It's My Life – Am I Prepared?
“It’s My Life – Am I prepared?” learning module is designed for beginner and intermediate Indigenous learners who have or will receive a lump sum payment. The layout attached provides practical measures and promotes a positive impact of financial gain while lessening the adverse effects with tools and resources while creating opportunities for long-term Indigenous financial wellness.
The layout is designed to remind you that you may already have the basics, day-to-day, month-to-month financial planning skills. Over the years, financial institutes and other financial organizations have developed helpful financial resources and tools; however, very little information contains an Indigenous perspective. Over the years we have worked with various partners, including Prosper Canada, to help fill that gap. In November 2023, AFOA Canada and Helen Bobiwash released a short video series discussing lump sum payments, and how they impact Indigenous individuals.
The Learning Objectives for this video series are:
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- Identify ways that Indigenous people may acquire large amounts of money
- Suggest ways to manage and cope with various situations that might arise from receiving a lump sum payment: managing your social circle (family, friends and community); elder abuse; scams and sales people
- Plan the use of your money by identifying your goals and developing a financial wellness plan
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Access the Videos
Introduction | Unit 1 | Unit 2 | Worksheets
Below you will find some highlighted information on planning for financial wellness, along with tools and tips that you can work through at your own pace.
Introduction
Do you ever hear - why plan, plans never work out?
While we may feel that there is much truth to this statement, it is essential to understand that for a plan to succeed we need tools and resources and best practices to increase our success.
To prepare (this is not the final result, this is a plan for the possible outcomes).
Stop talking (Do IT!)
Listen – this it is one of the most important tools, if you are too busy thinking about your plan and what can go wrong, you cannot hear or learn what works.
Improvise – You have learned to do this as you made day-to-day decisions and lived experiences.
Review and repeat – go through your planned steps. Remember the power of success is repeating your steps until it’s a habit and you succeed.
Finally, now it’s time to prepare with simple and easy-to-understand action with a goal of Indigenous Financial Wellness.
Planning for your success: Remember to invest in yourself
Part of the process is to decide what you can do when you receive a large lump sum of money.
Let’s begin with the practical, sound advice:
• Pay down debt:
One of the best investments you can make is to invest in yourself by paying off high-interest debt now.
• Build an emergency fund:
Every household should have at least $1,000 saved in an easily accessed emergency fund.
• Save and invest:
Create a retirement plan; invest in your education, your children or grandchildren’s education; or buy a home.
Don’t forget about yourself in all of this. Treat yourself! It’s okay to indulge. In fact, doing so can keep you sane and happy without compromising your finances. If there is no room in your budget for indulgence, alter it so that you’re not spending as much on other expenses.
How to budget to treat yourself!
Our dreams are not all the same. If I had a lot of money, I would want ____. Think about and budget for your WANT, your indulgence. For some, the dream and want is new furniture, or a family vacation for you and your family, for others it may be a new car, and for others, it may be a piece of coveted jewelry. No matter the want, to purchase something you could only dream about, it is important to set and prioritize financial goals. This way you can better understand where you currently are and where you hope to be in the future so you can determine the ideal budget for your situation.
Once you look at your settlement and monthly income and overall expenses, you’ll discover how much you can allocate toward what you want while still staying on target to reach your goals. Financial experts recommend taking 5 to 10 percent of your settlement to treat yourself and have suggested a few budgeting methods to meet some ongoing indulgences once you have lived your “dream”:
• Pay yourself first: Calculate the monthly savings you need to reach your financial goals. Next, pay yourself first by automatically depositing that amount in a bank account directly from your paycheck. After you account for fixed costs like housing and transportation, you can use the remaining dollars toward your highest priority discretionary expenses. This method can ensure your habits properly align with your goals.
• Envelope method: Placing money into envelopes with different categories like groceries, gas, and indulgences is a great idea. Then, only spend the money you have in that envelope for that category every month. The envelope method can give you a sense of empowerment and allow you to allocate your funds based on your priorities.
Tips
Moving forward, don’t make quick decisions. Take a deep breath, it can be overwhelming. To help you make decisions and prioritize, you can self-assess.
1. Your Inner Life:
• Do you love and respect yourself?
• Do you feel good about how you live and who you are?
• What does your self-talk sound like? Is it helpful or hurtful?
2. Your Health:
• Does your mind, body and spirit feel full?
• How do you take care of your physical, emotional, and spiritual well-being?
3. Your Family Life:
• Do you have good times with your loved ones?
• Do you spend quality time connecting with family on a regular basis?
• Do you have sense of family and community?
4. Your Career:
• If you are employed, do you feel your job is fulfilling?
• Do you have a sense of purpose?
• Do you enjoy the contributions and service you make to the world through employment or volunteering?
5. Financial:
• Do you have the resources to meet your basic needs?
• Do you have the resources to enjoy other experiences and items / objects beyond your basic needs?
6. Your Circle of Support:
• Do you have a circle of family, friends and colleagues who are supportive?
7. Some Adventure:
• Do you make time to have fun and explore other adventures outside of day-to-day life?
• 10 % dreamed of doing
8. Your Impact (on your community and/or in your family):
• Do you have opportunities to help make the lives of others better?
• Do you volunteer or donate to a cause that is important to you?
01 - Your Money Goals
We live with the loon or loonie every day. The loon teaches us to pay attention to our dreams and hopes.
The loon is a unique Canadian symbol with its beautiful voice and markings.
The loon teaches us to pay attention to our dreams and hopes. Many of us would like to know more about the options with more money. Some of us can save regularly, and some feel like there is never enough money to get by, do what we would like or leftover to save. Goal setting is essential. Budgeting and saving can feel stressful and overwhelming without a goal and a plan.
To help you practice your goal setting and planning process, begin your journey with a tiny step. First, choose a goal and write it down. Now think about how you can start working towards this one goal.
Doing this will help you think about your goals. Setting goals is the first step in making a financial plan.
Think about why you would like to set a money goal. Asking yourself these questions can help you know.
My money goal is:
• I would like to reach this goal by this date:
• The help and resources I will need to reach this goal by this time are:
REMEMBER: Knowledge is power and knowing this, it is important to understand why goal setting is important. Goals setting:
• Identifies a purpose – helps you focus
• Motivates you
• It helps you to measure progress
• Holds you accountable
• Allows you to celebrate your success, pat yourself on the back!
Congratulations! You have taken the first step.
Did you know?
70%
of lottery winners have exhausted their funds after five years?
02 - Tracking Your Regular Income
The chickadee saves 60,000 seeds for the long winter. To remember where all its seeds are saved, its brain increases 30% in the fall. It teaches the importance of saving.
Many of us don’t have the chickadees’ brain power to track how we spend. This is why tools are important. Your income may differ if you are older, younger, or just plain young in spirit.
Employment Income
If you have a job that gives you a pay stub each time you are paid, it will give you a lot of information about your income.
• Gross pay is the amount of money you earned before any taxes or other deductions are taken away.
• Net pay is your “take-home” pay after the deductions.
• Deductions could include Employment Insurance (EI), Canada Pension Plan (CPP) contributions, taxes and other deductions, depending on your employment situation and status.
Other examples of income include Old Age Security, education allowance, student loan or social assistance.
A worksheet is available and is provided for you to create a budget. Calculate how much money you have regularly coming in. This will help you see the “big picture” of your income and other resources.
• Write down how much money you have coming in from all sources.
• Reflect on whether this is more or less than you thought it would be.
Knowing when you are going to have extra resources coming in can help you to plan your spending.
03 - Tracking Your Spending
The moose teaches the importance to adapt to changes in the environment. Despite its size it lives as comfortably in the forest as it does in the water.
Like the moose we can adapt to our environment, your existence is proof of this.
Let’s look at your weekly spending as we track your expenses. A simple first step is to think about your needs and your wants. A ‘need’ is something you can’t live without – food, a place to live, and transportation, for example. Needs could also include debts you must pay each month. A ‘want’ is something you would like to have but could actually live without. Sometimes wants can feel like needs, which makes it hard to let go of them. Needs and wants can be different for everyone, even for people in the same family. Figuring out which expenses are needs or wants can help you find money to save for your goal.
Needs and wants.
We all have needs.
A need is something you cannot live without (food, a place to live, transportation etc.).
We all have wants.
A want is something you would like to have but could actually live without.
Sometimes wants can feel like needs, which makes it hard to let go of them.
A trade-off to reduce the amount you spend monthly on wants and needs. Another way to satisfy a need or a want. For example, instead of purchasing take-out food, you can save money by making food at home.
Tracking our spending can help you see where your money is truly going.
It will also help you to compare your spending with your income. Shows what you owe each month and when payments are due. Helps you plan your spending.
It might help to look at:
• Bill statements
• Banking statements
• Receipts from shopping
If you don’t know how much you spend each month on little things, consider tracking your expenses in a notebook, or using an app to determine your monthly expenses.
Using your notebook write down your expenses for each week. You may have to estimate. Add up the total amounts for the month. This will also help form your budget.
Look back at your list. What are some of your reasons for buying wants? Are there any wants you would like to change?
04 - Tracking Your Bills
The turtle is a symbol of Mother Earth. The turtle teaches us that the land provides us with an endless supply of everything we need.
Our responsibility is to manage our resources and money carefully.
Like mother earth and the turtle that provides with a supply of everything we need. It also a reminder of our responsibility to manage our resources and money carefully. To help you, lets tracking your bills.
Knowing what bills, you have and when they are due can help you plan your spending.
Make a list of all the bills you pay each month. You may need to organize your statements. You may receive your bill statements on paper or online.
Record the dates when they are due in the calendar provided.
Possible bill payments
• Hydro/power, heat
• Internet, telephone, cable TV
• Credit card payments
• Car payments
• Rent or mortgage payments
Also consider:
• Monthly payments for furniture or appliances
• Monthly memberships fees or subscriptions
• Insurance payments
• Debt payments
• Automatic payments or savings
• Child support payments
TIP: It can help if you put your statements and receipts in an envelope or file folder labelled for each type of bill.
Add them to your calendar, the one hanging on your wall or in the app on your phone or computer.
Doing this activity helps to remind you when your bills are due, as well as how much money you will need to pay them.
Think about how the timing of the bills are due, matches up with the times you receive some of your income.
Saving tool: Finding money
• Using your notebook, list some of the things that you buy often. Note how many times you buy them in a month.
• Write down how much they usually cost (“average price”).
• Then figure out how much you spend on each thing in a month.
• This will help you to see if there are places where you spend more money than you realized or wanted to.
• Then think about how you could reduce that spending and save toward your goals.
If you know about these kinds of expenses in advance, you can start planning for how you will pay for them and save money.
05 - Monthly Budgeting
When you make a budget, you give yourself a clear picture of your financial situation.
When you make a budget, you give yourself a clear picture of your financial situation.
A budget can help you to take control of your finances. Once you know what you can afford, you can focus on setting priorities for spending and saving for your goals.
Create your own budget.
Fill in each of the monthly budget lines (income and expenses) that apply to your character.
See if the budget balances.
Steps to Budgeting
Step 1: Income -How much money is coming in and from where?
Consider all sources (wages, government benefits, child support, inheritance, gifts, etc.)
If income varies, add up all income and divide by 12 for average monthly income
Or take the lowest monthly income and use that as your monthly amount
Step 2: Expenses -How much is going out and to what?
Include all categories, including fixed and variable
Include seasonal or annual expenses
Keep a log, look at and track your online account (if possible), review any credit card statement, etc.
Be realistic!
Please note that there are different types of expenses:
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- Fixed expenses: These are expenses that are the same each month: housing, transit, child support/alimony.
- Variable expenses: These expenses are different amounts each month; things that can change and can be tracked in your spending habits; things that could be reduced or modified.
- Annual expenses: Once-a-year costs that are unusual: school fees, holiday or birthday gifts, dentist bills.
- Emergency expenses: Unpredicted expenditures: car repair, new computer, work tools.
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Step 3: Calculate and review–What’s the verdict?
Deficit (not enough money or negative balance) or Surplus (money leftover or a positive balance)?
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- If surplus –make sure it’s realistic! Then think about saving goals, short & long term
- If deficit –options include cutting expenses, increasing income, or finding other ways to meet needs (trade-offs!)
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How to review a budget that does not balance
If a budget does not balance, there are two main things you can do.
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- Increase your income.
- Decrease your expenses.
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Review your list of needs and wants.
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- List some of the things that you buy often.
- Write down how much they usually cost (average price) and how often you buy them.
- Figure out how much you usually spend on each thing in a month.
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Frogs appear fragile, but they can survive extreme environments by conserving energy instead of spending it.
06 - Setting a Savings Goal
Setting a Savings Goal
Savings goals say something about what is important to you and your family.
Setting a savings goal means you have decided how much money you can put away and what you are going to save for.
It may mean you have to cut some expenses so you can save each week.
Many of us struggle with setting goals. It is something you practice by “starting small” and then moving on to bigger goals.
Below are possible reasons to save:
Emergency savings – Unexpected expenses can and will happen.
Emergency savings can help you avoid using credit cards or high-interest loans.
Starting to build up emergency savings may take time, but you will be glad it is there when you need it
Homeownership or home needs
Your long-term goal may involve buying or building a home, finding a better rental, or improving your living space.
Saving for this kind of goal will require saving large amounts. Setting up automatic payments makes sense for these goals too.
Education savings
Putting aside money for your children’s education can start as soon as they are born or at any time.
The Registered Education Savings Plan (RESP) helps you to save for your child’s education.
Some of the money you put in is matched by savings grants from the government.
For more information on the Canada Learning Bond and how to open a Registered Education Plan visit MySmartFuture.
Retirement planning
Planning for retirement helps you achieve financial health and wellness for you and your family in the long term.
You will most likely need personal savings in addition to any public benefit or employer pension you receive.
There are different savings plans you can use, including:
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- Tax-Free Savings Account (TFSA)
- Registered Retirement Savings Plan (RRSP)
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Congratulations, you've completed the module!
You got this far. Would you like to test your knowledge? If so, complete the short quiz below.
If not, pat yourself on the back you did a FANTASTIC job. 🙂
Resources
This is a full list of the worksheets throughout the It’s My Life – Am I Prepared? learning module, available for download: