Helping you to reduce stress and build a happier and more financially-secure future

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www.educatorsfinancialgroup.ca THE KEYS TO FINANCIAL WELLNESS Presented by: Karen Hubbard, CFP Moderated by: Bruce Sellery

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  • w w w . e d u c a t o r s f i n a n c i a l g r o u p . c a

    THE KEYS TO FINANCIAL WELLNESS

    Presented by: Karen Hubbard, CFP Moderated by: Bruce Sellery

  • The Keys to Financial Wellness

    Meet your moderator

    Founder of Moolala (a personal finance training company)

    Bruce Sellery

  • The Keys to Financial Wellness

    Meet your subject matter expert

    Financial Planner CFPEducators Financial Group

    Karen Hubbard

  • The Keys to Financial Wellness

    About the webinar

    Will I be able to get a copy of the slides after the webinar?

    Is this webinar being taped so it can be

    viewed afterwards?

  • The Keys to Financial Wellness

    STRESSED?

    Does the topic of money make you

  • The Keys to Financial Wellness

    Our financial wellness agenda

    What is stress? How to deal with the top three

    financial stress factors:- High debt levels- Low savings- Lack of financial literacy

    Q&A/wrap up

  • The Keys to Financial Wellness

    Ice breaker

    What isSTRESS

    The Keys to Financial Wellness

  • The Keys to Financial Wellness

    Common symptoms of stress

    Increased anxiety Extreme mood swings (irritability) Inability to cope (feeling loss of control) Chronic fatigue (even after excessive sleep) Inaction (due to feeling so overwhelmed)

  • The Keys to Financial Wellness

    There are several contributing factors, however were going to focus on the top three:

    1. High debt levels

    2. Low savings

    3. Lack of financial literacy

    What causes financial stress?

  • The Keys to Financial Wellness

    1. Communicate: Open the dialogue about money with your spouse and your Educators financial specialist.

    2. Plan: Get your head out of sand and come up with a plan to get a handle on your money.

    3. Care: Take care of your physical and mental health.

    The keys to financial wellness

  • The Keys to Financial Wellness

    HighDEBTLevels

    How to deal with:

    The Keys to Financial Wellness

  • The Keys to Financial Wellness

    Main cause: - Spending more than you make

    Risks: - Inability to pay bills on time- Damage credit rating- Bankruptcy

    Stress factor 1: high debt levels

  • The Keys to Financial Wellness

    Types of debt: the pros and cons

    Vehicle Pro Con

    Personal Loan Set payment term Can be paid off anytime

    Higher rate of interest

    Credit Card Low minimum payment Revolving limit

    High interest rate Can have debt for life

    Line Of Credit Revolving limit Can be paid off anytime Like a low-interest

    credit card

    No set payment term Can have debt for life

    Mortgage Set payment term Lowest borrowing rate

    Pre-payment restrictions Long amortization Not easily refinanced

  • The Keys to Financial Wellness

    Stop paying high interest rates

    =The average department store credit card charges 20%

    The average bank credit card interest rate = 14%

    Educators Financial Group 5-year mortgage rate = 3.04%

    Consolidating high-interest debt into your mortgage can help you become debt-free faster.

    The average line of credit interest rate = 8%

  • The Keys to Financial Wellness

    Chart out your debt strategy

    Strategy VISA Loan PLC Consolidation

    Balance $10,000 $25,000 $15,000 $50,000

    MonthlyPayment

    $300* $506.91 $470.05 $920**

    Interest Charged 19% 8% 8% 4%

    *Monthly payment is 3% of balance. **Based on an Educators line of credit (in partnership with Teachers Credit Union) at a 4% interest rate and paid out in 5 years.

    Combined monthly payment: $1276.96 Save: $356.96/mo.

    Consolidating the various high interest rate debts above into one lower rate monthly payment has the potential to save you $21,417.60 in interest over the duration**.

  • The Keys to Financial Wellness

    Accelerate your mortgage payments:

    Look for more ways to save

    *Over the duration of the mortgage based on a $200,000 mortgage at a 5-year fixed term/25-year amortization period and a 4% rate.

    Payment Strategy

    Total Mort.Payment

    Interest/Time Saved*(Over life of mortgage)

    Slow and steady(Regular)

    $1,052.00(per month)

    None

    Accelerated $526.00(bi-weekly)

    $16,849.00(plus 3 years off amortization)

    Accelerated +(Add $180)

    $706.00(bi-weekly)

    $53,826.00(plus 11 years off amortization)

    Turbo charged(Add $180 + $5,000 annual lump sum)

    $526.00(bi-weekly)

    $72,513.00(plus 15 years off amortization)

  • The Keys to Financial Wellness

    Take control take action

    Stop paying high interest rates Consolidate high-interest debt if possible Increase amount/frequency of payment(s) Round up payment to nearest $100 List all balances from highest to lowest

    - Record interest rates for each debt- Pay the highest rate with the lowest balance first

  • The Keys to Financial Wellness

    You can do this by: Always paying at least the minimum payment

    on time

    Never exceeding your credit card limit

    Minimizing the number of credit applications you make

    Use your card regularly

    Protect your credit rating

    Keep tabs of your credit rating online:www.equifax.ca and www.transunion.ca

  • The Keys to Financial Wellness

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  • The Keys to Financial Wellness

    Stress factor #2

    savings

    How to deal with:

    The Keys to Financial Wellness

  • The Keys to Financial Wellness

    Main causes: - Other financial commitments(pension contributions, day-to-day living expenses)

    - No budget in place- Frivolous spending- Low cash flow

    Risks: - No emergency fund- Potential to keep using credit- Possible pension income gap

    Stress factor 2: low savings

  • The Keys to Financial Wellness

    By first understanding where your money goes:

    Road to savings: where to start?

    Net Income

    Day-to-dayexpenses

    Debt repayments

    Surplus/Shortfall

    Retirement pension plan(OTPP/OMERS)

  • The Keys to Financial Wellness

    Start by penciling in your budgetMonthly Net Income(after pension contributions) $3,000

    Monthly ExpensesMortgage/Rent $1,220Food $500Cable/Internet $85Insurance $150Student Loan $200Entertainment $250Misc. $300Income Minus Total Expenses $2,705

    Use our Go Figure calculator online to figure out your budget: www.educatorsfinancialgroup.ca

  • The Keys to Financial Wellness

    Set your savings goals

    Do you want to: Create an emergency fund? Travel a few times a year? Take advantage of a Deferred Salary Plan? Purchase a home/pay down your mortgage? Save for childrens

    education?

  • The Keys to Financial Wellness

    Putting away just $100 a month with 5% growth:

    Start saving then watch it grow

    Compounding Amount Actual Monthly Contributions

    2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034$0K

    $10K

    $20K

    $30K

    $40K

    $50K

    $60K

    2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034$0K

    $10K

    $20K

    $30K

    $40K

    $50K

    $60K

    $6,000$6,808

    $13,200$17,503

    $58,801

    $30,000

    Source: Go Figure calculations based on $100/month contributions at 5% growth.

  • The Keys to Financial Wellness

    Dont cut cut back:

    Think before you buy:

    Spend smart:

    Reduce spending

    Set yourself limitations reduce trips to mall/online spending

    Ask yourself why? do you really need this or simply want it?

    Spend in positive ways that contribute to improving your health and wealth

  • The Keys to Financial Wellness

    sessionThe Keys to Financial Wellness

  • The Keys to Financial Wellness

    How to improve your

    FINANCIAL

    The Keys to Financial Wellness

  • The Keys to Financial Wellness

    Stress factor 3: lack of financial literacy

    Did you knowAccording to the Canadian Council for Learning, only 50% of adult Canadians are financially literate.

  • The Keys to Financial Wellness

    Learn about educator-specific challenges

    Education-specific item Learn how to

    OTPP / OMERS pension Minimize potential income gaps Navigate pension income

    fluctuations Manage cash flow challenges

    Gratuities Minimize tax implications

    Summer time Optimize cash flow (i.e. Summer Freedom mortgage)

    Deferred Salary Plan Develop a plan for DSP while minimizing the income pinch

  • The Keys to Financial Wellness

    Tap into free resources such as

    Workshops and webinars Our quarterly newsletter, Insights Online through The Learning Centre Regular eNews our email communications Free one-on-one financial

    planning sessions

  • The Keys to Financial Wellness

    sessionThe Keys to Financial Wellness

  • The Keys to Financial Wellness

    Create your budget (i.e. use our Go Figure online tool)

    Determine your financial goals

    Take advantage of our free educational resources (i.e. sign up for The Learning Centre and eNews)

    Call us/visit us online: 1.800.263.9541,www.educa to rs f i nanc ia lg roup .ca

    Homework

  • The Keys to Financial Wellness

    1. Communicate: Open up the dialogue about money with your spouse and your Educators financial specialist.

    2. Plan: Get your head out of sand and come up with a plan to get a handle on your money.

    3. Care: Take care of your physical and mental health.

    The Keys to Financial Wellness

  • The Keys to Financial Wellness

    DisclaimerThe information provided is general in nature and is provided with the understanding that it may not be

    relied upon as, nor considered to be, the rendering of tax, legal, accounting or professional advice.

    Attendees and readers should consult a financial planner and their own accountant and/or legal advisor

    for specific advice related to their circumstances. Educators Financial Group will not be held

    responsible or liable for any losses, costs, damages or expenses incurred by reason of reliance as a

    result of the aforementioned information. The information presented was obtained from sources that are

    believed to be reliable. However, Educators Financial Group can not guarantee their completeness or

    accuracy. Commissions, trailing commissions, management fees and expenses may all be associated

    with mutual funds. Please read the simplified prospectus before investing. Mutual funds are not

    guaranteed, their value changes frequently and past performance may not be repeated.

  • The Keys to Financial Wellness