Welcome to the "Mind Your Financial" Financial Literacy modules!

As you know, there is more to the Habitat program than just meeting requirements. You have to become loan-ready! As a supplement to the Budgeting classes, the following information will help you learn even more about taking control of your finances!

Please continue to work with the Finance Team about your specific situation as they are helping prepare you for your loan. The information in this and other financial modules is not a replacement for your work with them. 

In order to successfully complete this and the other Mind Your Finances modules, you will need to read the information given and answer the questions throughout.  

Each "Mind Your Finances" module is worth up to 3 Sweat Equity hours. 

Personal finances have gotten increasingly complicated over the past few decades. Understanding your finances begins with:

1. setting financial goals,

2. understanding how to budget and spend, and

3. making wise financial choices in your day-to-day activities.

Financial literacy, for the purpose of this program, can be described as the understanding of money and how it is spent and saved.

Financial success is achieved by spending money carefully, saving consistently, and investing wisely.

Understanding Money

The first step to financial literacy is to develop a respect for money. Money helps feed you, clothe you and house you. Money brings you the world through the screen of a television or computer, via cable and internet services. Money allow you to purchase gifts for yourself as well as others and to have experiences you would otherwise not have (travel, education, thrills and luxuries).

Through employment, people earn money. The money that is earned is used to pay for needs (food, shelter, security) or wants (impulse buys). The difference between what is earned and what is spent is savings... if it's a positive amount. If the amount is negative, you need to reduce spending, increase income, or borrow the difference.

Money earned each month is spent, saved or invested. Most people put all their energy into spending. Our goal is to get you focused on saving.

Understanding Finances

Get Organized - This is the first step in taking control of your financial situation. Getting organized is physical and emotional. It means setting up easy-to-use filing systems for all your financial information, and it means emotionally dealing with your financial situation and being honest with yourself.

Develop Goals - We want you to develop short-term, medium-term, and long-term goals by reviewing them regularly.

Create a Budget and Spending Plan - Budgets and spending plans serve as road maps. They provide direction and clarity. They don't have to be complicated documents, and you don't need an expensive software program and computer to have them. They just need to be created.

Maximize your Employee Benefits - Typically employee benefit programs provide more than just health care. You can be more effective with your money by having a complete understanding of your employee benefits package.

Use all that is available to you - Don't leave money on the table. Have a complete understanding of what is available to you either with your current financial services providers, your community, or your work.

Take responsibility for your Financial Direction - You are in charge of your destiny, and you are in control of your finances. Own the decisions you make and make them only when you have a full and complete understanding.
 

Setting Financial Goals

Setting financial goals is your first step to managing your financial future. Setting financial goals is not easy. You may save money for months for a vacation only to have an unexpected medical bill knock your fund back to zero. But success can be achieved with the right mindset. Without that vacation fund, you may have been forced into debt (or worse) by an unexpected medical bill. With it, you met your obligation in full and on time.

Our focus is to help you be financially prepared to deal with surprises rather than have surprises deal with you.

What are goals?

A goal is something you're willing to work for. The best way to reach your goal is by making a plan AND following it. A goal has to be SMART.

Specific - State your intention. All your goals should begin with "I will".

Measurable - In order to evaluate how you are doing, you need some measure of your success.

Attainable - Goals can't be so challenging that they are impossible to meet. You need to feel a sense of accomplishment (regularly) after meeting attainable goals.

Rewarding - This feeling is important, as it confirms that your goal is worth achieving. Set priorities to your goals, so you focus on what is most important to you.

Timely - Choose a reasonable time frame for the achievement of your goals. Goals are frequently classified in terms of how long they will take to accomplish.

When you examine your own goals, you'll discover that some are broad and far-reaching, while others are narrow in scope. While you should dare to dream, you need to be realistic about what you can attain.

When writing financial goals it's best to focus on three types of goals: short-term (0 to 1 month), medium-term (1 to 6 months), and long-term (more than 6 months). All goals must be realistic and actionable.

Short-term goals should be measured in weeks. Short-term goals provide immediate feedback and gratification. The following are examples of short-term financial goals:

• I will go to the bank and start a savings account with $50 by next Friday.
• I will put $50 into my new savings account from each paycheck starting with the next paycheck.
• Starting Monday of next week. I will bring lunch to work every day.

Medium-term goals should be able to be accomplished within a 6 month time frame. They are achievement-oriented and provide the opportunity for reflection and feedback. The following are examples of medium-term goals:

• By the end of three months, I will have $1500 in my savings account.
• I will shop for car insurance and find ways to save at least 15% on my payment by November 15.

Long-term financial goals can take years to achieve. These include saving money for a down payment on a home, a child's college education, and your retirement. They may also include paying off a car, your student loans or credit card debt. The following are examples of long-term goals:

• I will set up a college fund for my children. 
• I will pay my mortgage off 5 years early. 

Tips to Stay Motivated

Reaching your goals may be a challenge, so you'll constantly need to remind yourself of your goals. Some tips:

Write your goals out and put reminders where you will see them.

Envision yourself achieving them. Create a mantra or saying that will help you stay on track mentally. 

Develop your goals hand-in-hand with your budget and spending plan, so your goals are reinforced by your financial behavior.

Reward yourself once a goal is accomplished. A small, personal reward can be key in maintaining new financial habits!  

Congratulations on completing the first module of Mind Your Finances! Please make sure you have read all of the material and completed all of the activities in this module before clicking submit.