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Published byAbner Wilkerson Modified over 9 years ago
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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
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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
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Wealth vs. Income 3 The wealthy vs. the non-wealthy The 2008 recession Building assets vs. expenditures
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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
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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 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 5
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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
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7 The End CGF Junior Achievement LIFT Community Action Programs
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