Digital money coaching - Etude Five Guidance and resource bank

Transcription

1 Digital money coaching - Etude Five Guidance and resource bank 2016 Citizens Advice Digital Money Coaching Etude Five/Oct16/v1

2 Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, Citizens Advice assumes no responsibility. The user of the information agrees that the information is subject to change without notice. To the extent permitted by law, Citizens Advice excludes all liability for any claim, loss, demands or damages of any kind whatsoever (whether such claims, loss, demands or damages were foreseeable, known or otherwise) arising out of or in connection with the drafting, accuracy and/or its interpretation, including without limitation, indirect or consequential loss or damage and whether arising in tort (including negligence), contract or otherwise. Copyright 2015 Citizens Advice All rights reserved. Any reproduction of part or all of the contents in any form is prohibited except with the express written permission of Citizens Advice. Citizens Advice is an operating name of the National Association of Citizens Advice Bureaux, Charity registration number , VAT number , Company Limited by Guarantee, Registered number England. Registered office: Citizens Advice, 3 rd Floor North, 200 Aldersgate, London, EC1A 4HD 2016 Citizens Advice Digital Money Coaching Etude Five/Oct16/v1

3 Contents Etude Map Critical activities Important activities Optional activities Extra credits Action plan Etude summary At the moment, these resources do not contain page numbers. This is a deliberate decision due to the formatting process used to put together these resources, but page numbers may be added at a later date. Advisers should use the Etude map to navigate this resource, or alternatively use the resources available in the financial skills section of Citizens Advice where they are deconstructed and available as individual downloads Citizens Advice Digital Money Coaching Etude Five/Oct16/v1

4 Etude Map Etude Five 1 Numeracy 2 Savings calculator 3 Salary calculator 4 Budgeting tools 5 Credit card tools 6 Cutback calculators 7 Loan calculators 8 Baby costs tool 9 Budgeting apps 10 Credit reports 11 Credit ratings 12 Online lenders 13 Separation tool

5 Critical activities Critical activities are those activities that underpin all the other areas that follow them. Another way to look at this is that the critical areas in this Etude are ones that clients simply have to understand before they will be in a position to go into the later activities in this Etude. Advisers may find that clients that benefit from these activities will also benefit from other critical activities from other Etudes in the Digital Money Coaching section of our resources. Advisers can use their own discretion to pick and choose whatever activities they fell will help support their individual client Citizens Advice Digital Money Coaching Etude Five/Oct16/v1

6 Numeracy AIC 20 - R Establishing the client s level of numeracy is a very delicate and difficult process. At every stage, the adviser needs to use their own discretion and judgment to decide what guidance is most useful. The charity National Numeracy is the best source on numeracy-related information. Their National Numeracy Challenge is especially useful in this regard. It can acclimatise clients to using online tools and tests, and is suitable for mobiles and smartphones. It is also bite-size, allowing for a pick-up-and-play methodology in the clients own time. The Tinder Foundation provides an excellent learning service called Learn My Way, which is developed in conjunction with the BBC. To get to it, follow these steps: o Go to the Learn My Way website. o Click the Get Ready button to improve English or numeracy. o Select to improve numeracy. o The resources are thorough and often very interactive: give them a try with your clients. Momentum encourage the client to play the challenge in their own time, improving their level. If this topic was of use, why not try: Etude five - savings calculator Etude five - budgeting tools Etude five - budgeting apps

7 Savings calculator AIC 20 N R The savings calculator is on the Money Advice Service website Momentum can the client find this tool themselves? It is a cross between a basic app and a calculator; if the client chooses how much they want to save up (or alternatively, when they need it by) they can go down two similar routes to get an idea of how much to save for how long. Key step encourage the client to go back into the tool and try different figures. The tool should offer guidance on this. Although a brief exercise, the client can use it to highlight other supportive skills, such as: Navigating to a particular online tool from an open search engine. Navigating back and forth within a website tool. Possibly printing out the results. Potentially following recommended links. If this topic was of use, why not try: Etude two - Money Health Check Etude five - numeracy Etude six - banking apps

8 Salary calculator AIC 20 B R is a single specific website that is highly recommended and hosts a selection of excellent tools. Momentum can the client find this tool themselves? It contains the following: The take-home calculator this tells you what your salary is worth on a monthly, weekly or daily basis. Discover what a difference a few hours overtime will make. The hourly wage calculator - don't know what your salary is, just the hourly rate? This tool can do all the sums for you. The required salary calculator - wondering what salary will support the lifestyle you want? Provide the monthly take-home you want, and the tool will tell you what you need to earn. Pro-rata salary calculator useful when changing the hours you work, or looking at a job that has a pro-rata salary. Two salary comparison calculator - thinking of changing jobs, or going for a promotion? Compare two salaries side-by-side to see how the difference in take home pay breaks down. The mortgage repayment calculator and the debt consolidation calculator are both good but alternatives exist on many other sites. Key step encourage the client to go back into the tool and try different figures. The tool should offer guidance on this. If this topic was of use, why not try: Etude two - Money Health Check Etude five - budgeting tools Etude six - comparing banks

9 Important activities Important activities are those activities that build on the critical activities that precede them, and form the core of most clients activities in this topic. Another way to look at this is that the important areas in this Etude are ones that clients are likely to use most often, and are the most common digital areas used for financial capability in this topic. Advisers may find that clients that benefit from these activities will also benefit from other important activities from other Etudes in the Digital Money Coaching section of our resources. Advisers can use their own discretion to pick and choose whatever activities they fell will help support their individual client Citizens Advice Digital Money Coaching Etude Five/Oct16/v1

10 Budgeting tools AIC 20 B R There are two budgeting tools we would recommend that the clients try. The first option is on the Citizens Advice website, and is called our own budgeting tool. It is very comprehensive, but can take over 30 minutes to complete. Advisers should recommend this in the first instance. The second is on the Money Advice Service website, called the budget planner. This is actually a portal to two different types of budgeting tool, both of which are less detailed than the Citizens Advice one. The shorter option, on the left, is more suitable for those clients who are still a little digitally unsure, or those who prefer to use tablets/smartphones. The more detailed option, on the right, is more suitable for clients who want a more comprehensive budget. The advisor will need to guide the client through use of the various tools. Summaries can be printed or saved, and should be used to inform actions or further sessions. If this topic was of use, why not try: Etude five - loan calculators Etude six - banking apps

11 Credit card tools AIC 20 C R The credit card calculator can be found on the Money Advice Service website. Key step ensure the client can find this website through a search engine, and then navigate to the tool. The calculator is very simple, and the client should hopefully bring their own credit card statements to add accurate information. The calculator results are interactive; the adviser should encourage the client to play about with the slider, and discuss what the changes highlight. The Citizens Advice website hosts the same credit card calculator in partnership with MAS. Momentum ask the client to find other online calculators and then show them to their adviser at a later session for further discussion. If this topic was of use, why not try Etude five - loan calculators Etude six - online banking

12 Cutback calculators AIC 20 B R There are several cutback calculators we would recommend for use with a client. The first is on the Money Advice Service website. Key step ensure the client can find this website through a search engine, and then navigate to the tool. The cutback calculator is an extremely simple tool. It does a simple calculation for a client, and then offers some signposting to further information. Useful for clients who are digitally unsure and need practise navigating to and within websites. Useful on mobile devices, as it uses dropdowns exclusively. (NOTE this is still available via a Google search, but no longer linked on the MAS website. The new alternative on the MAS site is the less effective Quick Cash calculator). The Money Saving Expert website has the Demotivator tool. This is a bit of a garish, but very effective, tool with a summary that can be printed out, and with signposts to the MSE budget planner too. Momentum ask the client to pick one or two small changes they want to make as a result of this, and then monitor their progress for discussion with the advisor at their next session. If this topic was of use, why not try: Etude three - paperwork Etude six - online banking

13 Loan calculator AIC 20 C R The loan calculator can be found on the Money Advice Service website. Key step ensure the client can find this website through a search engine, and then navigate to the tool. The calculator is very simple, and the client should hopefully use their own situations to add accurate information. The calculator results are interactive; the adviser should encourage the client to play about with the slider, and discuss what the changes highlight. Momentum ask the client to find other online calculators and then show them to the adviser at a later session for further discussion. If this topic was of use, why not try: Etude four - benefits calculator Etude six - online banking

14 Baby costs tool AIC 20 B R The baby costs calculator can be found on the Money Advice Service website. Key step ensure the client can find this website through a search engine, and then navigate to the tool. The calculator is very simple; the adviser should be aware however that this tool is only of value if it has specific relevance to a client s life. If they have no children and are not expecting to start a family soon, this tool is not recommended. The calculator is completely interactive; the adviser should encourage the client to play about with the slider, and discuss what the changes highlight. The adviser may help the client print off results, or follow recommended links through the website. Momentum ask the client to find other similar online tools and then show them to the adviser at a later session for further discussion. If this topic was of use, why not try: Etude four - benefits calculator Etude five - loan calculator Etude six - online banking

15 Budgeting apps AIC 20 B R There are several budgeting apps available online; they can be downloaded for free on a client s smartphone. However, they vary in quality and features. The following ones are recommended. 1 Wally is on ios only. It s very popular, and lets you build custom budgeting categories whilst also setting daily reminders to update fixed and variable spending. You can also just take photos of your receipts - the app reads them and uploads them, and it also uses the phone GPS to work out where you shop. 2 Spendee is on ios and Android. It s extremely simple; it just records income and expenditure and you can t really customise anything. 3 PageOnce is on ios and Android. You can pay all your bills on the go and the automatic organiser and money tracker also provides real-time alerts. 4 Toshl Finance is on ios and Android. It s an average, solid budgeting app. It has quirky graphics some may like, but does need you to start a free Toshl.com account to get rolling. Momentum ask the client to find other similar budgeting apps and then show them to the adviser at a later session for further discussion. Warning Mint is on ios and Android, and is the world s most popular budgeting app. However, UK banks prohibit its use, so it can t be recommended to clients. If this topic was of use, why not try: Etude three - benefits calculator Etude four - loan calculator Etude five - online banking

16 Optional activities Optional activities are those activities that form the final goals that advisers should aim for clients for reach. Another way to look at this is that the optional areas in this Etude are non-essential and aspirational for clients. If they can eventually get to the point that they can access these digital services and activities, they should by definition also have become confident with the all the preceding critical and important skills in this Etude. Advisers may find that clients that benefit from these activities will also benefit from other optional activities from other Etudes in the Digital Money Coaching section of our resources. Advisers can use their own discretion to pick and choose whatever activities they fell will help support their individual client Citizens Advice Digital Money Coaching Etude Five/Oct16/v1

17 Credit reports AIC 20 C R The adviser needs to ensure that the client understands that a credit check is when someone checks their credit rating and sees their credit score. The client also needs to understand the basic things that can affect their credit report, such as loans and electoral registration. There are three major credit check agencies in the UK: Experian Equifax Callcredit. Momentum can the client find these sites themselves via a search engine? The client may wish to first find information from a site such as the Citizens Advice website or Money Saving Expert; this is to be encouraged. The adviser can help them save and print this information. The adviser should guide them through the standard steps to check a credit report; each of the websites has a demonstration tool that the adviser and client can work through together. Depending on the client s need, the adviser may wish to offer the Noddle or Clearscore online checking services. Key step ensure the client understands that the different agencies do not always reflect the same information. A good rating with one does not preclude a bad rating with another, and it s difficult to know which agency a lender approaches for their report. If this topic was of use, why not try: Etude one - electoral registration: The credit topic in our Financial Capability topics online (we have a template credit report)

18 Credit ratings AIC 20 C R The client should now be encouraged to think of ways to improve their credit rating. The adviser can encourage them to look for these online, but should discuss each of them in detail with the client to ensure understanding. A possible list of tips follows, but is not exhaustive. Check files annually or before any major application. Use a credit-builder card to build a new improved history. Register to vote. If ineligible to vote in the UK, clients can add proof of residency. Never miss or be late on any credit repayments. Don't let a partner/housemate s credit score have an impact. If client separates, ensure they are not financially linked. Check addresses on old accounts. Always check credit files after rejection. Don't withdraw cash on credit cards. Use payday loans with extreme care. Ask why they were rejected. Never pay for a credit repair company. Cancel unused credit and store cards. Paying for insurance monthly will affect a credit score. Momentum does the client know how to research these points online? If this topic was of use, why not try: Etude two - electoral registration Etude five credit reports

19 Online lenders AIC 20 C R The adviser will need to exercise caution here; although it is important to make clients aware of online options to access credit, they also need to be aware of the pitfalls. An informal discussion is the first recommended step to gauge the client s interest and knowledge in this topic. At this stage, it may be of use asking the client to research common problems and complaints associated with payday loans. The adviser may guide them to find human-interest stories that can serve to instil caution in a client. The client should be encouraged to check the FCA Consumer Credit Register, available on their website, to therefore understand the difference between regulated and unregulated credit. The adviser may choose at their discretion to discuss unregulated credit in more detail at this point. A search for the term stop loan sharks should provide sufficient guidance at this point. The Money Saving Expert payday loans section is excellent: advisers should encourage client to find, download and print this. Advisers should also guide navigation through and around the website. If this topic was of use, why not try: Etude four - budgeting tools Etude four - loan calculator

20 Separation tool AIC 20 B R The divorce and separation calculator can be found on the Money Advice Service website. Key step ensure the client can find this website through a search engine, and then navigate to the tool. The calculator is extremely detailed: the adviser should be aware that although the tool is aimed at helping those who are separating, it is also a useful budget planner and summary tool. The client should be encouraged to use their own financial figures in the calculator, possible from a previous budgeting exercise. Momentum can the client apply the summary details from previous budgeting sessions to this calculator? The adviser may help the client print off results which can also be done at various intermediate stages - or follow recommended links through the website. Momentum ask the client to use the tool to outline different splitting scenarios and then show them to the adviser at a later session for further discussion. If this topic was of use, why not try: Etude four - benefits calculator Etude five - online lenders Etude six - online banking

21 Extra credits - Etude Five This Etude is focussed on core digital skills needed to manage money online. These extra credits are notes are designed for advisers and volunteers to use to help increase their own confidence, skills and knowledge of these topics. They are designed as supplemental reading to give a broader context and knowledge of the areas covered in this Etude; they are organised in the same order and style as the Etude topics themselves.

22 Numeracy Tackling issues around numeracy is not really within the scope of providing financial capability, whether digitally or not, and strictly speaking isn t currently within the scope of Citizens Advice. This resource is included in case it becomes clear that a client lacks the numeracy to engage with the more advanced activities here: numeracy is key to being able to handle the numbers needed for day-to-day budgeting. The websites that are recommended here are great for helping clients improve their numeracy and will also strengthen their digital skills. Clients that need this resource may not be able to use the more advanced resources in this Etude, but there is nothing stopping them from learning the critical skills (colour-coded as the red band of activities) from other Etudes.

23 Savings Calculator This tool is really simple, but like the ones in Etude two it s really useful for teaching lots of supporting skills about using the internet. The resource is selfexplanatory, and should be used as guidance for working with clients. It s useful to know that this tool works in two ways: you can calculate by either: o Inputting the amount you need, and using the calculator to work out how long this will take o Inputting when you need your savings target by, and then working out what you need to save each week or month. Keep in mind that once a client has this result, it s a good idea to then steer them towards a budgeting tool to see where they can then get this money from in the first place.

24 Salary calculator This website looks a little cluttered, but is very good indeed. The resource makes the different types of calculator pretty clear. Just be aware that some calculators are very clever, and actually require further details like whether the client pays into a pension, or pays back a student loan, and even what type of pension or student loan is involved. The notes that the site has for each calculator is really clear. Make sure the client knows to fill in as much information as they can to get the most accurate figures out.

25 Budgeting tools The budget tool on Citizens Advice website has been thoroughly revamped and is now excellent It can be found here: >debt-and-money >budgeting >budgeting >work-out-your-budget It no longer requires a clients personal details in order to be used, and is the tool we would recommend over any other one. There are two budget planners from the Money Advice Service recommended here. One is more basic than the other, and you can spot this easily as it takes less time to complete (this is clear from the website).

26 Credit card tools The Money Advice Service credit card calculator is easy to use and very simple. Other good calculators are available. Martin Lewis one on Money Saving Expert is actually called the Minimum Repayment Calculator. Advisers and volunteers should remember to ask clients to search for Credit Card Calculators online, and not Credit Card Tools. Searching for the latter brings up many Swiss Army knife style devices instead.

27 Cutback calculators The Quick Cash Finder is a very simple tool. The actual Cut-Back Calculator no longer exists. The Demotivator is on the Money Saving Expert site. There are several other cutback calculators available online: again, clients should search for calculators and not tools.

28 Loan calculator When looking for other loan calculators online, the advisers and volunteers should make sure that clients that they are helping do not click on adverts, or go on sites run by companies trying to lend them money. Trusted advice sites such as MoneySavingExpert should be recommended. There are several loan calculators that can be found on comparison websites: the usual precautions when using comparison sites should be noted here (in other words, they are not always as impartial as they seem).

29 Baby costs tool The first screen of this tool asks for the date in the future when the baby is due. Clients should not feel that they can t use this tool if their baby has already been born; just make up a date in the future. This is not ideal, but the tool won t let you progress without entering a date.

30 Budgeting Apps These apps are all available on smartphones. Advisers and volunteers can recommend whichever one they like, but should pick one that they themselves have used and like. Attendees are always welcome to choose an alternative budgeting app if they feel it is of more use to the client, but are asked to feed this information back to the Financial Skills for Life team so that we can add this app for inclusion in future resources. If an app is deemed unsuitable, this will also be fed back so that other advisers are aware of what specifically cannot be recommended. Interesting note The Mint app (and other popular ones that the client may have heard of) is not allowed in the UK as it is a financial aggregator site, and this is banned in the UK. To put it in simple terms, to make the app work you have to provide the company your bank log-in details, and EU legislation prohibits that. As a result, there is no Mint app in Europe, but it is very popular in the rest of the world.

31 Credit Report Noddle is a free service, and can only be applied for online. Be aware that Noddle is actually owned by CallCredit. Clearscore is a free service, and can only be applied for online. Be aware that Clearscore is actually owned by Experian. The Citizens Advice resource library has some very useful mock reports and interactive presentations on credit reports, available here.

32 Credit Ratings This resource presents an opportunity to do some myth-busting: many clients have incorrect ideas about what factors affect their credit rating, and how to repair their credit. Attendees should use this as a reference list of their own and can add to it if they wish whilst guiding clients to doing online searches to answer these questions. This activity will not only teach clients about repairing their credit ratings, but will also help strengthen their ability to find information online. Advisers and volunteers need to make sure that they: o Know how to use a search engine quickly o Know to avoid ads in the search results o Know how to navigate online forums o Know how to phrase questions and use key words in their searches. o Know how to search a single site internally for further information.

33 Online Lenders To start with, most clients should be engaged in a conversation about the most common online lenders. Generally speaking, these are the payday lenders such as Wonga. Most clients will be aware of them, and attendees should do their best to show clients the various risks associated with quick and easy credit. The FCA Consumer Credit Register may be a bit technical for most clients, so tackling this is up to the adviser. If the client doesn t understand the concept of loan sharks or predatory lenders, then the adviser may wish to discuss this.

34 Separation calculator Although it is still called the Divorce and Separation calculator on their website, the Money Advice Service have also started calling this the Divorce and Money calculator. This calculator is unusual, in that it looks (deceivingly) like it actually cannot be done online. The client will have to download a small (160kb) Excel file. This will need Microsoft Excel to open and use, and actually needs the internet to fill some parts of it in. Don t worry: it doesn t look like an excel spreadsheet. It actually looks a bit like a website to be honest, so it s not very daunting. The calculator is really good, and is split into several sections. Unfortunately, it can be a bit complex to use; some of the pages open other excel sheets to fill in and so calculate the figures you need. Other bits need you to open a browser and fill in other tools in the Money Advice Service website. Basically, consider this as the Money Advice Service s ultimate calculator; it incorporates lots of the other tools into it, and is probably the most complex, detailed tool of its kind that you are likely to find online.

35 Action plan The following action plan is, broadly speaking, related to this specific Etude. Advisers can use this action plan if they wish, but are not obliged to. Similarly, if they want to make their own action plan instead, they are welcome to do this. Action plans should be tailored to reflect the client s needs; in the attached example, this can be as simple as circling those actions that are agreed as realistic, and crossing out those actions which are considered inappropriate or unnecessary. Clients should be encouraged to also think about further areas they want to discuss - this can guide further sessions Citizens Advice Digital Money Coaching Etude Five/Oct16/v1

36 Action plan By the next session, I will: Have taken the National Numeracy Challenge Have used the Money Advice Service savings calculator Etude five Have used the salary calculator Have used a budgeting tool Have used a credit card tool Have used a cutback calculator Have used a loan calculator Have downloaded a budgeting app to my phone Have checked my credit report Other things I m interested to learn about: 2016 Citizens Advice Digital Money Coaching Etude Five/Oct16/v1

37 Etude summary Who this pack is for Financial capability trainers and both specialist and generalist advisors/volunteers. Acknowledgments Thanks to David Mahon and Wendy McShane. Their expertise and guidance was invaluable. Updates The financial capability resource library is a live, evolving ecosystem of resources. The digital area is one of the most rapidly-changing areas: as such these Digital Money Coaching resources for financial capability will be subject to regular reviews to ensure that updates and new resources are introduced regularly. Feedback We d be happy to get your feedback on this training, and in fact on any of the financial capability resources. You can us at Financial.skills@citizensadvice.org.uk Copyright Copyright 2016 Citizens Advice. All rights reserved. Any reproduction of part or all of the contents in any form is prohibited except with the express written permission of Citizens Advice. Company information Citizens Advice is an operating name of the National Association of Citizens Advice Bureaux, Charity registration number , VAT number , Company Limited by Guarantee, Registered number England. Registered office: Citizens Advice, 3rd Floor North, 200 Aldersgate Street, London, EC1A 4HD Citizens Advice Digital Money Coaching Etude Five/Oct16/v1