why financial coaching? fact pattern – the smith family household monthly income is $2,000 2...
TRANSCRIPT
![Page 1: Why Financial Coaching? Fact Pattern – the Smith family Household monthly income is $2,000 2 children 2 cars Rent an apartment Goals: Understand poverty](https://reader035.vdocument.in/reader035/viewer/2022080915/56649dbd5503460f94aaf8de/html5/thumbnails/1.jpg)
Why Financial Coaching?
Fact Pattern – the Smith family
• Household monthly income is $2,000
• 2 children• 2 cars• Rent an apartment
Goals:• Understand poverty in
America• The need for
Coaching• The benefits of
Coaching
![Page 2: Why Financial Coaching? Fact Pattern – the Smith family Household monthly income is $2,000 2 children 2 cars Rent an apartment Goals: Understand poverty](https://reader035.vdocument.in/reader035/viewer/2022080915/56649dbd5503460f94aaf8de/html5/thumbnails/2.jpg)
2
Poverty in America
~100 Million Americans in
poverty (150% of poverty line or
below)
8.3% Unemployment rate
30 million un or under-banked
households
18.2% under-employment
24 million with no credit score
Fringe/predatory lenders=
$100 billion/year industry
![Page 3: Why Financial Coaching? Fact Pattern – the Smith family Household monthly income is $2,000 2 children 2 cars Rent an apartment Goals: Understand poverty](https://reader035.vdocument.in/reader035/viewer/2022080915/56649dbd5503460f94aaf8de/html5/thumbnails/3.jpg)
3
Wealth vs. Income
• The wealthy vs. the
non-wealthy
• The 2008 recession
• Building assets vs.
expenditures
![Page 4: Why Financial Coaching? Fact Pattern – the Smith family Household monthly income is $2,000 2 children 2 cars Rent an apartment Goals: Understand poverty](https://reader035.vdocument.in/reader035/viewer/2022080915/56649dbd5503460f94aaf8de/html5/thumbnails/4.jpg)
4
Financial Stability Is Harder Than Ever to Achieve
Weak EconomyHigh unemployment
rates and stagnant wages
Risky Consumer Credit
Easier than ever to take out too much debt: one bad decision can have a
lifetime of consequences
Predatory Financial Products
Financial products designed to take
advantage of vulnerable or unsuspecting
TechnologySpending is just a click
away, making it harder to stick to a budget
![Page 5: Why Financial Coaching? Fact Pattern – the Smith family Household monthly income is $2,000 2 children 2 cars Rent an apartment Goals: Understand poverty](https://reader035.vdocument.in/reader035/viewer/2022080915/56649dbd5503460f94aaf8de/html5/thumbnails/5.jpg)
5
61% of Americans report some difficulty in covering expenses
and paying bills.
The average American borrower has $10,852 in outstanding
revolving debt (e.g., credit card debt), the 5th highest amount in
the country.
38% of American homeowners are “cost burdened” (i.e. their
homeownership costs more than 30% of their income) — only 5
states have worse rates and none are in New England.
10% of Americans with a retirement account took out a loan or hardship withdrawal
against the account in the past year.
Over 12 million Americans used a payday loan in 2010. The
industry has issued $27 billion in loans since the 1990s.
55.8% of Americans have sub-prime credit scores.
58% of Americans have never calculated their retirement
needs.
24% of Americans have no retirement account (IRA, 401(k),
etc)
Note: All data 2009 except for home ownership cost-burden (2010), credit-card/ credit score (Q3 2011), and payday (2012) Source: CFED; FINRA 2009; RI Dept of Business Regulation
A Growing Problem: National
![Page 6: Why Financial Coaching? Fact Pattern – the Smith family Household monthly income is $2,000 2 children 2 cars Rent an apartment Goals: Understand poverty](https://reader035.vdocument.in/reader035/viewer/2022080915/56649dbd5503460f94aaf8de/html5/thumbnails/6.jpg)
Saving
Trajectory to Financial
Empowerment
CREDIT DEBTBUDGETINGBANKING
How Coaching Helps:
• Avoid predatory services
• Open a safe, affordable account
• Reduce expenses
• Increase income
• Build credit
• Plan for future goals
• Manage & avoid debt
• Save for emergencies and the future
![Page 7: Why Financial Coaching? Fact Pattern – the Smith family Household monthly income is $2,000 2 children 2 cars Rent an apartment Goals: Understand poverty](https://reader035.vdocument.in/reader035/viewer/2022080915/56649dbd5503460f94aaf8de/html5/thumbnails/7.jpg)
7
The EndCGF
JuniorAchievement
LIFT
CommunityAction Programs