More than just a budget – financial mentors facing complex issues

Financial mentors are working together with other organisations in their communities as the whānau they support are facing increasingly complex issues.

A survey of financial mentors late last year looked to identify the impact of COVID-19 on the workload of financial mentors and on the whānau they support.

FinCap has released the resulting Impacts of COVID-19 on building financial capability: 2021 snapshot.

The data reveals financial mentors are facing increased pressure because of COVID-19, housing issues and mental health.

Franklin Family Support Services is a wrap-around social service in Auckland which offers financial mentoring.

Financial capability mentor Jacqui Baker says when she first joined the service five years ago, she thought a lot of the work would be budgeting.

Now, her clients have layers of complex mental health and social issues.

Recently, Jacqui has seen more people coming in for KiwiSaver hardship applications and rent is becoming a continuing strain on whānau.

“People don’t have enough to live on and pay for those basic things. The problem’s so multi-faceted – you can’t fix one thing and think it’s going to fix it all,” she says.

“When people are carrying a lot of debt, life becomes hard.”

It’s a stretch for many to pay for basic living costs like petrol, phone, food and internet. Jacqui says clothing is almost a ‘luxury’ for some.

Jacqui says they do a lot of advocacy work for their clients with multiple agencies and organisations.

This is an important part of their work alongside our own internal referral system, as financial mentoring can be especially useful in family violence cases.

Their relationship with the local Work and Income has also been especially helpful.

“It’s important that we can have that relationship with organisations such as WINZ. It’s important that we both work towards helping the client,” says Jacqui.

She says working with microfinance providers like Ngā Tāngata Microfinance has also been essential to help whānau who are struggling with crippling debt, to help make payments manageable.

The debt levels for clients seem to average anywhere between $10,000 and $20,000.

Jacqui has some advice for other financial mentors whose clients may be facing some challenges they’ve never worked with before.

“Do your best to assist them but don’t be afraid of referring on – you might not be the only person who can help them. There’s a lot of experts out there if you’re open.”

A little further south, Waihi Budget Service manager Annette Reddick says their community is also struggling with issues like increasing rents and a higher cost of living.

KiwiSaver hardship withdrawal applications are on the rise, with each application taking up to 10 hours or work.

While they have some good relationships with the local banks, she’s found when people are being asked to work with a financial mentor – instead of it being instigated by themselves – there’s not a lot that can be done to support people.

“We get clients that come in and need the help and will come in and do what they need to do. Then you have the clients that have been told by the bank that they need to come in and see us, but they don’t necessarily follow through on their half of the deal,” says Annette.

As a widower trying to feed four teenagers, she knows first-hand how the increasing rent prices can impact the entire household.

This time of the year can be tough following the Christmas break and forking out for back-to-school costs – she’s looking at an $1100 bill for uniforms alone.

“Expenses are outweighing people’s income so it’s always going to be difficult,” says Annette. The small team of financial mentors and volunteers work closely with other organisations to make sure whānau get the support they need.

This includes working with organisations for food parcels, overdue power bills and even teachers. There’s a local network of budgeting services that catch up regularly to share their learnings.

“We refer onto as many other people as we can whether that’s food parcels, counselling or mental health,” says Annette.

Margaret Elsworth, Annette’s mum and former manager of the service for 20 years, says despite the challenges there have been so many whānau in their community they’ve helped.

Often, people need somebody to listen to them and it’s not unusual to go through half a box of tissues in a session.

“Sometimes that’s all they need to know – that life isn’t a shit show and there are things to feel good about,” says Margaret.

“There’s just so many positive outcomes that we’ve have had and that’s what keeps us going.”

Her advice for financial mentors who are supporting complex cases is simple – talk to somebody.

“The financial mentors need to talk to other financial mentors if they think ‘oh, how am I going to do this?”

She’s says it’s great to see fresh faces coming up in the sector in their region: “they’re doing really, really well”.

Where to go for help

If you’re a financial mentor and you’re not sure how to help a client, here’s a reminder of some of the resources and organisations available to you:

  • Communities of Practice
  • Microfinance providers
  • Dispute resolution services
  • Other social services in your region
  • Commerce Commission
  • Other financial mentors
  • Community Law