Excerpts from the contest: honorable mentions!

While they weren’t our grand winners, some of our coaches brought up moments that were worth sharing. Here are some excerpts from coaches’ blog entries that seemed to be representative of the experiences we see as coaches. Take a look at what your fellow coaches had to say!

Here, a coach gets to the heart of the matter:
Rob S.
“Money does not solve the problem or even create the problem. Money is simply a tool used during our day-to-day lives...As a coach, it is important to share the tools we have available, but it is just important to spend the time listening and coaching or clients on personal habits that impact their financial solution. Habits and ideals must change for lasting financial success.”

Here, a mini-story about habit change:
Elsa D.
“Chloe spent over $150 dollars at Wal-Mart in 1-wk on things she admitted she didn’t really need: snacks so her son won’t cry while shopping, things for her fingernails, on and on. We were on the right track, because Chloe was acknowledging her bad habits. Similarly, the husband went to a check-cashing store every payday because he wanted to see the money he earned. This led to a long explanation about the money he was not seeing, the money he would save if he opened a checking and savings account. I suggested that he deposit his paycheck into a checking account, and save the amount that he'd been spending at the check-casher. For both of them, it did not take a lot of extra effort, but simpsimple, habit-forming tasks that would allow them to save.”

And here, a coach realizes the power of empowerment:
Larry G.

“I was almost finished with the first session, but we hadn’t accomplished enough. Yes, we knew the items on her credit report, and yes, she had an idea of how to get started, but I could still see that this information hadn’t connected with her yet. I wanted to explain to her how important would be down the road when she decided they were stable enough to buy that new car, or go back to school, or even buy a home. But instead of telling her these things that she already knew, I asked her what she intended to do about it.”

Stay tuned for more coaching blog fun!

Curse of the Shiny Object

I have a client—let’s call her Sue—who was locked in battle with a formidable but conquerable opponent: medical bills. The problem was that Sue was never one to get behind on bills, and when her son broke his arm, she paid a lot of the bills in full (yikes!) at the expense of her mortgage, on which she then fell quickly behind. Luckily, she had a steady income, so it was a comfort to know that her problem had a simple (if stressful) solution. She just needed to cut back, track her spending, and weather this storm with patience and planning. In a few months, Sue could be back on track and ready to start saving. But after the first meeting, I wasn't so convinced that she had the drive to do it.

I’m sure that “steady income” alone has made some of you jealous. In my experience with clients, this is often the deciding factor in whether or not a coach will be able to help a client make progress. So to hear that Sue had a steady income was exciting for me, because I consider myself a problem solver. I like to experience new challenges and unfamiliar territories, because that’s what fuels my curiosity in life.

Unfortunately, that curiosity comes with a curse: the Curse of the Shiny Object (AKA a short attention span). When a problem pops up, I want to solve it—right here and now, before it floats away on the breeze. So when it comes to coaching, I run into problems with my patience and focus. That’s not to say that I’m a bad listener. I always work to hear my clients out, empathize, and find myself asking good, leading questions (after all, I've been through training over a dozen times by now). Where I run into problems is in taking all the information they've given me, and narrowing down my focus onto a few manageable pieces. When we touched upon the idea of a budget, I started a budget. While working on the budget, we ran into student loan payments, and I switched gears into debt prioritization. When we entered her interest rates, I suddenly wanted to know what her credit situation looked like. Sue tuned out, and for good reason. I had the skills to lead her to water, but when I didn't slow down to prioritize and focus, she assumed that she needed to drink the whole lake.

When we met for her next appointment, she was quick to let me know that she “didn't do any of that stuff we talked about last time.” I asked why, and she told me what I should have known: “There was just too much to look at.” Since she was kind enough to identify where we went wrong, it was easy to correct it, and in that second meeting we made an emergency budget to get her through to the next meeting, for which she’d be bringing bills and a list of her debts. I realized quickly that Sue was a very driven woman, but she needed someone to help her map out a plan and hold her accountable. I needed to be her focus, so that she could worry about doing the work.

I know it sounds so basic, but it really dawned on me that in the hour we meet with our client, we are seeing just a brief glimpse of what composes their life. While it might seem like they’re presenting us a dozen different problems, that doesn't mean we need to solve them all at once. As with habit-change, even the most basic tasks take time and effort to accomplish. As a coach, it’s my job to make the process as simple and logical as possible. I’m now happy to report that Sue is nearly caught up on her mortgage, and is still waiting on a large tax refund. I’m also happy to report that the tax refund is the only item on our agenda for the next meeting, as we allocate it one account at a time.

The need for emergency savings

With the opening of our Safety Net Savings program, we want to take this month to focus in on savings, and how important it is in establishing stability and avoiding financial catastrophe. Just yesterday, I caught myself saying the type of phrase that leads directly into an emergency: "I don't foresee any trouble on the horizon." But what would happen if you ran into a large medical expense? What would happen if you lost your job? What if your car breaks down? What if etc? It might be easy for some of us to say that everything would be fine, but statistically, approximately half of us have insufficient savings to weather the storm(3). So when those emergencies inevitably occur, what options do our clients have?

If for some reason you don't believe how hard it can be, we dare you to test your financial survival skills! 

While it would be great to have a support system of family and friends that is both willing and able to help, that support is a luxury that many people don't have. Instead, many turn to other sources of liquid assets, such as personal savings, early withdrawal from investments, and the sale or pawn of their possessions. Others find their way into debt, relying on credit cards, or payday and title loans, to keep them afloat. Those who do have assets might find their way through unemployment through a mortgage refinance or a home equity line of credit, jeopardizing what security they do have(3). Of those who do take out payday loans, 16% are forced to do so because of an unexpected expense(1). Those of you who have seen enough clients will know by now that the bills accompanying the crisis often go unpaid, ending up in collections where they drag down credit scores and haunt clients for years to come.

As a rule of thumb, emergency savings accounts would ideally have enough money for a family to survive for three months without a source of income. In Texas, the roughly 27% of families in asset poverty are two to three times less likely to weather the rainy days without incurring some form of debt. It's easy to see the negative effects of not having savings, but there’s also a positive correlation between savings and generational income—if the parents in a low-income household had high savings, there’s only a 33% chance that the child will remain in the bottom quartile, as opposed to the 50% of children who come from households with low savings(3). 

Knowing that savings can lead to greater financial stability, as well as safeguard against potential disaster, we're hoping all coaches will encourage their clients to save for the unexpected, and take a look at what it takes to set up an account. Just as we set our goals for an unknown future, we still need to take those first steps toward progress. We all need a safety net sometimes!

Sources:

1. http://www.pewstates.org/uploadedFiles/PCS_Assets/2012/Pew_Payday_Lending_Report.pdf
2. http://www.pewstates.org/uploadedFiles/PCS_Assets/2013/EMP_Report_Hard_Choices_Navigating_the_Economic_Shock_of_Unemployment.pdf
3. http://www.forabettertexas.org/images/EO_2012_10_RE_Savings.pdf

The times, they are a-changin Financial Programs!

There have been a lot of changes to the financial programs in the past months, and we wanted our coaches to know just what adjustments we've been making.

Express Matched Savings

Our Matched Savings program is now running an Express account for people who are ready to get their goals off the ground in the near-future. Funds available in the last year of our current grant will allow us to offer a year-long Express Matched Savings Program May 1, 2013 through May 30^th, 2014 (enrollment deadline October 15).  As opposed to the regular eligibility requirements for the program, applicants to the express program are not required to live on a Foundation Communities property or have a dependent, but will be required to have a letter of recommendation written on their behalf. The Express program is limited to applicants who are seeking higher education or the improvement/opening of a small business (no home-buyers), and must complete their education requirements on a shorter time-frame.

Because of the strict requirements for this year-long program, we are seeking participants who are serious about saving and using the funds for college or their business. Since we are not releasing this information on a large scale, we strongly encourage you to share this information with any students or entrepreneurs if they have demonstrated the ability to save, will be able to complete our education requirements, and are certain that they will be enrolled in school or have started their business by May 30^th, 2014. An overview and application materials are now in the resource drawer in the main coaching office.

Fresh Start Loan

The Fresh Start Loan Program has made some updates that are in line with what we have learned so far. 

• The requirement for employment income has been lifted.  Anyone with documentable income in the last 90 days is eligible, assuming they meet all the other qualifying criteria. 
• A client must have checks or be able to get checks to qualify.  This is the only form of payment Foundation Communities can accept (post-dated checks must be provided at the time of loan issue).  Collecting money orders has proven to be a large administrative burden that Foundation Communities does not have the capacity for.
• A client may be declined for a Fresh Start Loan if they owe Foundation Communities money through previous transactions, including residence at a housing property.

For those needing an refresher on all of the requirements, see the Fresh Start overview!  

Child Support for College

The incentives for the Child Support for College Program are more generous than they were when the program started.  Now, when a client opens a Texas College Savings Plan with the minimum $25, Foundation Communities deposits a $100 incentive.  Every $1 deposited beyond the initial $25 is matched with $1.  The maximum incentive that can be deposited in an account is $500.  The enrollment deadline is now August 21st, 2013 and all funds deposited by August 31^st, 2013 will be matched.  For all the details, visit the Child Support for College web page.

As always, if you have any questions or concerns, do not hesitate to get in contact with us. Thanks for reading!

Help Us Celebrate Financial Literacy Month!

Did you know that April is National Financial Literacy Month? Probably not, but that won't stop you from celebrating, will it? Definitely not. In order for you to get your financial literacy boogie on, the Consumer Credit Counseling Service of Greater Dallas (CCCS of Greater Dallas), a nonprofit provider of free financial education as well as free housing and credit counseling, is offering 100 FREE live webinars. This is a good chance to brush up on your training, and to get guidance on familiar client issues. We wanted to let you all know of the opportunity, and to give you some direction on which of these we think will be most useful in dealing with clients. 

The 100 webinars will focus on 39 different personal finance topics, ranging from credit scores and getting out of debt, to buying a home and preventing foreclosure. You can feel free to take a look at the entire list, but here are some of the sessions that align with our clients' concerns:

• Vision Quest: Goal-Setting

• Dumb Money Mistakes We Make with our Family

• Surviving Financial Crisis

• The Psychology of Debt

• Alternatives to Payday Loans

You can see all of April's schedule here. Open sessions will indicate so with a yellow "Sign Up" button; just click to register.

Sessions will be running day and night to give you plenty of opportunity to tune in. You can polish your goal-setting over a bowl of cereal, spend your lunch hour learning the psychology of debt, or snuggle up with your computer and drift asleep to the gentle tones of financial crises. These webinars have the chance to make you a more informed, effective coach, so take Financial  Literacy Month to sharpen your skills!

Please feel free to forward this information to others who may benefit from this opportunity.  For further questions regarding these webinars, please contact Mr. Todd Mark at tmark@cccs.net. We hope you make the most of this opportunity! Thanks!

Financial Fitness Greater Austin Contest

We wanted to take this month's blog to make you aware of a city-wide financial literacy effort going on right now. Financial Fitness Greater Austin is now accepting applications for its Financial Fitness Contest, which engages its contestants in the quest for financial literacy. Participants will be responsible for completing different activities—dealing with either budgeting or credit—meant to give them a stronger connection to their money. Cash prizes are offered to top winners, and participants will get the chance to be involved in the promotion of a city-wide financial literacy effort. To participate, your client needs only to:

·         Select one packet (credit or budget – available for pick up at the CFC)
·         Complete all the activities in the packet
·         Write a 1-2 page essay on how the activities have helped them; how they shared what they learned with friends, family or co-workers and how they've taken action with some of the lessons learned

The deadline is April 12^th, so if your client is interested, please encourage them to get started on the exercises. This is a great way to guide your discussions with the client and focus the conversation around these topics. It will also help to give them some concrete goals and activities that can open the door to greater understanding. And it will give them the chance to win up to $500. Aside from the individual impact of improved financial literacy, this is also a good chance for the FFGA to get a better picture of the types of problems that clients are bringing to the table, and how to better serve the community. Just ask your greeter for an application, and get your clients headed in the right direction!

To learn more about Financial Fitness Greater Austin, visit www.financialfitnessaustin.org.

Financial Coaching and the Affordable Care Act

With certain parts of the Affordable Care Act guaranteed to have an impact on our clients’ finances, we thought it would be a good idea to give you a picture of what this might look like for the state of Texas, the Financial Coaching program, and our clients.

What does the Affordable Care Act do? With the passing of the ACA come multiple provisions that will have a direct impact on all Texans. On January 1^st, 2014, there goes into effect an individual mandate, stating that all citizens must be covered by some sort of health insurance. This will happen nation-wide, as the Supreme Court ruled in 2012 that the individual mandate was constitutional, serving the same function as a tax. This obviously cues a large shift in the state's health-care environment, since, as of 2013, over a quarter of all Texas residents do not have health insurance, giving Texas the highest rate of uninsured in the nation. To find out where Texas ranks on this and other indicators of financial security, follow this link to see the CFED’s assets and opportunity scorecard.

An optional clause of the ACA would then allow our state legislature the decision to accept or reject a plan to expand Medicaid coverage. This expansion would raise the income limits for pregnant women, infants, the “medically needy,” and low-income adults under age 65. If the state decides to accept expansion, nearly a million currently uninsured Texans will now fall within the boundaries of Medicaid. If they refuse the expansion, the entirety of our 6.2 million uninsured will be forced to either purchase a plan or pay a fine. As of right now, it appears that Texas will opt out of the Medicaid expansion proposal.

How will it affect our clients? Unfortunately, the combination of the individual mandate without Medicaid expansion will force many low-income Texas residents to take on the added expense of health insurance. Follow this link to see who will and will not need to purchase insurance. As you might expect, this leaves out a healthy (pun intended (but not very funny)) portion of our clients, primarily those who earn too much to qualify for health insurance through public assistance, but who still don’t earn enough to take on another bill. For these clients, the long-term benefits of having insurance will butt heads with their need to provide for day-to-day expenses. With the added burden of finding an affordable plan, many of these low-income individuals will find themselves at odds with an unfamiliar and complex subject that has the potential to strain their budgets.

What will we be able to do for them? The Financial Coaching program will be finding ways to get involved with the health initiatives that are already in action at Foundation Communities. At our properties, we currently provide fitness and health programs for both children and adults, as well as screening residents for SNAP and Medicaid eligibility. We are hoping to reach beyond our properties and into the community through the Community Financial Center and the Financial Coaching program. We will do that in two ways:

1. As you may know from experience, our clients often come in with crippling medical debt. We intend to provide further training to volunteers in regard to the rights, assistance, and strategies that our clients have in dealing with that debt. 
2. We also intend to prevent such a problem's inception by helping clients navigate their options in the foreign territory of health insurance.  Foundation Communities will apply to be part of the Health Navigators program, which is part of the Affordable Care Act.  This means that Health Navigators will be available at the CFC and other locations to help clients access in-person assistance and information about the available types of coverage, the best value for their money, and enrolling in the appropriate program. 

By taking these steps, we can help dodge another obstacle on our clients' paths to financial stability. With your help, we hope to make this transition easy and informative for the people it hits the hardest!