Financial Basics
There are certain basic financial topics that all adults will find helpful as they make their way through life. The information covered here, along with that presented in the Building Native Communities curriculum, will give your students a solid foundation in managing money wisely. With this knowledge, they can enhance their lives and strengthen their communities.
Living Within Our Means
Integral to Native culture are the notions of planning accordingly, conserving resources, and not being wasteful. If we equate these examples with money, it may best be explained as “living within our means.” That means trying to spend only what is needed for the necessities of daily life.
The most important part of living within our means is not relying on credit to pay for everyday expenses. Of course, your participants, like most people, probably can’t buy a house or a car without some type of loan, but they can choose to live so they don’t have to use credit to buy such things as food, clothing, and other normal expenses.
Remind your students that using credit for these items is like getting a bank loan to buy a pair of new high-priced athletic shoes. No one would ever consider getting such a loan, but putting the expense on a credit card amounts to the same thing. Your participants will have to pay the cost of the item plus hefty interest charges unless they pay off the charge in full when the credit-card bill arrives. Over time, they may end up paying long after the shoes are worn out and thrown away.
Teach your participants the value of living within their means. This way, they are able to afford the things they need without going into debt or borrowing money to pay for them. This notion is important for your participants because, without it, no matter how much money they make, they may not have much wealth to show for it. There’s a difference between wealth and high income. Wealth, in the form of money set aside, gives people some security and hope for a stable future, while a high income (if it’s spent readily) results in lots of material possessions that only decrease in value.
Living within their means will help your participants to attain their goals. By spending less on everyday expenses, they’ll have more to put aside toward their goals and dreams for the future.
To help your participants learn this concept, share the Twenty-Two Spending Tips worksheet with them.
Exploring Needs Versus Wants
In the circle of life, the big things don’t change. The sun rises and sets, the moon comes full and wanes, and the seasons cycle. It has always been this way. We, too, still need the basic things that our ancestors needed: food, shelter, clothing, and some form of transportation.
Today, however, we are all inundated with a way of life that is based on consuming, rather than on being self-sufficient.
Therefore, it’s not surprising if some of your participants may have trouble distinguishing between wants and needs. So it’s important to present information on learning the difference between a want and a need. With this knowledge, your participants can make purchasing decisions that will help them stretch their budgets and develop a stable future.
So, what is the difference between a want and a need?
Needs are the things we must have to survive and live as an individual or family in our community. These include food, clothes, a place to live, and often some sort of transportation. Wants, on the other hand, aren’t essential to survival, and might include the latest fashions, expensive food, and a new vehicle.
To help your participants distinguish between wants and needs, share this:
it’s possible to delay the purchase, substitute a less expensive item, or use something already owned.
the purchase is for something needed to survive.
Knowing the difference between wants and needs puts your participants in control of their purchases. It also helps them:
- set spending priorities
- make wise choices about spending
- get the most value for their money
- save money to reach a goal
The Wants and Needs worksheet provides your participants with several examples of wants and needs.
Establishing Financial Priorities
Just as tasks come in a certain logical order when planting a crop or building a house, there is a logical order to handling finances. Some expenses, such as housing and food, should always be paid first. This helps ensure that your participants have a place to live and food to eat. While it can be tempting to spend money on some of the wants before the needs, paying bills in a certain order helps maintain a family’s security.
In addition to paying bills in the correct order, it’s also important for your participants to know when bills are due so they can be paid on time. This will help your participants avoid costly and unnecessary late charges. These late payments are also noted on their credit scores, and can affect their ability to qualify for favorable loan rates.
The Family Financial Calendar can help your participants monitor and anticipate when their bills are due, helping ensure that they pay on time.
Setting Goals
Without goals in life, we don’t have much incentive for the future. Goals help us get up in the morning, excited about the new day and the opportunity to work toward our dreams.
Goals can be centered on the individual, the family, the extended family, or the community, and can be oriented around an activity (something to do) or money (something to save for). In addition, goals are either short-term, medium-term, or long-term.
Short-term goals are those that can be achieved within the next three months. Some examples might be:
- Pay bills on time.
- Exercise three times a week.
- Return to that favorite skill, hobby, or pastime.
- Start saving money to buy a car.
Medium-term goals are those that can be achieved within the next year. Some examples might be:
- Pay off some credit-card debt.
- Participate in a local fun run.
- Learn about mutual funds and other places to safely invest money.
- Start saving money for an emergency fund.
Long-term goals are those that can be achieved within the next five years. Some examples might be:
- Pay off all credit-card debt.
- Get additional education or training.
- Buy a home.
- Start a business, perhaps based on that favorite skill, hobby, or pastime.
What goals do your participants have? Use the Defining My Goals worksheet to get them started, and actively encourage them to think about their goals and dreams. Encourage them to dream big!
Once they’ve identified their goals, you can help them create achievable goals by showing them how to break each goal into smaller pieces. Use the Creating SMART Goals worksheet to help them with this process. SMART goals are: Specific, Measurable, Achievable, Results-oriented, and Trackable. SMART goals are broken down into a sequence of achievable smaller goals, which lets your participants see that the larger goal is achievable with ongoing commitment and discipline.
The concept of SMART goals can be used with all goals, small to large, short term to long term. Being able to break goals into defined phases allows your participants to see that it’s possible to attain nearly anything they set their minds to.
This approach also helps your participants evaluate priorities. They’ll examine whether it’s worth spending money on an expensive meal, for example, rather than saving it, so they can use it to help meet one of their goals. SMART goals can help your participants look at the long-term benefits of saving money and realizing their dreams.
After they’ve identified their SMART goals, your participants can use the Reaching My Goals worksheet to further define the steps they’ll use to make their dreams reality.
Employment and Career Development
For generations, work that is planned, delegated, and productive has been a cornerstone of Native communities and lifeways. Whatever needed to be done to ensure the economic security, safety, and comfort of the community was shared among its members. Working toward a common goal united its people and strengthened the community’s bonds.
Today, working may take on different appearances, but it’s as vital as ever. A stable job gives pride to all of us and allows us to give back to our community. In addition, a good income allows us to follow our dreams and achieve goals—particularly goals that affect the whole family.
However, there’s a difference between having a job and having a future. That’s why it’s important to encourage your participants to look beyond the first paycheck and envision making a career for themselves. In some Native communities, this is often hard to envision with the difficult economies found in some areas. If this is the case, some of your students may find the topic of “career” hard to imagine without leaving their community or the reservation. It is important to create a strong economy and stability locally, and your students can be a part of that transition with just better financial management and belief in the local economy.
No matter what their interests or talents, your participants can create a life-long career around the things they love doing. Here are some tips your participants can use to find a job that creates a future.
Exploring Jobs and Finding a Career
What do your participants want to do with their lives? How can they put their talents and interests to work for the benefit of themselves and their community? Can they create a niche within the present tribal government or business structure? Can they develop a business to provide income for themselves and for employees, and to develop a mindset of individual entrepreneurship in the community?
For many of your students, they may need to help “make” a career for themselves (and others) by being innovative within the tribal system or as an individual business owner. There are programs and organizations on many reservations already tackling this idea of building (or rebuilding) local economies and helping create lasting careers for the local people. If this is of interest to your students, they should seek out the available resources through organizations like a Tribal Business Information Center (TBIC), tribal college or university, a Native CDFI, the tribal economic development department, the Small Business Administration (SBA) or other service providers.
Are some of your participants interested in jobs that just don’t exist on the reservation (and might not ever), so they want to move off the reservation? If so, they may first need to find an entry-level position in the industry they’re interested in. Then, they can apply their diligence and work ethic to taking on more responsibilities, gaining more experience, and getting promoted to higher positions. They can also seek out Native-owned businesses and Native nonprofits working on a local, regional, or national level if they still want to be a part of the greater Native circle and they should be encouraged to do so if it fits with their career ideas.
No matter where or what kind of organization or position your students might pursue, for your participants seeking jobs that require working for others, the Job Application Worksheet provides the information they’ll need to gather when applying for positions. Many potential employers on and off the reservation require resumes to be submitted by job applicants, and the Traditional and Skills resumes give examples of the information employers want to see on these documents.
Another important skill is doing well in the job interview. This potentially intimidating process can be made a bit less ominous when your participants know what to expect. The Handling Interviews worksheet can help. Finally, once your participants have landed that great new job, the New Job Calendar and Tips for a Successful Career can help them look forward to a bright future.
Do some of your participants want to sell their artwork or a specialized product? They could try to sell it on their own, or they could start a cooperative with other artists and producers in the community. With their shared experience, they can try marketing their products and art pieces to catalogs, or find other ways to increase the visibility of their goods.
If your participants are more interested in starting their own businesses, see the Entrepreneurship/Small Business Ownership section of this site and check out the Native entrepreneurship reports from First Nations, CFED, and others. This is a growing movement within Native communities and determined students might just be successful in “making” that career for themselves and others.
Paycheck Primer
If you think back to your first paycheck, you may remember viewing it with pride, and maybe with some confusion. While you knew you’d be earning a certain hourly rate, maybe you didn’t know that a substantial amount of money would be taken out for taxes and other expenses.
If your participants are self-employed, they’ll not be familiar with a paycheck from an employer. Depending on their age, experience, and location, the participants in your educational program looking for a job may also not be familiar with a paycheck stub.
With the Sample Paycheck Stub, you can show them the difference between gross and net pay. Your participants will see that gross income is the amount they earn, but that net pay is what they actually take home after income tax withholding, insurance premiums, and possibly other expenses have been deducted from gross pay.
For more information on tax benefits available to your participants, including Earned Income Tax Credit and Child and Dependent Care Credit, see the Tax Issues section of this site. |
