ASSETS MA P SAMPLE- NOT FOR USE COACH S OUTCOME 4 CONSISTENT AND INCREASED SAVINGS ASSETS MAP

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1 OUTCOME CONSISTENT AND INCREASED SAVINGS MAP Coach s Checklist Action 1 Assess Customer s Use of and Eligibility for Income and Work Supports Monthly Income and Expenses worksheet completed Employer benefits researched Benefits implemented Publicly-supported safety nets researched Safety nets established Health insurance in place Child-care plan in place Career advancement plan in place and action steps pursued (referred to One Stop, resume improved, skills training programs researched) Action 2 Provide Detail About Savings as an Asset Auto-deduct to savings account established Biweekly savings plan implemented Action 3 Advise Customer about Creating and Maintaining Savings Savings account opened Customer has one month s rent saved (or amount to get out of a jam) Savings-to-income ratio increased Action Advise Customer about Building Long-Term Safety Nets Life insurance researched and established Renters and auto insurance researched and established Disability insurance researched and established Retirement or education savings plans researched and established Long-term assets researched (e.g. home-buying, microenterprise, education) Code A18 A1 A15 A2 A16 A3 A A17 A5 A6 A7 A8 A9 A10 A11 A12 A13 A1 GOAL BANKING CREDIT DEBT TAXES

2 ROAD SIGNS Assets - strategies to help people achieve economic security and create opportunities for their children. Safety nets - programs and assets that help people weather financial stressors and create economic security, includes income and work supports. Income supports safety nets that are paid to low-income or unemployed people to relieve a financial need; do not necessarily need to be employed. Work supports safety nets that are paid to working individuals (e.g. Earned Income Tax Credit). TO BEGIN, YOU NEED: Customer s combined family income and supporting documents Completed assessment action plan GOAL BANKING CREDIT DEBT TAXES

3 ACTION 1ASSESS CUSTOMER S ELIGIBILITY FOR INCOME AND WORK SUPPORTS Task Explain what safety nets are and why they are important. Work with customer on the Monthly Income and Expenses worksheet and brainstorm with customer about ways to reduce and eliminate certain expenses. Advise customer to RESEARCH BENEFITS PROVIDED BY EMPLOYER. These benefits include: flex spending for health care or child care expenses, TransitChek, tuition reimbursement and 01(k) matching. Identify appropriate track for customer for PUBLICLY-SUPPORTED SAFETY NETS by asking for income: Proceed with Action 1 if customer s income is less than 275% of federal poverty level. Proceed with Action 2 if customer s income is greater than 275% of federal poverty level, but first ask about health insurance and childcare. Ask customer which income supports he or she receives. Use the Public Benefits Screening chart of commonly used income supports to figure out the percentage of poverty when work supports drop off and which other safety nets might apply. Instruct customer to apply for any emergency safety nets not already receiving For the road: Four ways to create more money THAN month (#7) Check eligibility for AEITC, EITC, and CTC by first asking if the customer has filed a tax return in any of the last three years. Then refer to the Coach s Map on Taxes. Safety nets are designed to weather financial storms and deal with life s roadblocks. It can be as simple as setting up a savings account, preferably linked with an auto-deduct feature linked to a checking account. A good first savings goal can be created by having the customer think about the last time they got into a jam (e.g. unexpected medical bill, late rent, higher than expected utility bill). Ask the customer to remember how much it took to get them out of that jam, and that it could be their! Obtaining the customer s income information may not be straightforward. The customer may have multiple sources of income. Ask lots of questions. Other possible safety nets include backup childcare plan, health insurance for prescriptions, and disability insurance. f GOAL BANKING CREDIT DEBT TAXES

4 ACTION 1 CONTINUED... Task Ask customer about HEALTH INSURANCE COVERAGE. Inform customer about these free and low-cost options if customer and/or children do not have health insurance coverage. Child Health Plus A or Child Health Plus B Healthy New York Family Health Plus For the Road: see the Public Benefit Screening Chart for more details about income eligibility levels. Ask about CHILDCARE. Customers just leaving public assistance may be eligible for Transitional Child Care (TCC) and -year-olds may attend Universal Pre-K. ASK about customer s employment situation. Create a CAREER PLAN by exploring strategies for increasing income More hours/moonlighting Overtime Better job Develop skills Generally speaking family monthly income must be under (in some cases well under) $3,000/month to qualify for any of these programs. Universal Pre-K is free. Child must turn four by 12/31. Most programs are half-day, but some are full day. GOAL BANKING CREDIT DEBT TAXES

5 ACTION 2 PROVIDE DETAIL ABOUT SAVINGS AS AN ASSET Task Get customer thinking about savings: Acknowledge that even though you know the customer doesn t have extra money to save, the habit of saving - even if it s only a tiny amount - is critically important. Emphasize that establishing good savings habits now will help customer down the road when more money becomes available. Stress the importance of savings and that customer should consider savings as a regular expense. Counter pessimism: everyone can save even only if it s just a small amount ($5) each pay check or $1 or $2 a day, it is still far better than saving no money at all. The action is more important than the amount. Stress that saving even a small amount of money will create good habits. Formulate a savings plan with specific amounts of how much customer will save each month and how customer will actually save this money. Brainstorm about concrete short and long-range savings goals and how and when they can be achieved. For the road: 9 Savings Tips (#20) 5 STEPS TO MY GOAL (#11) MY DESTINATION WORKSHEET and PROMISSORY NOTE Discuss different kinds of savings (emergency, long-term, short-term). Explain what assets are and why having assets is much better than spending money on goods that depreciate in value. Discuss the magic of compounding interest in savings. Contrast with the horror of compounding credit card debt. Savings is about paying yourself first. FYI It s not what you save, it s how you save. Studies have found that lower income Americans actually have higher savings rates than people who earn more. Often customers use their savings even before they get to their rainy day goal which is just fine handling emergencies is the exact purpose of the savings. Once excess expenses have been eliminated, any money saved should go directly to savings, not to anything else. Best savings plan is one where money is AUTOMATICALLY DEDUCTED BIWEEKLY from checking account or from paycheck and put in a savings account, just like payroll taxes are withheld. If you don t see the money, you won t miss it and won t be tempted to spend it. For example, a new car loses 30% of its value in the first year. If customer wants to buy a car, it would be much better to buy used and then put the money saved into savings where it will earn interest. An 18% credit card debt will double in years. Money in savings will also double but it will take longer. For example, at a % interest rate (typical for savings accounts) it will take money 18 years to double in value. GOAL BANKING CREDIT DEBT TAXES

6 Task Advise customer to OPEN a high-yield SAVINGS ACCOUNT. Recommend accessing the Internet at a public library if customer does not have Internet access at home. Customer will need to obtain a library card, which is free. Help customer create rainy day fund by engaging customer in a discussion of progressively aggressive savings goals. Explain that the overall goal is an INCREASED SAVINGS-TO-INCOME RATIO. Emphasize that although it may take time to reach these goals, customer should save as much as he or she can from every single paycheck (biweekly without fail) even if it s only a few dollars a paycheck. Plan possible rewards (affordable ones) that customer can give him/herself for meeting each goal (e.g. magazine subscription, article of clothing). ACTION 3ADVISE CUSTOMER ABOUT CREATING AND MAINTAINING SAVINGS. Some good high-yield savings accounts to research include: Emigrant Direct www. emigrantdirect.com HSBC Direct - com ING Direct E*TRADE Complete Savings Account High-yield interest rates aren t the only thing customers should shop for. Ease of savings is another critical factor. For example, ING Direct has an Automatic Savings Plan, which allows the user to automatically put a specific amount of money into savings at regular intervals (e.g. $25 every two weeks). ING Direct also allows the user to set up sub-accounts to save for specific goals (kids college, down payment on house, etc.). See The more financially stable the customer, the more aggressively the customer should be saving. Get customer to commit to saving as much of each paycheck as possible. Sample goals: last-time-i-got-into-a-jam amount one month s rent one month of all expenses three months of all expenses GOAL BANKING CREDIT DEBT TAXES

7 Task Explain to customer the importance of LIFE INSURANCE (to provide support to family if the customer were to die). Explain the importance of RENTERS INSURANCE (protect personal property against fire, theft and vandalism). Recommend that customer research renters insurance policies offered by major providers, such as State Farm, AAA, Allstate, and Geico. Explain what DISABILITY INSURANCE is (provides policy holders with a certain percentage of their income for a certain period of time if they become disabled). DETERMINE customer s disability insurance coverage (Is it offered by employer?) Ask customer to bring in details of the policy if customer s employer does have disability insurance (customer may not know whether his employer offers disability insurance or not) for the next meeting. Help customers research a Supplemental Needs Trust if customer or anyone in customer s family is physically or mentally disabled. This instrument will essentially allow the disabled person to have assets and still receive government health care benefits like Medicaid. Advise customer about RETIREMENT/EDUCATION SAVINGS PLANS that he or she may establish: Traditional IRAs Roth IRAs 529 College Savings Plans (allows people to save money for their children s education and save money on income tax) Certificates of Deposit Stock and Bonds For the road: SEVEN TIPS TO GET YOUR IRA INTO HIGH GEAR (#25) REDUCE YOUR TAXES AND SAVE FOR RETIREMENT WITH AN IRA (#2) ACTION ADVISE CUSTOMER ABOUT BUILDING LONG-TERM SAFETY NETS Customers interested in IRAs should do some online research and go to the websites of a few mutual fund companies: Vanguard - Fidelity - and AIM Investments College Savings Plans are sponsored by states, check out the New York website: nysaves.uii.upromise.com/ 529 Plans can be augmented by participating in Upromise, which essentially functions as a rewards program in which a small percentage of each qualified purchase goes into the 529 account for college savings. Go to for more details. Term life insurance is probably the best option for most people. A great life insurance policy finder is available at If the customer intends to hold onto an insurance policy for his or her entire life, a whole life policy is probably a better idea, but whole life insurance policies have higher premiums than term life insurance policies. If customer works in a physically demanding job (e.g. construction or health care), buying disability insurance becomes even more prudent. A lawyer will need to set up this trust for the customer. This trust could be especially important if the customer or a family member was injured and was awaiting or had already received payment from a personal injury lawsuit. Certificates of Deposit (CDs) should pay a little more than 5% APY, but their interest rates are not that much higher than highyield online savings accounts. CDs do make it more difficult to withdraw money, which may be an advantage for customers who have a hard time saving. Customers should not consider stocks and bonds until they have a well-established IRA and other savings intact. These investments are considerably more risky. GOAL BANKING CREDIT DEBT TAXES

8 ACTION CONTINUED... Task Counsel customer about the tremendous benefits of more education (job with higher pay) and possible sources of funding. Advise customers on saving for particular things beyond the safety net, such as Vacations Charities Family Personal growth (higher education, skills training, cooking classes) Vehicles Counsel customers interested in starting their own businesses to look into microenterprise financing for loans. Provide customer with HOME-BUYING advice. Special programs for lowincome home buyers include: FHA loans HomeFirst Downpayment Assistance Program Habitat for Humanity ACORN Housing Corporation Good Neighbor Next Door Program For example, eligibility for FHA loans, include: Savings down payment at 3% of purchase price Debt-to-Income ratio below 2% taking into account mortgage Recent credit history more important than actual score: should have no recent late payments, collections, liens, etc. Can only have one FHA loan at a time FOLLOW UP QUESTIONS How has your progress been on the action steps we talked about in our last meeting? What problems have arisen with your safety nets? Let s see what we can do to address them. How has your saving been going? Has it been difficult to stick to the savings plan? Have you been able to increase the amount you are saving? Let s see what we can do to help you save better. Some employers offer educational benefits and may be willing to pay a portion or even all of an employee s education costs. There may be other sources of funding available as well. Using auto-deduct and sub-account features make saving for a bunch of different things very easy. Several nonprofits offer loans to new businesses: Project Enterprise Workforce1 Centers call 311 Women s Venture Fund Accion More information for low-income homebuyers is available at this website: buyers/nychome-buyerresources.shtml GOAL BANKING CREDIT DEBT TAXES