FINANCIAL EMPOWERMENT. Through sound money management

Transcription

1 FINANCIAL EMPOWERMENT Through sound money management

2 The FEPS (Financial Empowerment and Problem Solving) Program is generously funded by the Ontario Ministry of Community and Social Services and delivered in partnership with: This FEPS training resource and support document was created by EBO for the FEPS program.

3 PRESENTATION YOUR FOUNDATION Financial realities Money Management Budget Counselling Financial picture YOUR BUDGETING TOOL Specific situations Big picture situations

4 FINANCIAL REALITIES

5 Economic climate ECONOMIC CHALLENGES Recession, deficits Inflation, interest rates Unemployment Financial Retirement Responsabilities Education Health Care Society Trends Sandwich Generation Boomerang Generation

6 CULTURE OF SAVERS? %

7 NEW REALITY CREDIT $ $ It s a high wire act financially...without a net!

8 SURVEY Percentage of the population that said that they would be in a very precarious financial situation if their paycheque was to be one week late? 47 % Source : Canadian Payroll Association

9 SURVEY Percentage of first year college student who said that level of stress was rather high when thinking about their financial situation? 71 %

10 MONEY MANAGEMENT

11 The solution? Invest in your financial education

12 LEVEL OF FINANCIAL LITERACY Having the knowkedge, skills and confidence to make better financial decisions

13 Managing Adoptingyour a budget money

14 Managing your money Giving yourself the quality of life you deserve...

15 BUDGET Better consumer Stability Less stress Bills up to date Priorities Good credit Quality of life Maximize your money

16 SURVEY Budget? 42% on paper? 84% 16%

17 SURVEY (COLLEGE STUDENTS) Budget? 59% Right now? 28% 72%

18 Write down all my expenses Not good with numbers No treats Does not earn enough Takes time Afraid to know Boring to do Will put limits Won t change anything Not need for it Does not work

19 WHY NOT? (COLLEGE STUDENTS) 3 4 reasons? 33% 5 or more? 30% TOTAL? 63%

20 NEGATIVE ATTITUDE «I adopt a budget sort of...»

21 No need to write down everything Spend where it counts Informed consumer Will free me Make most of my money Improved situation Within my means Light at the end of the tunnel Quality of life Assume my choices More than just numbers

22 POSITIVE ATTITUDE «I adopt a budget»

23 BUDGET COUNSELLING

24 OUR APPROACH? human! Unique situation Unique person Non judgemental Non directive

25 What isbring theiryou objective here?

26 A BUDGET B PERSONAL & Financial PROJECTS Goals MOTIVATION

27 A BUDGET B Financial DISTRESS Financial STABILITY COPING & SUSTAINING

28 BUDGET The tool to get back on your feet financially When late paying bills When in debt When facing creditors The tool to stay on your feet financially

29 A Situation PERSONAL Revenue Stress

30 STRESS LEVEL BEFORE MEETING? 8 9 / 10 AFTER MEETING? 33% 5 6 / 10

31 A Credit Car loan Mortgage Income tax Financing Arrears

32 B Options Solutions Advantages Disadvantages DOING WHAT S BEST

33 BUDGET When late paying bills A budget to catch up Planning paycheque to paycheque Delaying certains expenses Identifying resources that could help Making payment arrangements Possibilities of increasing revenue Using certains assets Reducing certains obligations

34 BUDGET When in debt A budget to establish any capacity to repay Know your options Understand your options Pick your best option

35 BUDGET When in debt Catching up Budget Payment arrangements Consolidation Loan Credit Counselling Debt Repayment Plan Trustee Insolvency Consumer Proposal Bankruptcy

36 VULNERABLE socially and economically 41 yrs old on Ontario Works with some credit debts Laid off lived on severance pay missed on EI now on OW... Some debts? Owns a condo but had not paid mortgage since January Legal proceedings legal fees ($6,000) Paid arrears but nothing since again Arrears in condo fees also Was disconnected by Hydro along the way Arrear on her cellphone, gym membership Own a car no payments for a while (now want $29,000 owed) Credit cards + Line of credit maxed out And by the way Separated but still in fight for shared custody (1 child), alimony RRSP! But locked in

37 BUDGET Revenue Expenses Balance (+/ ) Resources Lifestyle Goals/projects

38 BUDGET ABOUT CHOICES... It s your money... it s your life Knowing your resources Your lifestyle Your future... your goals

39 ANNUAL BUDGET With my RESOURCES Which LIFESTYLE am I willing to CHOOSE to reach your GOALS and realise your PROJECTS

40 ANNUAL BUDGET Answers the question : Do I have enough to make ends meet? Pay my debts or even save?

41 BUDGET PLANNING In advance As needed Balanced=Can make it! 1 2 hours MANAGING Tracking expenses Regularly Simple efficient 30 min to do!

42 TESTIMONY Hi, You helped us a lot over a year ago and we re still following all of your advice. One of our goals has been (and we are on the way) to pay half of our debts by the end of this year. Through careful planning, our two kids were able to resume their different activities. We keep all of our receipts and we update our spending on a weekly basis. Now we spend the money that is planned for their activities And do not use our credit like before.

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46 BUDGETING TOOLS ON EXCEL

47 BUDGET BIG deficit? SMALL deficit? Big decisions... Second job? Major changes Cheaper place to live Small decisions... Extra hours? Trimming expenses Downsize projects

48 BUDGET Surplus? Wait a minute... Optimistic revenues Underestimated lifestyle Forgot some expenses All of the above! Otherwise... Need part time job? Increased lifestyle Rely less on debt Pay down loans

49 BUDGET Like what you see? Different lifestyle? Like your expenses? Debts paid quickly enough? Balanced budget? You re not necessarily done... Work too much? Save more? More projects? All of the above?...aim at a balanced life!

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56 BUDGET COUNSELLING CASE STUDIES

57 QUESTIONS?

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59 BUDGET REVENUES Things to remember... Average Right reference Overtime?

60 OPTIONS & SOLUTIONS

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64 PEOPLE SOCIALLY AND FINANCIALLY VULNERABLE

65 DEBT MANAGEMENT CREDIT LOANS Things to know... It adds up! One card? PIN number Interest Rate Statements Limits & Fees Car Loan Bank Loan Payday Loan Interest + Fees

66 DEBT MANAGEMENT OTHER DEBTS GOOD CREDIT Welcome to It adds up! Arrears Income Tax Overpayment Student Loans Limits & Fees Car Loan Bank Loan Payday Loan Interest + Fees

67 DEBT MANAGEMENT Facing creditors? We offer representation Don t get emotional Keep «business» attitude Put end to calls if disrespectful Don t make offers you can t respect Don t say yes to offers you can t respect Harrassed? get unlisted phone number