Meet Gen, our Financial Counsellor, who works from our community centres in Blacktown and Emerton.
We asked her a few questions
Can you share a bit about your background and experience?
I recently transitioned my career to Financial Counselling from a 30-year career mostly in Financial Services, specialising in risk management.
What drove the change?
I heard an inspiring financial counsellor speak at an International Women’s Day event – what she achieved was amazing. I wanted to help others in that same way.
What is your goal?
I am passionate about providing holistic financial counselling to people in financial difficulty and providing system advocacy to address systemic issues impacting on our most vulnerable people.
What’s the most common financial concern or question you hear from clients?
The most common concern I hear from clients is that they simply don’t have enough income to cover their costs of living. As a result, they are behind on their mortgage or other bills, they are being chased by creditors and are very stressed.
Through financial counselling, we write down their income and expenses, and their assets (the things they own) and liabilities (how much they owe others), so we can understand their financial situation.
This understanding empowers clients to make informed choices to improve their financial situation, which reduces their stress.
What are some unexpected ways you’ve been able to help clients facing financial struggles?
Many people are managing pay cheque-to-pay cheque, with no money available for unexpected expenses. This is very stressful.
We help them to understand their financial situation so they can make informed choices about their spending, managing their debts and starting to save some money to cover unexpected expenses – and maybe even to have some money for things that bring them joy.
We also help reduce stress by helping them talk to their creditors about how they can manage their debts. This might be through agreeing to stop payments while they get back on their feet or setting up a payment arrangement to clear the debt.
We can also help them make sure that they:
- Are getting all of their entitlements from Centrelink
- Are on the best plans for their utilities
- If clients need some help with their utilities bills, we can provide them with EAPA (Energy Accounts Payment Assistance) vouchers
- Are getting the support they need through providing referrals to other services, such as legal services.
Every client situation is different and we work to help them decide on the best choices for them to manage their financial situation.
When working with a client in debt, what’s the first thing you focus on?
First we need to understand what is happening with the debt – who is it owed to, who owes it, how much is owed, how much is in arrears/overdue, what repayments are being made and what repayments should be made, has the creditor taken any action to recover the debt, how and when was the debt established.
Then we can work through the options to manage the debt. Options might include asking the creditor for a payment arrangement, or to freeze payments for a short period, or even to waive interest, fees, charges or the amount owed, depending on the client’s situation.
There might be other actions we need to take, such as seeking legal advice especially if the creditor has commenced legal action or raising a complaint if the creditor has not lent responsibly.
We will work with the client to help them decide how they want to manage their debt.
For someone with a limited income, what’s the best way to start budgeting?
The first step in budgeting is to write down your income – the money you receive – and your expenses – the money you spend. This will help you to know where your money is going so you can decide if that is right for you.
It will help you see if you have enough income for your lifestyle, and if not, what you might be able to do about it. Perhaps there are ways for you to increase your income, such as working more or making sure you are receiving all of your entitlements from Centrelink, or renting out a room.
Perhaps there are ways you can reduce your expenses – are you spending your money on the things you want to prioritise?
Importantly, are you setting aside some money for unexpected or lumpy expenses (such as a quarterly electricity bill, annual car registration or a medical issue) and things that bring you joy, like a night out with friends or a weekend away.
Managing all of your expenses is an important benefit of having a budget, which will help reduce the stress of not knowing if you will have enough money.
What’s one simple, actionable tip you give people to start saving money right away?
- Review your bank statements: Look at your biggest expenses and make sure that they are important to you and that you are getting the best deal. If its not important to you, stop paying for it and save that money.
- Review your utilities bills: Are you on the best plan? Can you reduce how much electricity you use? Do you really need to use a toll road?
- Do a mortgage health check: Check your interest rate on your mortgage and other borrowings – could you get a better rate? Call the bank and ask if they can reduce your mortgage interest rate.
- Plan ahead: Could you reduce your use of Ubers/ride-share services or how often you eat out or shop during sales?
- Get real: Do you really need a second car, another streaming service, or a spare bedroom (if you are lucky enough to have these things)?
What’s a great website clients should check out?
The government’s Moneysmart website has a long list of simple ways to save money – it’s worth a visit.
What are some everyday strategies to save money?
Firstly, work out what you are saving for – your goals. I like to think about two things:
- ‘Lumpy’ or unexpected expenses, like car registration, which you only pay once a year; or a medical issue or vet bill
- Things that bring you joy, like a holiday or a visit to grandparents who are far away
Secondly, work out how much you want to save for each of these, based on your budget and your goals.
Thirdly, set up two separate bank accounts and transfer money automatically every time you receive income (or have your income paid directly to your savings accounts).
If your savings are in a separate account, it will help you stop and think about whether your savings goal is more important than the impulse buy.
Do people really stick to their budgets?
A budget is a tool that helps you plan and manage how you spend your money. Your budget needs to work for you and your lifestyle so it’s important to adjust your budget as things change.
For example, if your expenses start to increase you may need to reduce your spending, or change your savings goal. Or you might be able to save more if you get a pay rise or you pay off some debt.
The important thing is to monitor your spending and make conscious choices about how you are spending your money.
Are there any financial strategies or tips you recommend to reduce stress around money?
Have a budget and monitor your spending to help you see where your money is going. You can put aside money for bills and expenses and set up a plan to reach your financial goals.
If things start to go wrong, seek help early. Call the National Debt Helpline (1800 007 007). Call your creditors and see how they can help you. Seek financial counselling.
If the stress becomes overwhelming, seek help – see a counsellor – Catholic Care Western Sydney and the Blue Mountains has low cost counsellors available. Or you can call Lifeline – 13 11 14 or Beyond Blue – 1300 22 46 36. In an emergency, call 000.
How can someone improve their credit score?
Lenders use your credit score (or credit rating) to decide whether to give you credit or lend you money. Your credit score is based on personal and financial information about you that’s kept in your credit report.
If your credit or loan repayments are getting out of control, talk to your lender. Taking action straight away can stop a small problem from becoming a big one.
If your credit score is low, there are steps you can take to help improve it.
You can:
- lower your credit card limit
- limit how many applications you make for credit
- pay your rent or mortgage on time
- pay your utility bills on time
- pay your credit card on time each month — either pay in full or pay more than the minimum repayment
As you do these things, your credit score will start to improve.
You can access your credit score and credit report for free.
If you’re struggling to pay bills and are getting into more debt, talk to a financial counsellor. They can take you through the options and help you make a plan.
Are there any budgeting tools or apps you’d recommend to help people stay on top of their finances?
My favourite tool is the budget planner on the Moneysmart website. You can use it on the website or download it in Excel. You can then track what really happens, and update it when you need to.
The Moneysmart website from ASIC (Australian Securities and Investments Commission) has lots of really useful information about managing money.
To find out more financial tips, or book your free financial counselling session, contact us today.
Gen, Financial Counsellor.
