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Fresh Start

We all look forward to being on our own. But we don’t always know how to handle the added responsibilities such as getting a car, renting, establishing credit, paying bills, and having something left over for savings and fun. Unfortunately, these aren’t things we always learn in school or at home. At ESL we’re here to equip you with the knowledge and ability to handle these responsibilities and succeed on your path to financial freedom.

Things to know:

  • It may cost more to cash your paycheck if you don’t have a bank account.
  • Know your monthly expenses like rent, healthcare, food, and more.
  • When it comes to your finances, failing to plan is planning to fail.
  • A secured credit card is a great way to establish your credit.

Learn about the ESL Visa Secured Credit Card.

  • Know the Basics

    There will be many things you need to learn about money throughout life. So let’s cut to the chase and talk about the top things you need to know now:

    Things to Know
    Helpful Tools
    TopicYour paycheck
    • A checking account with direct deposit is the fastest and safest way to access your pay.
    • It may cost more to cash your paycheck if you don’t have a bank account.
    • Net pay means the amount you take home after taxes, etc. (For example: $10 per hour x 20 hours = $200, but after taxes, etc., you might take home $170.)
    • “Withholding” is the money your employer takes from your paycheck to pay your taxes. If you don’t have enough withheld, you may owe taxes at the end of the year.
    Helpful Tools
    TopicHave a checking account
    Things to Know
    • It will be free to cash your paycheck.
    • It is much safer than cash.
    • It's important to monitor your balance online to keep from spending more than you have—known as an overdraft which will cost you a penalty fee.
    • You have to keep enough money in the account to cover your transactions.
    • Having overdraft protection can shield you from being charged high fees and having your account closed.
    Helpful Tools
    TopicSaving for your goals in a savings account
    Things to Know
    • First, figure out how much it's going to take to reach your goal.
    • Second, figure out how long you have to save.
    • Third, divide the amount by the length of time.
    • Fourth, figure out how much you would need to save each time you get paid.
    • Fifth, open up a savings account and use direct deposit.
    Helpful Tools
  • Plan Your Finances

    There’s a famous expression that says “Failing to plan is planning to fail.” When it comes to your finances, this is a plain truth. The root of most financial problems comes down to a failure to plan. For many this results in challenges such as high credit card debt or spending more than what they earn. How can you avoid falling into these same traps? One of the best ways to plan your finances successfully is to budget. Here’s how it’s done:

    • Write down what your income and expenses are now.
      This Budget Worksheet helps organize everything, or make a spreadsheet on your computer.
    • Quick tip: Don’t forget to include expenses that happen occasionally like clothes and insurance.
    • Track your expenses by writing them down for one month.
    • A Tracking Worksheet is helpful. You can also use online and mobile banking to track expenses.
    • Quick tip: Tracking is important because it helps you remember everything and create accuracy in your plan.
    • Total up your expenses and subtract them from your income.
    • Quick tip: If you’re spending more than you’re making, take a look at the things you can easily reduce like snacks, lunches, coffee, etc.
    • Write down the dates when you need to pay your bills and expenses, and when you receive your income.
    • The Payment Calendar Spreadsheet is useful to stay on track.
    • Quick tip: Knowing when you get paid compared to when you have to pay expenses will help you figure out when you need to reserve funds to pay bills each month.
    • Figure out how much you can save and work towards a specific goal – vacation, car, special class. etc.
      Use the Figuring Out Your Goals Worksheet to make your plan.
    • Quick tip: Have a clear time frame for your goal. Knowing when you’ll actually achieve what you want will give you motivation.

    For more information about planning your finances when you’re starting out, review the Road to Financial Independence Guide.

  • Establish Your Credit

    You’ve probably heard quite a bit about credit reports and scores on the radio, TV, or Internet, but haven’t actually heard how it all works. The first thing to know is that establishing your credit is extremely important when you start off financially. Without good credit, it’s difficult to rent an apartment, get a car loan, get a cell phone, or obtain car insurance at reasonable price.

    In the financial world, a credit report is used in the same way a college uses your high school transcript. If your transcript shows you handled yourself well in high school, you’re more likely to be accepted into the college to which you apply. When it comes to finances, the people you apply to—banks, landlords, creditors—want to see that you have a history of handling things well before they trust you with their money. Essentially, they want to see two main things. First, that you don’t owe a lot of money, and second that you always pay people back.

    Here are the important things to do to establish your credit the right way:

    • Find a way to establish on-time payment history with money you borrow.
      • Consider this: A secured credit card is an easy way to get started. To get one, you make a security deposit with a bank or credit union. Since they have your deposit to fall back on, your credit history isn’t considered heavily. Learn about the ESL Visa Secured Credit Card.
    • Always pay all your bills on time.
      • Consider this: Normally the things reported on your credit report are from loans, but anything, such as unpaid medical bills, can wind up on your credit report if they are unpaid and sent to collections. Use the Payment Calendar Spreadsheet to stay on track.)
    • Don’t spend more on credit cards than you can pay in full each month.
      • Consider this:
    Paying the minimum
    Paying more than the minimum
    Paying the full balance
    Balance =
    Paying the minimum$2,500
    Paying more than the minimum$2,500
    Paying the full balance$100
    Payment amount =
    Paying the minimum$100
    Paying more than the minimum$250
    Paying the full balance$100
    Total time =
    Paying the minimum32 months
    Paying more than the minimum11 months
    Paying the full balance1 month
    Total paid =
    Paying the minimum$3,261
    Paying more than the minimum$2,758
    Paying the full balance$100


    For more in-depth information and help with basic terms regarding your credit, read Focus on Finances: Preparing for Your Future.