💵 Financial Literacy

1. Banking Basics

A bank keeps your money safe. Keeping cash at home is risky — it can be stolen or lost. A bank account also helps you pay bills, get paid from work, and build a money history.

There are two main types of accounts:

• Checking account: For daily money. Your paycheck goes in, and you pay bills and buy things from it. You get a debit card. It is easy to take money out.
• Savings account: For money you do not need right now. It earns a little extra money called interest. Use it for goals like emergencies or a car.

How to open an account:

• Go to a bank or credit union near you. Many banks have staff who speak French or other languages — ask.
• Bring ID. Usually you need a government photo ID (like a passport) and proof of address (like a utility bill or lease with your name).
• You usually need a Social Security Number (SSN). Some banks accept an ITIN instead. Ask the bank what they accept.
• You will need a small deposit to open the account, often $25–$100.

Direct deposit: This means your employer sends your pay straight to your bank account. It is free, safe, and faster than a paper check. Ask your employer for a direct deposit form. You will need your account number and the bank's routing number (both are on your checks or in your banking app).

2. Budgeting — The 50/30/20 Rule

A budget is a plan for your money. It tells your money where to go. Without a plan, money disappears and you do not know where it went.

The 50/30/20 rule is a simple plan:

• 50% for needs: rent, food, electricity, transportation, phone. Things you must pay.
• 30% for wants: eating out, clothes, entertainment. Things you like but can live without.
• 20% for savings and debt: emergency fund, paying off debt, saving for goals.

Example: if you earn $2,000 per month, that is $1,000 for needs, $600 for wants, and $400 for savings. You can adjust the numbers. The important thing is to spend less than you earn.

Monthly Budget Worksheet

Write your plan at the start of the month. At the end of the month, write what you really spent. Compare the two. This shows where your money goes.

3. Credit Scores Explained

A credit score is a number that shows how good you are at paying back borrowed money. Banks, landlords, and even employers look at it. In the U.S., a good credit score makes life easier: you can rent an apartment, get a car loan, and pay less interest.

Scores go from 300 to 850. Higher is better:

• 300–579: Poor
• 580–669: Fair
• 670–739: Good
• 740–799: Very good
• 800–850: Excellent

The 5 factors that decide your score:

1. Payment history (35%): Do you pay bills on time? Late payments hurt your score the most.
2. Amounts owed (30%): How much of your credit are you using? Using a small part is better than using all of it.
3. Length of credit history (15%): How long have you had credit? Longer is better.
4. New credit (10%): Opening many new accounts at once can lower your score.
5. Types of credit (10%): Having different kinds (like a card and a loan) can help a little.

How to build credit safely:

• Get a secured credit card. You give the bank a deposit (for example $200), and they give you a card with a $200 limit. Use it for small purchases and pay the full bill every month.
• Pay every bill on time — always. Set reminders on your phone.
• Use only a small part of your credit limit. If your limit is $200, try to spend less than $60.
• Do not close your first card. Keeping it open helps your history grow longer.
• Be patient. Building good credit takes months and years, not days.

4. Avoiding Debt

Debt means money you owe. Some debt is normal, but too much debt is dangerous. The biggest trap is credit card interest.

Credit card interest — explained simply: When you buy with a credit card and do not pay the full bill, the bank charges you extra money called interest. Credit card interest is very high — often 20% to 30% per year. Example: if you owe $1,000 and pay only a little each month, you can end up paying back $1,300 or more. The bank earns money from your debt.

Rules to stay safe:

• Pay your full credit card bill every month. If you cannot pay it in full, do not buy it.
• Never use a credit card for cash advances — the fees and interest are even higher.
• Make a budget (see section 2) so you do not spend more than you earn.

Payday loan warning: Payday loan stores lend you money until your next paycheck. They look easy, but they are a trap. Their fees equal interest of 300% to 400% per year or more. Many people borrow $300 and end up paying back $1,000. If you need money fast, try these first: ask your employer for an advance, ask family or community, check local charities or churches, or talk to a credit counselor. Avoid payday loans.

5. Sending Money Home Safely

Many people send money to family in Congo or other countries. This is called a remittance. Fees and exchange rates are different for each service, so compare before you send.

Common Ways to Send Money

* Approximate — compare before you send. Fees and rates change often.

Safety tips:

• Use only well-known companies. Never send money through a stranger or a random person on social media.
• Double-check the receiver's name and phone number before you send. A wrong number can mean lost money.
• Keep your receipt and tracking number until the person confirms they got the money.
• Be careful of scams: no real company asks you to send money to "win a prize" or "get a job."
• Compare the total cost: fee + exchange rate. A "free" transfer with a bad exchange rate can cost more.

6. Taxes Basics

Taxes are money you pay to the government from what you earn. In the U.S., most workers must file a tax return every year — a form that reports your income. Filing is the law, and it can also get you money back (a refund).

Why file:

• It is required by law if you earn above a certain amount.
• You may get a refund — money the government returns to you.
• A tax filing record helps with immigration cases, loans, and renting a home.

W-2: If you are an employee, your employer sends you a form called a W-2 every January. It shows how much you earned and how much tax was already taken from your pay. You need it to file your taxes. If you work for yourself, you report your own income.

Free help — IRS VITA: The IRS runs a free program called VITA (Volunteer Income Tax Assistance). Trained volunteers help people with low or moderate income file their taxes for free. Look for a VITA site near you each tax season (usually February to April).

ITIN: If you do not have a Social Security Number, you can ask the IRS for an ITIN (Individual Taxpayer Identification Number). It lets you file taxes and follow the law even without an SSN. This is general information, not legal advice — if you are unsure, ask a VITA volunteer or a trusted advisor.

7. Saving for Emergencies

An emergency fund is money saved for surprises: a car repair, a medical bill, losing a job. Without savings, one surprise can push you into debt. With savings, you stay in control.

Your goal: Save one month of expenses. Add up your rent, food, bills, and transportation for one month. That number is your first goal. Later, you can try for 3 months.

How to build it:

• Automatic transfers: Ask your bank to move a small amount (for example $25 or $50) from checking to savings every payday. You will not miss it, and it grows by itself.
• Start small. Even $10 per week is $520 in one year.
• Keep emergency money in a separate savings account. Do not touch it for shopping or wants.
• When you spend from it for a real emergency, refill it as soon as you can.
• Save first, spend later: move money to savings on payday, before you spend on other things.