Workshop helps teach debt management

Jan. 23, 2009

When Jocelyne Brown gives a debt management presentation, she brings about $7 million in spending power with her.

She can't use the money because it's in a plastic water cooler bottle filled with credit cards cut in pieces.

Brown is the director of education for Credit Counselling Services of Atlantic Canada and was at the Rodd Miramichi River Monday night to give a debt management presentation.

She said a lot of people who go for credit counselling tell her they are hurting financially and can't get ahead.

"They thought that something was going to fix this problem."

Only one person attended the presentation organized through a partnership with the provincial government as part of an initiative to help people conserve energy and reduce both energy costs and day-to-day expenses.

Credit counsellors will deliver 12 presentations across the province throughout the week.

Brown has been a counsellor with Credit Counselling Services for seven years and said a lot of people think they need to be in trouble to benefit from the presentation, but they don't.

"We're talking about prevention."

The first step Credit Counselling Services takes when helping clients is for the service to approach non-secured creditors, like credit card companies or payday loans, to ask for a reduction in interest and payments. Brown said the clients then make their payments to Credit Counselling Services.

"By us negotiating we become their agent."

The presentation's emphasis is on understanding credit issues with explanations of how different forms of credit work, how to budget, the importance of saving for a rainy day and how credit scores work.

Brown gave an example of someone running into trouble with a payday loan that turned a $12,000 loan into about $22,000 once the total cost with interest was figured out over the repayment period.

"If you're putting money into servicing your debt that's taking away from your cashflow," she said.

Brown said a place to live, electricity and food are the three places money has to go first before people spend it on other things.

"We need to know exactly where our money goes."

By budgeting, people can help stretch their money, even though Brown said it doesn't change how much they have available to spend.

"It's about doing more with what we have."

Brown said Canadians should have three to six months worth of living expenses saved in an emergency fund, but the average Canadian doesn't come close to that amount.

"As Canadians we're just not saving."

The last part of the presentation focused on credit reports and explaining how lendors look at credit history.

Brown said people need to look at how much they owe, which is also reflected in a credit report, even though it might also show payments were made on time.

"It's a false security to think that that's health."

Department of Energy spokesperson Bonnie Doyle said Credit Counselling Services does excellent work and have a history of providing good advice to its clients.

"They're a very willing and positive partner."

The partnership was part of the province's new winter heating package with a positive response from the public, she said.

"I think we're gonna see how we go this year and re-evaluate."