Financial Literacy

Why Financial Literacy Matters

Reentry is self-directed. Classroom training is limited, and many people you meet will be indifferent to the outcomes you want. The day you come home, there is no meal schedule, no clothing issue, no assigned bed. Stability depends on a practical money plan—banking, a working budget, credit behavior you can sustain, and a careful approach to lenders. 

Financial literacy is not only personal; it demonstrates responsibility to probation, courts, employers, and family.

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Plan Early, While Inside

Start before release. Think beyond sentencing and custody and study what life actually costs. 

During my 26 years, I reverse-engineered the first year home, estimated living costs, and set clear targets. My own target was aggressive: enough on hand to cover setup costs and a full year without income, because employment with a felony can be unpredictable. That goal forced discipline—spending choices in custody, consistent saving, and a written budget I updated as I learned more. Think in terms of basics first—safe shelter, food, transportation, communications—and add layers from there. Put the numbers on paper and follow them.

I keep three promises: 

• I won’t lie to you; 
• I won’t ask you to do anything I didn’t do; and 
• I won’t charge you for the educational content at PrisonProfessors.org.

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Bank Accounts: Rebuild the Foundation

Banking restores essential functions—direct deposit, bill pay, and a place to rebuild payment history. Pick an institution that will work with you; community banks and credit unions often offer second-chance checking with lower fees. Bring the basics—valid ID, Social Security card, and proof of address—and replace anything missing as soon as you can. Open a checking account, set up direct deposit, and schedule payments for fixed obligations (rent, utilities, restitution, child support). Avoid high-fee workarounds like check-cashing and prepaid cards. Turn on text or email alerts for low balances and posted transactions, and keep a small cushion so one mistake doesn’t trigger overdrafts and returns. 

Remember to keep your Probation Officer apprised of your banking activity and obtain written authorization before opening any new accounts or credit cards. 

I came out of prison after 26 years with no banking history and a 0-0-0 credit score—as if I didn’t exist in the system. I sat with a banker and explained my situation plainly. I brought my documented record of preparation and made the case for how I would manage the account. The transparency and the record of preparation mattered; the banker was willing to help and opened the account. 

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Budget: A Map You Can Follow

A budget is a working document, not a speech. Build it from real numbers, then run it.

• List fixed items—rent, utilities, phone, transportation, restitution, child support.
• Plan variable items—food, hygiene, clothing, data plan, fuel.
• Choose a simple tool—a notebook, a basic spreadsheet, or a no-frills app. Use what you will maintain.
• Create an emergency line—even small, regular transfers add up and prevent high-cost borrowing.

Review weekly during the first months at home. When the budget holds up on paper and in practice, you can show a probation officer or prospective landlord a clean ledger that reflects accountability.

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Credit: Rebuild with Steady Behavior

Credit reflects conduct over time. Rebuild it with steady, documented behavior.

• Pull your reports from Equifax, Experian, and TransUnion (free annually). Read all three and note differences.
• Dispute inaccuracies through bureau procedures; keep copies of each submission and response.
• Pay on time—payment history carries the most weight. Automate recurring bills where possible.
• Use a secured card or a credit-builder loan from a credit union or community bank. Keep balances low and pay statements in full.
• Add positive data where available (on-time rent, utilities, or phone payments reported to the bureaus).
• Check your score quarterly and track the changes alongside payment history.

Remember: while on supervised release, do not open new credit, co-sign, request higher limits, or enter financing agreements without first obtaining written approval from your probation officer. Coordinate with your probation officer: provide a brief budget, purpose, terms, and how payments will be managed; keep copies of the request and any approval. This protects your progress and avoids technical violations. For approach and tone, see the earlier lesson on working with probation officers.

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Predatory Lending: Recognize the Traps

Payday loans, auto-title loans, and rent-to-own contracts present as quick solutions and behave as long-term drains. Effective annual rates often sit in triple digits, and rollover terms keep people in place for months or years.

Better options exist:

• Small-dollar programs at credit unions
• Nonprofit reentry funds and community lending circles
• Payment plans with providers that report on-time history

Read every contract. Note the APR, total repayment, fee schedule, and collateral risk. Walk away from terms you cannot explain in plain language to someone you trust.

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Strategic Practices That Matter

• Document everything. Keep receipts and digital copies for rent, utilities, restitution, fines, loan payments, and taxes. Organized proof helps with probation, licensing boards, lenders, and future disputes.
• Stack small wins. On-time streaks, low utilization, and a growing emergency fund signal stability.
• Take local classes. Community colleges, workforce boards, probation offices, and nonprofits run financial literacy courses on budgeting, credit, and taxes.
• Teach what you learn. Bring family into the routine so the household stabilizes together.
• Keep a one-page resume current. A factual summary of skills, training, and reliability helps with banks, landlords, and employers.

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Entrepreneurship and Cash Flow

A traditional job may not appear immediately. A side business or full-time self-employment can bridge income. Treat it professionally: define the product or service, document delivery timelines, price transparently, track revenue and expenses, save for taxes, and collect testimonials. Clean books are not optional; they are how you show stability to partners, lenders, and customers.

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Profiles: Make Your Record Visible

Use your Profile on PrisonProfessors.org to show financial discipline over time; a trusted supporter can help maintain it while you are inside.

I strongly discourage hiring a “prison consultant” with the idea that they’ll fix your problems. Their “advice” usually comes from limited experience with no substantive record of their work—and it shows. You can do this yourself. Be the CEO of your life, and lean on the free resources at PrisonProfessors.org. You know your facts better than anyone—recognize the challenge, build real financial literacy, and write the plan that fits your reality. For live Q&A, join Justin Paperny’s weekly webinars at WhiteCollarAdvice.com/Nonprofit.

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Key Takeaways

Financial stability after custody grows from specific actions: open a bank account, write a budget you can follow, rebuild credit with steady on-time history, and avoid high-cost products that derail cash flow. Documentation supports credibility with probation, courts, lenders, and employers. Small, consistent deposits create the buffer that prevents crisis borrowing. A simple portfolio—budget, bank statements, on-time streaks, and a current Profile—shows responsibility, not promises.

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Self-Directed Exercise

Publish a financial packet to your Profile:

• Biography — a 10–12 sentence update on why money stability matters in your first year home.
• Journals — four weekly entries documenting concrete steps: bank setup, budget finalized, bills paid, savings started, credit report pulled, dispute submitted.
• Book Report — pick a financial literacy title (budgeting, credit repair, consumer protection). Explain why you chose it, what you learned, and how it changes your plan this month.
• Release Plan — a 90-day money plan: income source, monthly budget, restitution schedule, emergency-fund target, secured card or credit-builder step.

Testimonials — one note from a mentor or supervisor and one from a family member who can speak to your consistency.