Building confident financial customers in our region
Building confident financial customers in our region
It is likely that most of us have a savings account and maybe some form of loan, but have you considered:
How well do you really understand financial concepts?
Do you have any money leaks that could be controlled?
Do you know how to ask the right questions when you talk to your financial institution?
Have you set up your plan for a financial emergency?
These are some of the key concepts we talk about with our learners as part of our Consumer Awareness and Financial Empowerment (CAFE) coaching program, delivered in partnership with the Australian Government through the Australian NGO Cooperation Program (ANCP).
With financial knowledge comes power and we aim to make sure every learner is confident when it comes to managing money, so they can build resilient incomes and livelihoods.
Here are some of the key concepts we talk about. How familiar are you with these?
Money mindfulness
One of the key objectives of our CAFE coaching program is to instil a more active mindset in our learners on what money they are earning and what they are spending.
We encourage our learners to plan what money they might need for their day-to-day life plus potential emergencies, and plan what they do with the money they earn. We teach them that by tracking where their money goes from day-to-day, and week to week, they will get a clear idea of what is happening and maybe even where extra money could be hiding!
We task them with tracking their spending for eight weeks. This amount of time allows for the ups and downs of expenses, because some weeks are big spending weeks and some are not, depending on when bills are due etc. We provide them with a money tracker booklet (like below), and in some markets we have a digital money tracker they can download and use.
Once our learners get to know their spending habits then they begin to understand if there is any unnecessary spending, or money ‘leaks’.
Financial leaks or money leaks
In our financial capability coaching sessions we challenge our learners to consider the decisions they make day-to-day which may result in spending more than necessary, otherwise called money leaks.
To avoid these leaks we encourage learners to stop and think before opening their wallets, and ask questions like:
How long will it take to earn the same amount as I am about to spend?
What would it feel like to save the same amount I am about to spend?
Is this something that helps or harms my future? Do I need this or is it a ‘nice to have’?
Is this the most efficient, convenient or smartest way to pay for this?
Prepping for financial disasters and shocks
Learning how to prepare for financial shocks is so important because these challenging times can be so unpredictable yet so impactful on a family, financially, and emotionally.
Financial shocks can come in many different forms. From environmental disasters, such as floods and storms, to an unforeseen injury, illness or death of a family member. It could also occur if a learner has been scammed by a previous loan shark, or it may occur when a costly productive asset ceases to work unexpectedly.
We teach our learners about the importance of money mindfulness and building up savings for potential financial disasters. We coach the participants to put aside a set savings amount each week, in order to help them prioritise setting aside savings rather than saving whatever is left over.
Knowing your financial rights and responsibilities
Once our learners understand the basics of spending, saving and financial leaks, we talk about responsible finance and how to ensure their rights are protected when they deal with financial institutions.
Here are some of the responsibilities of financial service providers we share with learners, and some of the things we could all think about as customers:
Information on financial products and services should be easy to understand, so that the customer can compare options and choose what best fits their circumstances.
Financial institutions are required to ensure their customers understand the price of their products as well as the terms and conditions of the product or service.
Customers have the choice to say “no” to a financial product or service that doesn’t fit their needs, priorities or preferences.
The financial institution should only provide a loan that is within the customer’s capacity to repay, without debt stress. The customer is required to provide honest information about any other debts they owe, and let the financial institution know when their financial circumstances change significantly.
Financial institutions must treat their customers fairly and respectfully and if the customer is ever uncomfortable then they should share this concern with the financial institution.
The financial institution is committed to keeping the customer’s financial information confidential - it is fine to ask what personal data will be stored, how it is used and what is shared with whom.
Financial institutions should provide products and services that are fairly priced and affordable to the customer, however it is important that the customer shops around so that they understand what represents value, a fair price and when they are being charged too much.
We reiterate to our learners that they should only choose a financial institution if they are comfortable that the institution is providing them with a quality experience, and they are confident that the financial institution is responsible, according to the above criteria.
So, how well did you go in understanding these financial concepts?
And are you interested in helping more women in our region build their financial skills and confidence? You can invest in good and invest in skills today.