Table of Contents CreditSmart Module 10: Planning for Your Future Welcome to Freddie Mac s CreditSmart Initiative... 4 Program Structure... 4 Using the Instructor Guides... 5 Lesson Concepts and Icons... 6 How to Access the WBT... 6 Tips for Instructors... 7 Workshop Preparation Tips... 7 Before the Workshop Begins... 7 Adult Learning Tips... 8 Instructor Training... 8 Introduction to Module 10: Planning for Your Future... 9 Module Overview... 9 Glossary... 9 Topic 1: Steps to Financial Success... 10 Overview... 10 Steps to Financial Success... 10 Start the Discussion... 10 Topic 2: Secure Your Future... 11 Overview... 11 Secure Your Future... 11 Start the Discussion... 11 Topic 3: Keep Your Credit in Good Shape... 13 Overview... 13 Keep Your Credit in Good Shape... 13 Start the Discussion... 13 Topic 4: Think Long-Term... 15 Overview... 15 Think Long-Term... 15 Start the Discussion... 15 Topic 5: Prepare for Life s Unexpected Challenges... 17 Overview... 17 Prepare for Life s Unexpected Challenges... 17 Start the Discussion... 17 2 2013 Freddie Mac CreditSmart Instructor s Guide Module 10: Planning for Your Future
Module Conclusion... 19 Module Summary... 19 Appendix A: Glossary... 20 3 2013 Freddie Mac CreditSmart Instructor s Guide Module 10: Planning for Your Future
Welcome to Freddie Mac s CreditSmart Initiative This consumer financial education and outreach initiative is designed to help consumers build and maintain better credit, make sound financial decisions, and understand the steps to successful long-term homeownership. In this guide, you ll find everything you need to lead participants through real-life scenarios, group discussions and activities that will encourage them to apply these lessons to their daily lives. By sharing the CreditSmart resources with others, you ll help them increase their financial understanding, gain life-long money management skills, and show them how to avoid costly mistakes. Program Structure The CreditSmart Curriculum includes 12 complete financial education modules that can be completed in two ways self-paced online or in a classroom setting. Module Title 1 Your Credit and Why It Is Important 2 Managing Your Money 3 Goal Setting 4 Banking Services: An Important Step 5 Establishing and Maintaining Credit 6 Understanding Credit Scoring 7 Thinking Like a Lender 8 Avoiding Credit Traps 9 Restoring Your Credit 10 Planning For Your Future 11 Becoming a Homeowner 12 Preserving Homeownership: Protecting Your Home Investment 4 2013 Freddie Mac CreditSmart Instructor s Guide Module 10: Planning for Your Future Continued on next page
Welcome to Freddie Mac s CreditSmart Initiative, Continued Using the Instructor Guides The Instructor Guides can be used alone or as an adjunct to the Web-Based Training (WBT) program. Even if participants choose not to experience the program online, gaining familiarity with the WBT will help you present the material more effectively. The most up-to-date content can always be found online at www.freddiemac.com/creditsmart/consumer_training.html. Each of the twelve CreditSmart modules has its own Instructor Guide which follows the organization of the Web-Based Training (WBT) available online, and includes much of the same content. Each Instructor Guide includes: A glossary of all the relevant terms introduced in the module A module introduction which includes An overview Learning objectives Sample discussion questions to start the lesson The Basics a list of bullet points outlining the key concepts of the lesson A lesson summary of all the key concepts in the lesson Activities, knowledge checks, discussion questions, and handouts 5 2013 Freddie Mac CreditSmart Instructor s Guide Module 10: Planning for Your Future
Lesson Concepts and Icons Each module topic will present several key concepts. These concepts are introduced to your participants in a variety of ways described in the table below. Activity Discussion Knowledge Check An activity usually involves class participation, whether it is a game, exercise, or worksheet completion. Typically after an activity you will have the opportunity to lead a discussion. Discussions allow you to introduce key concepts while involving your participants in the conversation and making the information relevant to them. Sample questions are included in each lesson to help you guide the discussion. There are short knowledge checks throughout each topic designed to start discussions or quickly test participants knowledge of certain concepts. How to Access the WBT The CreditSmart Web-Based Training (WBT) is available free of charge in both English and Spanish and can be accessed online at www.freddiemac.com/creditsmart/consumer_training.html. 6 2013 Freddie Mac CreditSmart Instructor s Guide Module 10: Planning for Your Future
Tips for Instructors The following tips and suggestions will help to ensure the successful delivery of the CreditSmart curriculum. Workshop Preparation Tips Select handouts and exercises for each topic in advance to help enhance your presentation and discussion with participants. Determine if you will need other instructional materials such as overhead transparencies, slides, flip charts, handouts, and videos. Arrive at the workshop location early to set up. Decide how the room should be set up (e.g., classroom style, lecture). Make sure that all of the necessary equipment, such as a computer and projector is available and working. Provide a sign-in sheet and allow space (e.g., side table, counter, etc.) for handouts and resource materials. Set up refreshments, if provided. Provide adequate signs directing participants to the workshop location. Greet and welcome participants individually as they arrive. Begin the workshop promptly. Distribute and collect evaluation forms before the end of each workshop. Confirm that all participants have signed the sign-in sheet to ensure credit for attending the workshop. Before the Workshop Begins Welcome participants and introduce yourself. Review logistics (session length, restroom location, breaks, etc.). Provide a brief history of the CreditSmart curriculum, which you can find a www.freddiemac.com/creditsmart. Provide an overview of workshop materials. 7 2013 Freddie Mac CreditSmart Instructor s Guide Module 10: Planning for Your Future
Tips for Instructors, Continued Adult Learning Tips Adults learn in different ways; therefore, you will want to use different techniques, vary your presentation style, and be sensitive to how your students are responding. Relate the content to what your students already know. Doing so will make your workshop more effective and will help to ensure participants retain more information. Be sensitive to those with special needs and/or learning disabilities. Use ice breakers, activities, exercises, and/or videos to break up the flow of your presentation. Supply handouts and local and/or national articles that highlight the topic being presented. Poll the audience to gauge participants level of knowledge of the topic being presented. Research available community credit counseling resources in advance to ensure that consumers have access to appropriate referrals, as necessary. Instructor Training Freddie Mac provides CreditSmart instructor training for anyone who is interested in teaching the CreditSmart curriculum. Select one of the options below: Contact Freddie Mac by emailing: creditsmart_training@freddiemac.com. Attend a CreditSmart Train-the-Trainer workshop hosted by Freddie Mac. This instructor training series includes a comprehensive review of the CreditSmart curriculum, plus instruction on best practices in conducting effective classroom training. Visit http://www.freddiemac.com/creditsmart/for more information. 8 2013 Freddie Mac CreditSmart Instructor s Guide Module 10: Planning for Your Future
Introduction to Module 10: Planning for Your Future Module Overview This module will provide participants with a summary of the information and tools needed to begin taking the steps to achieve their goals and attain financial security. Learning Objectives After completing this module, participants should be able to: Describe four steps to financial success Make sound financial decisions now and in the future Module Topic: Introduction to Steps to Financial Success Securing Your Future Keeping Your Credit in Good Shape Thinking Long-term Preparing for Life s Unexpected Challenges This topic includes activities to help simulate real-world scenarios with your participants. Glossary A Glossary is included in Appendix A of this guide, and contains definitions and descriptions of terms and phrases related to this module. A Glossary is also included in the Participant Presentation. Encourage your participants to use the Glossary during and after the class to become more familiar with the terminology. 9 2013 Freddie Mac CreditSmart Instructor s Guide Module 10: Planning for Your Future
Topic 1: Steps to Financial Success Overview This topic provides an overview of the steps to take to achieve financial success. Time 15 minutes Steps to Financial Success The Basics Everything that you have already done and the financial decisions that you have made in the past are actually all a part of your future. You can achieve the financial goals that you set for yourself and attain financial security through good money management, smart spending, and establishing and maintaining a good credit history. You will be better able to expand your economic opportunities and realize your goals and dreams by understanding credit and credit systems. Start the Discussion To start the discussion with your participants, ask some open-ended questions. Here are some examples to get you started: What are your short term and long term goals? What plans do you have in place to achieve these goals? What do you value? A nice home? Money in the bank? 10 2013 Freddie Mac CreditSmart Instructor s Guide Module 10: Planning for Your Future
Steps to Financial Success Topic 2: Secure Your Future Overview This topic discusses steps to take to secure your financial future. Time 15 minutes Secure Your Future The Basics Having a financial strategy is critical because you may spend several years in retirement. Everyone s retirement strategy will be different. Track your spending and create a spending plan. Pay yourself first: open a savings account and checking account. Set up an emergency fund. Be systematic: use payroll savings. Educate yourself about personal finance. Start the Discussion To start the discussion with your participants, ask some open-ended questions. Here are some examples to get you started: How much money do you think you should save for emergencies? What tools do you use to track your spending? How much money do you think you will need per year to retire? What types of things can help protect your financial future? 11 2013 Freddie Mac CreditSmart Instructor s Guide Module 10: Planning for Your Future
Topic 2: Secure Your Future, Continued Start the Discussion (continued) Instructor note: Define the following terms: Secure Your Future Term Spending Plan Savings Account Checking Account Definition A spending plan is an itemized list of all of one's expenses. Spending plans are tools commonly used to measure or gauge expenses against income. An account where you keep money for safekeeping or as an investment that earns interest. An account that lets you write checks to pay bills or to buy goods. The financial institution takes the money from your account and pays it to the person named on the check. The financial institution sends you a monthly record of the deposits made and the checks written. 12 2013 Freddie Mac CreditSmart Instructor s Guide Module 10: Planning for Your Future
Topic 3: Keep Your Credit in Good Shape Overview This topic discusses four ways to maintain good credit. Time 15 minutes Keep Your Credit in Good Shape The Basics Make all payments on time. Reduce your debt. Limit the number and use of credit cards. The money you owe is called debt. It is important to use credit responsibly and avoid having too much debt. If you understand how credit works and use it wisely, it can help you reach your goals. Start the Discussion To start the discussion with your participants, ask some open-ended questions. Here are some examples to get you started: What risks do you take when you take out a loan or use your credit card? How can you minimize these risks? How many credit cards do you have? Do you think it s too many or would you like more? What kinds of things do you purchase with a credit card? Continued on next page 13 2013 Freddie Mac CreditSmart Instructor s Guide Module 10: Planning for Your Future
Topic 3: Keep Your Credit in Good Shape, Continued Start the Discussion (continued) Instructor note: Define the following terms: Keep Your Credit in Good Shape Term Debt Credit Report Definition What is owed to a person or institution for obtaining merchandise or services without immediately paying for them. Usually, a debt is acquired through a loan or the use of credit. A credit report provides a history of your use of credit. Specifically, it's a file maintained by a credit reporting agency that contains information about a person, such as where the individual works and lives; information reported to the credit reporting agency by creditors regarding money borrowed and payments made; and public record information, such as whether the person has filed for bankruptcy. 14 2013 Freddie Mac CreditSmart Instructor s Guide Module 10: Planning for Your Future
Topic 4: Think Long-Term Overview This topic discusses ways to restore your credit if you ve experience credit problems in the past. Time 10 minutes Think Long-Term The Basics Estimate your pension or retirement needs. Know your Social Security benefits. Contribute to a 401(k) and/or an IRA. Talk to a financial planner about investing some of your savings. If interest rates go down, consider refinancing your debts. Start the Discussion To start the discussion with your participants, ask some open-ended questions. Here are some examples to get you started: What happens to your goals if you experience significant life changes? What is the difference between saving money in a 401(k) or an IRA, versus saving money in a savings account? What is your plan or strategy for retirement? Continued on next page 15 2013 Freddie Mac CreditSmart Instructor s Guide Module 10: Planning for Your Future
Topic 4: Think Long-Term, Continued Start the Discussion (continued) Instructor note: Define the following terms Think Long-Term Term Individual Retirement Account (IRA) Interest Rate Definition A tax-deferred plan that can help build a retirement nest egg. Interest rates are commonly thought of as the cost of borrowing money. The interest rate is expressed as a percentage. The amount of interest that is paid each year is determined by multiplying the amount of the loan by the percentage. 16 2013 Freddie Mac CreditSmart Instructor s Guide Module 10: Planning for Your Future
Topic 5: Prepare for Life s Unexpected Challenges Overview This topic discusses ways to prepare for unexpected financial challenges. Time 10 minutes Prepare for Life s Unexpected Challenges The Basics Once you have investments (new home, stocks, etc.) you ll want a strategy to preserve your assets. Check your insurance coverage. Consider disability insurance. Update beneficiary designations and prepare a will. Organize financial records. Start the Discussion To start the discussion with your participants, ask some open-ended questions. Here are some examples to get you started: What steps can you take towards preserving your financial future? Prepare for Life s Unexpected Challenges 17 2013 Freddie Mac CreditSmart Instructor s Guide Module 10: Planning for Your Future Continued on next page
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Module Conclusion Module Summary Summarize this module by reviewing the key points below with your participants. Key points from Module 10:Planning for Your Future: Module10 Summary 19 2013 Freddie Mac CreditSmart Instructor s Guide Module 10: Planning for Your Future
Appendix A: Glossary Term Checking Account Credit Report Debt Individual Retirement Account (IRA) Interest Rate Savings Account Spending Plan Definition An account that lets you write checks to pay bills or to buy goods. The financial institution takes the money from your account and pays it to the person named on the check. The financial institution sends you a monthly record of the deposits made and the checks written. A credit report provides a history of your use of credit. Specifically, it's a file maintained by a credit reporting agency that contains information about a person, such as where the individual works and lives; information reported to the credit reporting agency by creditors regarding money borrowed and payments made; and public record information, such as whether the person has filed for bankruptcy. What is owed to a person or institution for obtaining merchandise or services without immediately paying for them. Usually, a debt is acquired through a loan or the use of credit. A tax-deferred plan that can help build a retirement nest egg. Interest rates are commonly thought of as the cost of borrowing money. The interest rate is expressed as a percentage. The amount of interest that is paid each year is determined by multiplying the amount of the loan by the percentage. An account where you keep money for safekeeping or as an investment that earns interest. A spending plan is an itemized list of all of one's expenses. Spending plans are tools commonly used to measure or gauge expenses against income. 20 2013 Freddie Mac CreditSmart Instructor s Guide Module 10: Planning for Your Future