Cold Lake residents had a unique opportunity to improve their money management skills. Cold Lake and District FCSS hosted Finding Your Golden Egg last Wednesday.
The workshop focused on creating practical ways to manage personal finances. It comes at a time when many are struggling financially in the community.
“I just think that when times get tough, it's even more important to watch our pennies, and where we are putting them to spend effectively to make sure our needs are met,” said Social Programs Coordinator for the FCSS Cathy Aust.
She added, “(Money management is) a skill that everyone needs to be aware of.
It contributes to financial wellness, and to financial well being. Stress is highly related to financial means or lack of means.”
Lakeland Credit Union (LCU) contractor Jonathan Berube conducted the workshop.
Berube has a long history with the LCU and specializes in financial literacy.
“He's an incredible facilitator. He just takes you through understanding how to
manage money, how we create debt and how we get out of debt,” said Aust. “It's just really a fun, interactive, high energy management course.”
Berube walked attendees through a number of thoughtful activities to engage with each other and set financial goals.
When it comes to big-ticket items, Berube suggested knowing what you want to pay in the long term instead of monthly.
“Instead of going in with specifics, I went in with this is how much I want to pay per month,” said Berube, taking the audience back to when he bought his first car. “They said we'll make that work for you, and extended my months over seven years instead of five. That was a really bad idea. I was 19-years-old when I bought my first car. It was someone I knew so I thought they would take care of me, but always be skeptical.”
It's an old cliché, but the customer is always in charge.
Berube explained making big decisions is easier for the customer if they've done their homework. He suggested researching financial institutions to better understand where loans are coming from. This will let the consumer know what their demands will be, instead of letting a car company finding an institution to make the loan work.
Sometimes car companies make special commission for zero-down incentive plans, or deals that seem too good to be true.
Berube noted that consumers should stay away from zero-down deals.
“If you're not putting anything down that's better for them because they're making more interest,” said Berube.
Next, Berube related having a large family could be expensive. He suggested employees make sure they take advantage of employee benefits programs.
“I like getting free stuff, so if my employer is going to pay for free stuff I'm going to get it,” said Berube.
Taking advantage of benefits can include RRSP matching, stock programs, and health and wellness benefits.
“It's free money from your employer that you didn't have to work for, that's a good way to save money.”
The workshop also introduced attendees to the concept of good debt versus bad debt. Berube explained that buying a house or starting a small business is considered good debt.
“It's good debt because who starts a business hoping to make less money?” asked Berube, explaining banks see certain debt accounts as investments.
Bad credit is accumulated from bigticket items that depreciate over time, like multiple cars or a boat. Berube explained good and bad credit as one of the human elements to debt.
Loan organizations look at whether the consumer is paying their bills on time. They also notice, however, how much credit their future customer is searching for, or the number of credit cards they have accumulated.
“The way the credit rating looks at it is if you're searching often for new credit, they will think you are desperate for credit,” said Berube.
Consumers can check their credit ratings by mailing a report request to Equifax or TransUnion. They are the only credit agencies in Canada. Either will charge for a credit score, but legally they must provide the report for free.
Berube explained the report is what the loan institution is after.
“These are real people working at these agencies, some times they make errors,” said Berube. “Check your credit score yearly.”
Berube recommended always being open and honest with an agency. He said the consumer can negotiate.
“It (was) a chance to give people an opportunity to understand more about money and more about their spending habits,” said Aust. “Hopefully, it will get them on track for wanting to get into budgets and keep them.”
