When we get free of something, we have a desire to help others get that same freedom. I’ve found that to be true in my recovery from drug addiction/alcoholism, Christian walk, and debt freedom.
I’ve been helping women in recovery for years, but just recently starting teaching financial literacy to them. I did my first pilot course and am encouraged!
The Birth of Financial Literacy 101
I wrote on my blog that I was working on a financial literacy curriculum for women in recovery. Amazingly, a few requests came in from women running groups at local sober houses. The funny thing is that they didn’t even read my blog but simply knew my debt freedom story.
Sometimes when you put something out in the universe, it gets answered.
What better way to get motivated than to have a live session scheduled. So I scheduled our first three teaching sessions at a local women’s sober house and got to work on my curriculum.
Trial By Fire
I learn best by doing so while I prepared a PowerPoint that was used, the ladies really guided the course. They took me back to the basics with some of the questions they asked:
- How do I find out how much my debts are?
- I am not even sure who I still owe money to. How do I find out?
- What if I haven’t paid taxes in years?
It’s totally understandable as drug addiction/alcoholism can take a person so far down that they neglect all responsibilities. I personally was high functioning while in addiction and tried to maintain my responsibilities. I still surfaced with a lot of debt but I knew who I owed.
This first week reminded me that no one story is unique and if I’m going to be teaching to an array of women in recovery, I need to start at the very basics.
You can view my PowerPoint here.
The Steps of Financial Literacy 101
People in recovery are used to following steps and so I decided the best way to design a curriculum was to break it down into bite-size steps.
Step 1 – Dream!
I asked the ladies to take 5 minutes to think and write down some of their aspirations in life. Here are the questions I asked them to ponder and write on:
- What are your aspirations now that you are sober?
- Do you have career goals?
- What does living a life of purpose mean to you?
- In your eyes, what does financial success look like?
After they did this a few women volunteered their answers.
It’s always good to start with the goal in mind. If you know what you are working towards, it makes the journey, and the steps, more purposeful.
Step 2 – Identify Your Debt
If you don’t know what the problem is you cannot work on it. Here’s where we had to start with the very basics. I taught them to go here to obtain a free credit report. You’ll see from the requested future lessons, they want a live demonstration of this and a lesson on how to read a credit report.
As one is identifying their debt, I suggested they write down all their creditors, the balance of their debt and the associated interest rate.
Step 3 – Breathe
I recognize that looking at the problem head-on can be a lot to take in all at once. Additionally, it can be overwhelming. This is why I included this step to stop, breathe, and trust the process.
I talked about how if we acknowledge the problem we can now formulate a plan to tackle it. It is really the first step towards gaining freedom.
Step 4 – Order of Precedence
Here’s where we start to order the debts in a specific order. While I used the debt snowball to get out of debt, I’m now a fan of combining the debt snowball and the debt avalanche to pay off debts.
Regardless of interest rates, there are a few types of debts which must be placed at the top of the list always. Those are debts to the IRS and payday lenders (ugh).
- Payday Loans
- Any debts with a balance of $1,000 or less go next. Line them up from the smallest balance to largest.
- For debts with a balance greater than $1,000, you’ll line them up from the highest interest rate to smallest.
Step 5 – Income
The women in this particular sober house are not working initially. However, once they become three quarters, they are to obtain a job. We spent a little time talking about income.
Some of the ladies had jobs waiting for them and so those would be ready to work on their budget. Most would be finding a new job so we went onto step 6.
Step 6a – Employable Skills
In this first part of step 6, I had them list past jobs they’ve had and the skills acquired. I gave them an example from my own life. I waitressed for many years and found that the skills I developed were:
- Ability to prioritize
- Customer service skills
- Managing customer & colleague expectations
Step 6b – Training and Education
In this part of step 6, I had the ladies list any formal education and/or training they’ve received. Additionally, I reminded them it could include on the job training.
Step 7 – Budgets
Here is where things got fun! The woman running the group volunteered to bring her numbers so that we could set her up on a budget. So I was able to do a live budget with the ladies!
I have four budget templates that I’ve created on Google Sheets based on the typical pay periods:
If you use any of the above Google sheets, you’ll need to go to file –> make a copy –> and save yourself a copy so you can edit it.
Here is where I talked about using a basic checking account for paying bills, savings account for emergency funds, and cash envelopes for the rest. I think that utilizing cash envelopes when first employing a budget, is the easiest way to stay on track.
One of the ladies said that if she had cash envelopes in her purse she’d want to spend them all quickly. My suggestion was to keep them in a small safe at home and as you needed to use them, take them with you. However, I reminded them this is where the self-discipline comes in. When the money’s gone in an envelope, there is no more to spend so use it wisely.
What if there’s not enough money left at the end of the month when I do my budget?
This is also where I talked about the possibility of not having enough money left over at the end of the month to pay debts. In these instances, I reminded them to always take care of food, shelter, and water first. Next, they will need to call their creditors and explain why they are not yet able to pay them.
Additionally, I recommended that if they have any student loan debt and cannot pay it, they will need to call their student loan provider and apply for a deferment.
Communication with creditors is key when trying to work on your finances. Lastly, I advised them to never give a creditor access to their checking or savings account and to be firm when calling them as they may try to guilt them.
As I concluded my 3rd and final lesson, I asked them what else they would like to learn in the future. Here were their responses:
- Secured versus unsecured credit cards
- Calculating car payment and interest rates
- Truth & Lending
- How to use Microsoft Excel
- Building up credit
- How to pull your credit report
- How to read your credit report
I will be working on these lessons and will go back in the summer to teach them.
Before I could teach these ladies, I needed to share my story with them. After all why would they want to listen to me? Moreover, why would they trust me? Once they found out that I am just like them, they were interested in what I had to say.
These women want a fresh start. Additionally, they are looking for hope. It can be scary to look at a bunch of past debts; however, if they know there is a method to pay it off, it’s easier to swallow.
If sobriety is going to stick, a person has to know how to manage their lives and that includes their finances. I am eager to help provide the tools needed to women in recovery so they can find the same freedom I’ve found…