Rethink homelessness. Leave a comment below.
The Women’s Refuge brought in Claire some time ago. She had been battered and almost strangled by her ex, leaving her barely talking with a croak, and he had also verbally abused her employers and told them what a piece of work she was, so she had lost her job as well.
She was waiting for a benefit to start, and was worried mainly about her power and phone bills, both of them overdue. We did the normal things, phoned the utilities and wrote letters. We put Claire on the phone to give the ok for us to talk to the phone company, and the customer service officer, not a good English speaker, was so unhelpful that Claire lost the plot completely, gave the woman an earful, then banged the phone down. Not a good negotiating opener.
A week later Claire phoned. She was devastated, because her phone had been disconnected, and she was paranoid that her ex would come back to finish her off, and she wouldn’t be able even to phone the police. She was going to end it all, she said. She was meeting her son after school, taking him to the dentist, and then would take her life and leave her problems behind her for ever. I said it wasn’t a good idea, but she had thought it all through, she said. It would attract big headlines, create a stir, abused mother takes her life over overdue phone bill, and maybe big utilities would learn that they couldn’t treat people like that, and so some good may result. She hung up. She was not hysterical and sobbing, she was calm and deliberate, somehow cold and distant, and she sounded deadly serious. I did not have her mobile number, Women’s Refuge people were out, and I got no answer from Mental Health crisis. Who else to phone? The Samaritans?
Finally I phoned the Police on 111. I wasn’t sure how Claire would react to the Police arriving at her door, and maybe I would get a mouthful from Claire in return for my actions. When she did phone back however she was overwhelmingly grateful. She had been standing on the edge, close to falling off, and I had saved her. The Police had taken her to the watch-house and given her a cup of tea. They had gone to Work and Income and made an urgent appointment. They had assured her things would be ok, to leave things to the professionals at the budgeting service and not to do anything rash.
The next day, Work and Income paid both utilities bills in full for her, both arrears and current, and I had this beautiful blond throw her arms around me in the middle of the office. I was worried she would start kissing me, and my partner, waiting for me outside, might see us!
I never saw Claire again, although I did have a few phone calls with her about her budget. The last one she was over the moon. She had found a job, $40,000 to start, and it was all my doing, she said. She loved me more than I could ever know. As far as I know she is still doing well. The budget worksheets and cashflows certainly have their place in our work, but sometimes the other needs are even greater, and if we fix these we may not need to do much more.
Betty brought in her credit card bill today which was a bit of a surprise. I didn’t even know she had a credit card and would certainly have told her as strongly as I could not to go near one. Betty had a health problem and was on Invalid’s Benefit, she had intellectual difficulties, an anger management problem, and she was illiterate, although she had learned to sign her name.
A bank had generously posted her an application, pre-approved of course, and once someone had read the letter to her she asked for a pen, and where to sign. Betty soon discovered that she could use her shiny new card to draw money from an ATM, and great wads of bills came forth.
She spent so prolifically that some of the local retailers called the police, wondering how this woman had so much cash to spend, and they casually called in one day to see whether we could help at all. Betty had spent prolifically, on anything that you could name, and once she tired of things she gave them away, so she could buy some more.
Now it was at crunch point. Her balance was $21,500, and her minimum monthly payment was $10,500. She would have found difficulty in fronting up with $20 that day. I told her, no nonsense, that the card had to be destroyed. She sat there in the chair, red faced and tearful, stamping her feet on the ground like a child, and crying ‘It’s mine, It’s mine’ like Gollum with his precious ring. In vain did I try to tell her that the card was not hers, it never had been, it belonged to the bank, and they would want it back.
After we sent off the authorisation, the fun bit began. The bank did not really want to talk about the debt much at all. She could borrow some money perhaps, and pay off the debt in full, or the family could help, or they would simply have to begin their normal collection process. It was not their problem, it was Betty’s. I argued that they had behaved improperly in sending out the pre-approved offer in the first place. Offering people credit cards without even an assessment is gross folly, and they deserved to have people such as Betty default on payment. They would not have lent her money, so why give her a credit card?
I was quite reasonable with the bank. All I wanted was for a freeze on interest charges, and for the bank to accept $20 per week from Betty for the next 20 years. The bank tried to argue that to discriminate against the Bettys of the world would be a breach of human rights, but could not explain why a failure to approve a loan would not be such a breach.
Finally, with progress so slow, I contacted the Banking Ombudsman, who agreed to forward my complaint to the bank’s complaints officer. The final outcome, when it came, blew me away. The bank surrendered completely, and agreed to write off the whole of the debt, subject to some acceptable conditions such as that it was a full and final agreement. Strangely, they also did not want to be named.
Have you ever considered being a budget adviser? Find out more at www.familybudgeting.org.nz/get-budgeting-advice/volunteer
Budgeting isn’t really that difficult. It’s all pretty simple stuff, really – as theory, that is. Keep track of your expenditure, plan ahead, and all that sort of thing.
But it all presupposes people follow that sort of logical reasoning process, and the longer that I do this work, it seems to me that logic and reason play a very, very small part in it all for very many people.
A former Prime Minister, known for his acerbic wit, once assailed a questioner with the question of ‘What part of ‘no’ don’t you understand?’. When someone can’t meet the credit contract payments on the washing machine, unless they give up the Chriscos, you would think it was a similar no-brainer, but for many it’s a whole lot more complicated than that. They want both things, so desperately, that they become totally blind to the reality that one outcome may well be that they end up with neither.
Joan’s new client
When Joan first became an adviser, she was very, very unsure of herself, and would phone me almost every night to ask my advice and check she was going the right way. One day I told her I had a new client for her, a solo dad, with a middling amount of debt, and while he looked ok as a case study, I had doubts as to whether she could make him into a success story in real life, but she said she liked a challenge.
From the beginning they seemed to have rapport, which we talk about a lot in training, and Joan worked out a cashflow for Lance which, if he stuck to it, would get him out of the mess. Lance would say to her ‘That’s okay, you’re the adviser, and I’ll do what you advise. I want to get out of this mess.’ She would suggest priorities, and he would adopt them; Joan was the adviser and she knew what she was doing. He kept the agreements, paid things when they were due, and got out of debt. He was a dream client, but this is all true.
Joan was good, like that, she saw her job as getting her clients to see reality first, to escape the fantasy and see things as they really were.
Finding the switch
He was chuffed, she was chuffed, and so were we all. But there’s a bit of a message here, to all of us. It’s not just the numbers, and the bits of paper, it’s getting others to see life through the same eyes, the same window as us.
It’s finding the switch, if you like, that turns people on, and if we can find this we’ve got it made. It’s a bit of a big word, ‘rapport’ and it means a lot of things. It’s a big world out there, and someone has got hopelessly lost, and we are the rescuers. Somehow we’ve got to get into others’ minds, to make them see that we can suggest solutions, we can lead them out of the wild. We are far more than ‘advisers’ we are expert guides, trip leader, the St Bernard finding the victims swept away in the avalanche, and every time we can make you see us this way, then other dreams come true. Happy dreams to all.
Change what you can
If your expenses exceed your income, you have to act now. The longer you leave things the bigger the mess. Don’t use credit or cards to cover shortfalls, don’t leave bills unpaid. Change what you can change, before others force changes on you.
Life involves choices, and choices can be very hard, but that’s life and you can’t have it all. If your house is on fire, you can only take the most precious and most important belongings. Budgeting is a bit like that. You have to be brutal, wield a razor. And most important of all, trust and listen to your rescuer.
Recently my partner and I were lucky enough to find ourselves basking in the glorious sun, sipping cocktails on a beach at a resort called Musket Cove in Fiji. What does that have to do with budgeting I hear you ask? Well quite a lot actually, so read on…
Setting the goal
It all started about 18 months earlier when we set ourselves the goal of a holiday in the Pacific Islands. A big part of goal setting is to set a time frame to achieve your goal, so we set the holiday goal for October 2013 as it was her birthday.
Next we needed to work out how much it might cost us, when we needed to have things like flights and accommodation paid for, and how much we could afford to save over the 18 months. This is where the budgeting came in.
Bagging a bargain
Both my partner and I receive modest incomes and we did not have a lot of savings to start with, so we were basically starting from scratch. We decided we would book the flights first – hopefully they would be cheaper and would arrange our accommodation second, leaving the final savings target for meals, entertainment and the all-important cocktails.
Being a budget adviser I was aware of a tool that we often use with our clients called a cashflow forecast. A cashflow is a way of mapping out your expected income and expenditure over a period of time. It helps you to make sure you have enough money set aside for things when they need to be paid for. I decided that using a cashflow forecast would be a good way to achieve our goal of a dream holiday.
I started filling out my cashflow by entering how much I expected to be able to save every pay period for 18 months, and then when I thought I would need to pay for things. The first time I entered how much I expected to pay for flights into my cashflow, I discovered that I wouldn’t have enough money. This left me with two options. Split the payments and pay for the flights I could afford at the time and pay the rest later. Or delay paying and pay for the whole lot when I did have enough money. I decided to go with the first option and paid for the international flights first and the domestic flights a couple of months later.
With the flights organised I could now concentrate on booking the accommodation and again I referred to my cashflow forecast to see when I could afford this. The cashflow showed me the accommodation would be saved for with 4 months to spare, leaving me plenty of time to save for meals and those cocktails I was looking forward to so much.
She’ll be right…
Now I knew our goal was achievable and so we could set about making it happen, and happen it did. However being a kiwi with a ‘she’ll be right’ attitude I didn’t allow for the unexpected…
As always with budgeting, unexpected things can happen and my cashflow forecast had not allowed for terrible weather in Wellington the day we flew out, which resulted in us having to pay for an extra night of accommodation that I had not budgeted for. I knew we could cut back on a little entertainment on the island and so this wouldn’t be a problem. Lesson learned and if I plan a trip again I’ll include travel insurance in my planning.
If you are planning a trip like I did, or simply want to try and better manage your income and expenditure there is an electronic cashflow plan available for download on this website: www.familybudgeting.org.nz/get-budgeting-advice/budgeting-resources
Andrew is the Assistant Manager and a budget adviser with the Dunedin Budget Advisory Service, motivated by empowering clients to make good financial decisions. He says that although he cannot help everyone with their personal budgeting issues, it makes a really big difference to how successful we can be if the client is willing to engage in the process and be open to suggestions.