance.gov/complaint

The CFPB has prepared this material as a resource for the public. This material is provided for educational and information 

purposes only. It is not a replacement for the guidance or advice of an accountant, certified financial advisor, or otherwise qualified 

professional. The CFPB is not responsible for the advice or actions of the individuals or entities from which you received the CFPB 

educational materials. The CFPB’s educational efforts are limited to the materials that CFPB has prepared. 

v
286 MODULE 8: MONEY SERVICES, CARDS, ACCOUNTS, AND LOANS: FINDING WHAT WORKS FOR YOU

 TOOL 5: REMITTANCES
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 287

MODULE 9:

Protecting your money

Part of being a smart consumer is understanding your rights. When you know you have rights, 

you can protect yourself. There are many laws that protect your rights when it comes to financial 

products and services. It is the CFPB’s job to enforce these laws and handle consumers’ 

complaints about financial products and services.

Have an issue with a product or service?

The CFPB has already handled over half a million consumer complaints about:

§ Credit cards

§ Mortgages

§ Bank accounts and services

§ Private student loans

§ Vehicle or consumer loans

§ Payday loans

§ Debt collection

§ Money transfers

§ Credit reporting

§ Prepaid cards

§ Other financial services (including check cashing, credit repair, traveler’s checks)
288 MODULE 9: PROTECTING YOUR MONEY

Based on these complaints and research, the CFPB takes action to stop practices that are unfair, 

deceptive, abusive, or otherwise violate the law. In many cases, it partners with other federal 

agencies and state officials to address these problems.

Through its enforcement actions, the CFPB can require companies to refund money to 

customers when their consumer rights have been violated.

Submitting a complaint to the CFPB

To submit a complaint, go to: http://www.consumerfinance.gov/complaint. From there, select 

the product or service that your complaint is about: bank account or service, credit card, credit 

reporting, debt collection, money transfer, mortgage, student loan, payday loan, money 

transfers, vehicle/consumer loan, prepaid card, or other financial services (including check 

cashing, credit repair, traveler’s checks). 

Fill out the form, providing as much detail as possible. The form will ask you: 

§ To describe what happened, in as much detail as possible

§ What you think a fair resolution to your issue would be

§ For your information (name/address/email)

§ For detailed information about the product and company you are complaining about. 

You will be asked to scan and upload any documentation that you have to support your 

complaint (Account agreements, monthly statements, proof of payment, etc.)

You will then be able to review and edit the information before clicking “Submit” to send your 

complaint. If you need help while you’re online, click on the link that says “Form Trouble? Chat 

now.” to talk with CFPB team members on the site. 

If you don’t use a computer or need help in a language other than English, you can also submit a 

complaint over the phone by calling the CFPB at 855- 411-CFPB (2372), toll free. U.S.-based call 

centers can help you in over 180 languages and can also take calls from consumers who are 

hearing impaired or speech-disabled.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 289

Tool 3: Submitting a complaint to the CFPB provides detailed information on how to submit a 

complaint, and how you can track the process. If you want more information on how complaints 

are handled, you can visit out complaint page at www.consumerfinance.gov/complaint. 57

It’s your money— take care

Ask questions

Even though the terms may be unfamiliar at first, shopping for financial products and services is 

no different from shopping for other kinds of products and services. Remember the following:

§ Don’t be intimidated.

§ If you want to work with a financial counselor or adviser, interview a few before choosing 

one.

§ Before you sign anything or give personal or financial information about yourself to an 

adviser, ask questions: What are your qualifications? How do you get paid? Are you 

working in my best interest?

§ If your friends or family members give you advice or information, it’s up to you to 

question them: Where did you get the information? Who gets paid what? Are you making 

any money on this?

“I have an amazing offer for you.”

Most of us have seen or heard something like this, for example an email offering the opportunity 

to receive millions of dollars from a foreign prince or a lottery you did not enter, or in jobs that 

say you can potentially earn $80/hour while working at home. Unfortunately, if the 

"opportunity" appears too good to be true, it probably is. If you run across an amazing sounding 

opportunity, job, or product, do your research with a critical eye, especially if you are receiving 

the “opportunity” via an unsolicited email! 

 

57 The Privacy Impact Assessment for the Consumer Response System is available at 

http://www.consumerfinance.gov/privacy-office/consumer-response-database
290 MODULE 9: PROTECTING YOUR MONEY

Con artists and scammers use creative and innovative schemes and appeals to get you to part 

with your money. Follow these principles to detect con artists and scammers:

§ Beware of promises to make fast profits and investments that claim to offer high returns 

at little or no risk.

§ Do not invest in anything unless you fully understand the deal. Consider running the 

opportunity by others that you trust to make sure that they share your understanding. 

§ Don't assume a company is legitimate based on the "appearance" of the website. 

§ Beware of requests for money from people you do not know. Research the parties 

involved and the nature of the deal or job. If you don’t know how to do this, ask someone 

that you trust to help you, or don’t deal with that person. 

§ Contact state and local consumer agencies to see if there is a complaint against the 

company.

§ Don't open spam. Delete it unread. And, never respond to spam.

§ Don’t open e-mail attachments from people you don’t know or attachments that you did 

not expect to receive.

You can say no

Scammers and con artists target polite people because they have a harder time saying no. If you 

feel pressured to make a decision, chances are you are being scammed. It may be hard, 

especially if it is a friend or relative, but just saying “No, I am not interested,” may save you from 

a financial loss. 

If people are pressuring you on the phone, you don’t have to continue the call if you feel 

uncomfortable. This is especially true if they are trying to verbally coerce you into buying, 

donating to, or investing in something. Tell them to take you off their list and then hang up.

Take care of your information

Just as you have to protect you money, you also have to protect your personal information. 

Never give out personal information, such as account numbers, passwords, or answers to
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 291

security questions over the phone or through email. Banks, credit unions, and other financial 

institutions will never call or e-mail you asking you to verify personal information.

Only provide the information if you initiated the call to a number you know is from the company 

or if you directly typed in the website address and you see signals that the site is secure. A secure 

website has:

§ A URL that begins with “https:”

§ A lock symbol next to the URL

§ Security authentications and certificates

You can prevent identity theft by guarding your identifying information carefully and only 

sharing it with a few trusted people. Use the checklist in Tool 2: Protecting your identity to 

make sure you are taking the right precautions in protecting your identity.
292 MODULE 9: PROTECTING YOUR MONEY
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 293

Tool 1:

Red flags

When making financial product or service purchasing decisions, watch out for the following red 

flags. Use this checklist. If you find you have checked one or more characteristics when you are 

considering a product or service, take a closer look.

Red flag list

Check 

for 

“yes”

Red flag Description

Sales tactics and red flags for loans and other financial products or services

Pressured sales 

tactics

You are pressured to purchase things or to take out loans you 

don’t want or can’t afford. 

Lack of uniformity Different staff or salespeople are telling you different things 

regarding pricing or other information.

Won’t put it in writing No one will give you clear information in writing—even when 

you ask for it.

Unexplained fees No one can explain what certain fees are for or why they are so 

high.

No clear cancellation 

or return policy

There’s no clear cancellation or return policy. Don’t assume that 

you are able to return a product or cancel a purchase.

Inconsistent 

information on interest

rates

The salesperson tells you about an interest rate, but the APR on 

the form is much higher.

Pushed to purchase You are being pushed to make a big-ticket purchase 

immediately. 

Steering and coercing Aggressive sales tactics are used to steer and coerce you 

toward a high cost loan, even though you could have qualified 

8
294 MODULE 9: PROTECTING YOUR MONEY

 TOOL 1: RED FLAGS

for regular prime loans.

Red flags when signing loan documents

Paperwork doesn’t 

match the sales pitch

The promises made to you by a salesperson are not in the 

papers that you are asked to sign.

Confusing fine-print A good rule of thumb is to refuse to sign anything that you don’t 

understand. 

Incomplete paperwork You are asked to sign a contract with blank spaces to be filled in 

later.

Additional insurance 

and other add-on 

products

Some lenders may insist on, intimidate, or imply that borrowers 

must buy unnecessary items—additional insurance, unneeded 

warranties, monitoring services, etc. They get incorporated into 

the loan amount, and the borrower pays interest on them over 

the life of the loan. 

Prepayment penalties Prepayment penalties are fees lenders require a borrower to 

pay if the borrower pays off a loan early.

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared.
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 295

Tool 2:

Protecting your identity

Though it might not seem like it, your identity is one of the most precious things you possess. 

Criminals who are able to steal your identifying information can pretend to be you, buying

things on accounts that you own or are under your name. This leaves you with their bills! It can 

also create problems with your credit reports and scores.

Identifying information is anything that is specifically unique to you, such as your: 

§ Credit card and bank account numbers

§ Driver’s license number

§ Date, city, and state of birth

§ Social Security number

§ Passwords or PIN numbers

Many people think that identity theft happens primarily online, and if you don’t shop online, 

you are safe. The reality is that most identity thefts take place offline—just the opposite of what 

many people think. In addition, in over half of the cases of identity theft, the thief is someone 

that the victim knows. Because of this, it’s important to be cautious with your identifying 

information, both online and in the real world.
296 MODULE 9: PROTECTING YOUR MONEY

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Steps to protect your identity checklist

Check 

for 

“yes”

Steps to protect your identity 

Check your credit report

Remove your name from all three credit bureaus’ (Equifax, Experian, and TransUnion) 

mailing lists by calling to opt-out at (888) 567-8688 or online at 

http://www.optoutprescreen.com – choose “forever” removal option. This prevents 

prescreened offers from falling into other people’s hands.

Check your credit at all three credit agencies each year using the free

https://www.annualcreditreport.com. If you see anything that is incorrect or suspicious, 

contact them immediately. (See Module 7: Understanding Your Credit Reports and Scores

for more information).

Limit access to your information

Don’t carry your Social Security card or number in your wallet or purse.

Remove your name from many direct mail marketers’ lists by registering with the Direct 

Marketing Association online form at http://www.dmachoice.org. Removing your name from 

marketers’ lists will create fewer opportunities for thieves to steal your information.

Remove yourself from most telemarketers’ lists by registering your phone number with the 

Do Not Call Registry at (888) 382-1222 or at http://.www.donotcall.gov. Numbers registered 

with the National Do Not Call Registry after February 2008 remain on it permanently.58

Never give your personal information to someone who calls you and asks for it, even if they 

say they are from your financial institution.

Use a shredder, scissors, or your hands to tear all papers with identifying information or 

account numbers into tiny pieces before throwing them out.

Give out your Social Security number only when absolutely necessary. Often when 

someone asks for it, you are not required to give it to them.

 

58 See http://www.consumer.ftc.gov/articles/0272-how-keep-your-personal-information-secure#offline. 

8
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 297

Practice online security

Commit all passwords to memory. Never write them down or carry them with you (not even 

on a post-it by your computer!).

Make sure passwords include upper- and lower-case letters, numbers, and do not include 

any words that can be found in a dictionary or names and dates that can be associated with 

you (your children’s names and birthdates, for example). Longer passwords are better. The 

best practice is to have a different password for each account. If you find it too hard to keep 

track of so many passwords, have separate, longer, harder-to-guess passwords for your 

financial accounts than for ordinary uses like your e-mail.

Don’t give out your financial or personal information over the Internet, unless you have 

initiated the contact or know for certain with whom you are dealing.

Never share identity information online unless the site is secure with an encryption program 

so no one can intercept your information. If secure, the web site address will start with 

https, not http. There will also be a lock icon () in front of the web address.

Do not reply to emails asking for personal banking information, even if they have a bank or 

PayPal logo! Financial Institutions will never ask for personal information via email. 

According to the Federal Trade Commission (FTC), identity protection means treating your 

personal information like cash or a valuable commodity. This means being careful not to leave it 

around, and being thoughtful about who is asking for it, why they need it, and how they’re going 

to safeguard it for you.

This is the FTC’s list of common red flags that your identity has been stolen:

§ There are mistakes on your bank, credit card, or other account statements.

§ There are mistakes on the explanation of medical benefits from your health plan.

§ Your regular bills and account statements don’t arrive on time.

§ You get bills or collection notices for products or services you never received.

§ You receive calls from debt collectors about debts that don’t belong to you.

§ You get a notice from the IRS that someone used your Social Security number.

§ You receive mail, email, or calls about accounts or jobs in your minor child’s name.
298 MODULE 9: PROTECTING YOUR MONEY

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§ You receive unwarranted collection notices on your credit report.

§ Businesses turn down your checks.

§ You are turned down unexpectedly for a loan or job.

If your identity has been stolen

The FTC recommends the following steps if you determine that your identity has been stolen:

1. Place a fraud alert on your credit file

Call one of the nationwide credit reporting agencies, and ask for a fraud alert on your credit 

report. The company you call must contact the other two, so they can put fraud alerts on your 

files. An initial fraud alert is good for 90 days. If you want to place an extended alert on your 

credit report after your identity has been stolen, you must file either a police report or a report 

with a government agency such as the FTC, known as an “identity theft report.” An extended 

alert is good for seven years. An extended alert requires that the creditor contact you in person 

or through the telephone number or other contact method you designate to verify whether you 

are the person making the credit request.

§ Equifax: (800) 525 6285

§ Experian: (888) 397 3742

§ TransUnion: (800) 680 7289 

2. Consider a security freeze

You can also place a “freeze” on your credit report. A security freeze means that potential new 

creditors cannot access your credit report. Only a limited number of entities can see your file 

while a freeze is in place, including existing creditors, certain government entities like child 

support agencies, and companies that monitor your credit file at your direction to prevent fraud. 

Because most businesses will not open credit accounts without checking your credit report, a 

freeze can deter identity thieves from opening new accounts in your name. Be mindful that a 

freeze does not prevent identity thieves from taking over existing accounts. Credit reporting 

agencies may charge for this service. In some states, identity theft victims are not charged to 

place a security freeze.

3. Order your credit reports 
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 299

Each company’s credit report about you is slightly different, so order a report from each

company. When you order, you must answer some questions to prove your identity. Read your 

reports carefully to see if the information is correct. If you see mistakes or signs of fraud, contact 

the credit reporting company. 

4. Create an identity theft report

An Identity Theft Report can help you get fraudulent information removed from your credit 

report, stop a company from collecting debts caused by identity theft, and get information about 

accounts a thief opened in your name. To create an Identity Theft Report, first file a complaint 

with the FTC at ftc.gov/complaint or (877) 438-4338; TTY: (866) 653-4261. Your completed 

complaint is called an FTC Identity Theft Affidavit. Next, you can take your FTC Affidavit to 

your local police, or to the police where the theft occurred, and file a police report. Get a copy of 

the police report. The two documents comprise an Identity Theft Report.

For more information from the Federal Trade Commission, visit: 

http://www.consumer.ftc.gov/features/feature-0015-identity-theft-resources.

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared.
300 MODULE 9: PROTECTING YOUR MONEY

 TOOL 2: PROTECTING YOUR IDENTITY
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 301

Tool 3:

Submitting a complaint to the 

CFPB

There are many laws that protect your rights when it comes to consumer financial products and 

services. One of the CFPB’s primary functions is to enforce several of these laws and handle 

consumers’ complaints about consumer financial products and services.

The CFPB accepts complaints on consumer financial products and services such as:

§ Credit cards

§ Mortgages

§ Bank (checking and savings) accounts and services

§ Private student loans

§ Vehicle or consumer loans

§ Money transfers

§ Credit reporting

§ Debt collection

§ Payday loans

§ Prepaid cards

§ Other financial services (including check cashing, credit repair, traveler’s checks)

To submit a complaint, go to: http://www.consumerfinance.gov/complaint. From there, select 

the product or service that the complaint is about. 
302 MODULE 9: PROTECTING YOUR MONEY

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How to submit your complaint

Fill out the form, providing as much detail as possible. The form will ask for pertinent 

information about the circumstances of the complaint and, in general, will: 

§ Ask you to describe what happened, in as much detail as possible

§ Ask you what you think a fair resolution to the issue would be

§ Ask you for your information (name/address/email)

§ Ask for detailed information about the product and company you are complaining about. 

Please scan and upload any documentation that you have here (Account agreements, 

monthly statements, proof of payment, etc.).

You will then be able to review and edit information before clicking “Submit” to send your 

complaint. 

If you need help while you’re online, click on the link that says “Form Trouble? Chat now” to talk 

with CFPB team members on the site. 

If you don’t use a computer or need help in a language other than English, you can also submit a 

complaint over the phone by calling the CFPB at (855) 411-CFPB (2372), toll free. U.S.-based 

call centers can help you in over 180 languages and can also take calls from consumers who are 

hearing impaired or speech-disabled.

Here is what will happen to your complaint:

Complaint submitted: The CFPB will screen your complaint based on several criteria. These 

criteria include whether your complaint falls within the CFPB’s primary enforcement authority, 

whether the complaint is complete, and whether it is a duplicate of another complaint you have 

submitted.

Review and route: If a particular complaint does not involve a product or market that is 

within the Bureau’s jurisdiction or that is currently being handled by the Bureau, Consumer 

Response refers it to the appropriate regulator. Screened complaints are sent via a secure web 

portal to the appropriate company—the business you have the complaint with.

Company response: The company reviews the information, communicates with you as 

needed. It then determines what action to take in response. The company reports back to you 
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 303

and the CFPB via the secure “company portal.” After your complaint is sent to the company, the 

company has 15 days to provide a substantive response to you and the CFPB.

Companies are expected to close all but the most complicated complaints within 60 days.

Consumer review: CFPB then invites you to review the response and provide feedback. 

Consumer Tracking: You can log onto the secure “consumer portal” available on the CFPB’s 

website or call a toll-free number to receive status updates, provide additional information, and 

review responses provided to the you by the company.

Review and investigate: The CFPB reviews your feedback about company responses, using 

this information along with other information such as the timeliness of the company’s response, 

for example, to help prioritize complaints for investigation.

Analyze and report. Complaints help with the CFPB’s work to supervise companies, enforce 

federal consumer financial laws, and write better rules and regulations. The CFPB also reports 

to Congress about the complaints we receive and makes anonymized consumer complaint data 

available to the public on its website format: 

http://www.consumerfinance.gov/complaintdatabase.

Contact information

Online: consumerfinance.gov/complaint

Toll-free phone: (855) 411-CFPB (2372), 8am-8pm EST, Monday - Friday

TTY/TDD phone: (855) 729-CFPB (2372)

Fax: (855) 237-2392

Mail:

Consumer Financial Protection Bureau

PO Box 4503

Iowa City, IA 52244

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 
304 MODULE 9: PROTECTING YOUR MONEY

 TOOL 3: SUBMITTING A COMPLAINT TO THE CFPB
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 305

Tool 4:

Learning more about 

consumer protection

Protecting your rights as a consumer starts with knowing that you have rights. The following 

consumer protection laws establish consumer rights related to financial services and products. 

This is not a comprehensive list, but it provides a starting place for understanding some of the 

many rights and responsibilities about which financial educators and coaches should be 

familiar.

Read the summary of each law below. Put a check in the “Follow Up for More Information” 

column if knowing a little more about this law will help you or people you know. Then follow the 

link listed within the “Short Description” or visit our website at www.consumerfinance.gov for 

more information.

Consumer 

Protection 

Law

Short Description Follow 

Up

Regulation B: 

Equal Credit 

Opportunity 

Act

§ The Equal Credit Opportunity Act (ECOA), implemented by Regulation B, 

makes it unlawful for any creditor to discriminate against any applicant, in 

any aspect of a credit transaction on the basis of race, color, religion, 

national origin, sex or, marital status, age (provided the applicant has the 

capacity to contract); because all or part of the applicant’s income derives 

from any public assistance program; or because the applicant has in good 

faith exercised certain consumer rights.

§ ECOA and Regulation B prohibit certain creditor practices, such as refusing 

to provide credit if an applicant qualifies for it; because of any prohibited 

basis; discouraging, on a prohibited basis, applicants from applying for 

credit; an offer of less favorable terms to an applicant than terms offered to 

someone similarly situated, because of any prohibited basis.

§ ECOA and Regulation B require creditors, among other things, to: 

o Notify applicants of actions taken on their applications within specified 

periods.

o If the creditor furnishes applicant information to credit bureaus, to do so 
306 MODULE 9: PROTECTING YOUR MONEY

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in the names of both spouses on an account.

o Retain records of credit applications for a specified period.

o Solicit information about the applicant's race and certain other 

protected characteristics in applications for certain residential 

mortgages for government monitoring purposes. 

o Provide applicants with copies of appraisals used in connection with 

residential mortgage applications.

o For more information about this law including information about how to 

detect, and protect yourself against discrimination, visit 

http://www.consumerfinance.gov/fair-lending.

Regulation C: 

Home 

Mortgage 

Disclosure 

Act

§ The Home Mortgage Disclosure Act (HMDA), implemented by Regulation 

C, requires certain mortgage lenders to collect and report loan data that can 

be used to: a) help determine if financial institutions are serving the housing 

needs of their communities; b) assist public officials in distributing publicsector investment to attract private investment to areas where needed; and 

c) assist identifying possible discriminatory lending patterns and enforcing 

antidiscrimination statutes. This data is available for use by the public as 

well as by federal and state regulatory and enforcement agencies.

§ Data fields required to be reported under HMDA include, for each 

application, the action taken by the creditor; the location of the property to 

be mortgaged; the race, ethnicity, and sex of the applicant; and the income 

relied on in the application. 

For more information about this law, visit

http://www.consumerfinance.gov/learnmore.

Regulation E: 

Electronic 

Fund 

Transfer Act

§ Establishes the basic rights, liabilities, and responsibilities of consumers 

who use electronic fund transfer services or send remittances and of the 

financial institutions and other companies that offer these services. 

“Electronic fund transfers” include transactions, for example, where you 

swipe your card at check-out, make purchases with your card by phone or 

online, or make deposits or withdrawals at an ATM. Remittance transfers 

sometimes called “international wire transfers”), include many common 

ways of transferring money to people in other countries.

§ Protects individual consumers engaging in electronic fund transfers or 

remittance transfers.

§ Restricts inactivity and service fees and limits how quickly funds can expire 

for gift cards, gift certificates, and certain other prepaid cards. Requires all 

fees and other important terms to be clearly communicated in writing. 

§ Applies to any transaction initiated through an electronic terminal, 

telephone, computer or magnetic tape in which a financial institution is told 

to either deposit or withdraw from an individual’s account at the financial 

institution. Establishes “opt in” provisions for overdraft fees on ATM 

transactions and non-recurring debit card transactions; financial institutions 
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 307

are prohibited from charging overdraft protection fees on these unless 

consumers opt in.

For more information on the “opt in” provisions for overdraft fees, visit

http://www.consumerfinance.gov/blog/whats-your-status-when-it-comes-tooverdraft-coverage.

For more information on remittance transfers (also covered under Regulation 

E), visit http://www.consumerfinance.gov/regulations/final-remittance-ruleamendment-regulation-e.

Regulation F: 

Fair Debt 

Collection 

Practices Act

§ The Fair Debt Collection Practices Act (FDCPA) is the main federal law that 

governs debt collection practices.

§ The FDCPA prohibits debt collection companies from using abusive, unfair 

or deceptive practices to collect past due debts from you.

§ The FDCPA covers the collection of consumer debt such as mortgages, 

credit cards, medical debts, and other debts primarily for personal, family, 

or household purposes. It covers personal debt, not business debt. 

§ The FDCPA does not generally cover collection by the person or business 

from whom you first borrowed money—it covers third party debt collections 

(debt collection agencies and debt-buyers involved in collection) and 

attorneys who collect debt on behalf of their clients.

For a summary of this law visit

http://www.consumerfinance.gov/askcfpb/329/what-is-the-fair-debt-collectionpractices-act.html.

Regulation M: 

Consumer 

Leasing Act

§ Ensures that people who lease personal property receive meaningful 

disclosures that enable them to compare lease terms with other leases and, 

where appropriate, with credit transactions.

§ Limits the amount of balloon payments in consumer lease transactions.

§ Provides for the accurate disclosure of lease terms in advertising.

For more information on leasing an automobile, visit 

http://www.consumerfinance.gov/askcfpb/815/should-i-buy-or-lease-whatsdifference.html.

Regulation P: 

Privacy of 

Consumer 

Financial 

Information 

(GrammLeach-Bliley 

Act)

§ Governs the treatment of nonpublic personal information about consumers 

by financial institutions and by institutions that use or re-use or re-disclose 

information from financial institutions. This type of information includes your 

account information and your Social Security number.

§ Provides a method for consumers to prevent a financial institution from 

disclosing that information to other businesses or individuals by “opting out” 

(there are exceptions to this).

§ Restricts when financial institutions may disclose non-public personal 
308 MODULE 9: PROTECTING YOUR MONEY

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financial information to other businesses or individuals.

§ Requires financial institutions to send privacy notices to consumers in 

specified circumstances.

For a link to Regulation P, visit: http://www.consumerfinance.gov/regulations.

Regulation V: 

Fair Credit 

Reporting Act

§ Provides guidelines and limitations for persons that get and use information 

about consumers to:

o Determine the consumer's eligibility for products, services, or 

employment; 

o Share such information among affiliates; and 

o Furnish information to consumer reporting agencies.

§ Limits the reporting of outdated negative information.

§ Limits who can access information in a consumer’s credit file.

§ Establishes consumer rights including the following:

o Consumers must be informed their filed has been used against them—

the information has led to a denial of a product, service, or employment.

o Consumers have the right to know what is in their file.

o Consumers have the right to dispute incomplete or inaccurate 

information; consumer reporting agencies must correct or delete 

inaccurate, incomplete, or unverifiable information.

For answers to common questions regarding this law, visit

http://www.consumerfinance.gov/askcfpb/search?selected_facets=tag_exact

%3AFair+Credit+Reporting+Act.

Regulation X: 

Real Estate 

Settlement 

Procedures 

Act

§ Provides advance disclosures of settlement costs to home buyers and 

sellers.

§ Prohibits kickbacks or referral fees for settlement services.

§ Regulates mortgage servicers’ management of escrow accounts 

established to ensure the payment of real estate taxes and insurance.

§ Requires Mortgage servicers to correct errors and provide certain 

information requested by borrowers

§ Requires mortgage servicers to provide information to delinquent borrowers 

about mortgage loss mitigation options and to establish policies and 

procedures for continuity of contact with servicer personnel regarding these 

options.

For more information about this law, visit 

http://www.consumerfinance.gov/knowbeforeyouowe and

http://consumerfinance.gov/regulatory-implementation.

Regulation Z: 

Truth in 

§ Promotes the informed use of consumer credit by requiring disclosures 

about its terms and cost such as APR (annual percentage rate).
YOUR MONEY, YOUR GOALS: A FINANCIAL EMPOWERMENT TOOLKIT FOR COMMUNITY VOLUNTEERS 309

Lending Act § Establishes uniform terminology for credit disclosures, such as APR.

§ Gives consumers the right in certain circumstances to cancel credit 

transactions that involve a lien on a consumer's principal dwelling.

§ Regulates certain credit card practices. 

§ Provides a means for fair and timely resolution of credit billing disputes 

§ Additional examples of what this law covers:

o Requires a maximum interest rate to be stated in variable-rate contracts 

secured by the consumer's dwelling. 

o Imposes requirements on home-equity plans and mortgages.

o Regulates practices of creditors who extend private education loans.

For more information on this law, visit

http://www.consumerfinance.gov/askcfpb/787/what-truth-lending-disclosurewhen-do-i-get-see-it.html.

Regulation 

DD: Truth in 

Savings Act

§ Ensures consumers are able to make informed decisions about accounts 

offered at depository institutions. 

§ Requires depository institutions (banks, credit unions, and thrifts) to provide 

disclosures so that consumers can make meaningful comparisons among 

depository institutions.

This Tool is included in the Consumer Financial Protection Bureau’s toolkit. The CFPB has prepared this material as a resource for 

the public. This material is provided for educational and information purposes only. It is not a replacement for the guidance or 

advice of an accountant, certified financial advisor, or otherwise qualified professional. The CFPB is not responsible for the advice or 

actions of the individuals or entities from which you received the CFPB educational materials. The CFPB’s educational efforts are 

limited to the materials that CFPB has prepared. 
310 MODULE 9: PROTECTING YOUR MONEY

 TOOL 4: LEARNING MORE ABOUT CONSUMER PROTECTION

Resources

Consumer.gov, Identity Theft:

http://www.consumer.ftc.gov/features/feature-0014-identity-theft

FBI.gov, Identity Theft:

http://www.fbi.gov/about-us/investigate/cyber/identity_theft

For information on finding a lawyer to represent you in a lawsuit by a creditor or debt 

collector:

http://www.consumerfinance.gov/askcfpb/1433/how-do-i-find-lawyer-or-attorneyrepresent-me-lawsuit-creditor-or-debt-collector.html

For additional resources, visit the Consumer Financial Protection Bureau website:

http://www.consumerfinance.gov/AskCFPB

If you have a consumer complaint, visit:

http://www.consumerfinance.gov/complaint

The CFPB has prepared this material as a resource for the public. This material is provided for educational and information 

purposes only. It is not a replacement for the guidance or advice of an accountant, certified financial advisor, or otherwise qualified 

professional. The CFPB is not responsible for the advice or actions of the individuals or entities from which you received the CFPB 

educational materials. The CFPB’s educational efforts are limited to the materials that CFPB has prepared.

v