CatholicCare’s financial counsellors: ‘Plan for the bad times’

By Jordan Grantham, 14 September 2017
Counselling. Photo: Wikimedia Commons

CatholicCare Social Services – Diocese of Parramatta provides Financial Counselling in Blacktown, Parramatta, Emerton and Springwood.

Financial difficulty can affect anyone and often emerges during common difficulties.

Marriage breakdown, a death in the family, unemployment, physical and mental illness are all financial pressure points that often leave people vulnerable if they do not plan or have a clear understanding of their finances.

The financial counsellors at CatholicCare Social Services – Diocese of Parramatta have experience helping clients from all walks of life, from low to high incomes.

“I have wealthy clients who overcommit,” Vinh Bui, a financial counselor, said.

“One was misled by a financial planner and spent all his fortunes on wrong businesses. I also have a wealthy medical professional who later in life lost his career and marriage due to mental illness,” he said.

“I had a client who could have been very comfortable, but instead was in hardship due to the number of credit cards (and loans) he had obtained and used to the max,” Gianna Marzi, financial counsellor at CatholicCare Blacktown, said.

Low financial literacy and a culture of instant gratification cause bad financial habits in Australia. The counsellors say not understanding interest rates on credit creates a financial downward spiral and is also a problem.

Gianna said that the financial system emphasises “using credit, the push towards instant gratification, showing only the happy side of credit and not the possible negative consequences.”

“People do not realise the effect of interest rates, especially in credit cards. People do not realise that ‘gold stars’, gold cards and platinum cards do not mean that they are good, valued customers of a bank. It only means that the annual fees are higher!”

“People still believe in the benefit of being loyal to a bank. This is only marginally helpful, if not at all, when things go wrong,” she said.

The power of interest is also clear with short-term loans.

“There are loan sharks, payday lenders who exploit vulnerable clients with irresponsible lending practices and interest rates, which could be over 50% a month,” Vinh said.

A common theme of financial counselling is the importance of a contingency plan for bad situations, such as illness, unemployment and family breakdown.

This could involve having an emergency savings account, income protection insurance or an understanding to share accommodation with other family.

Vinh suggested asking yourself what you would do in an emergency to develop a contingency plan.

“If I cannot pay the mortgage – what happens?” Vinh asked.

Contact CatholicCare Social Services to receive financial counselling or call 02 8843 2500.

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