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

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

Wealth vs. Income 3 The wealthy vs. the non-wealthy The 2008 recession Building assets vs. expenditures

Financial Stability Is Harder Than Ever to Achieve Weak Economy High 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 Technology Spending is just a click away, making it harder to stick to a budget 4

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 5 th 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 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 5

6 Trajectory to Financial Empowerment CREDITDEBTBUDGETINGBANKING 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

7 The End CGF Junior Achievement LIFT Community Action Programs