are you prepared for any sudden changes to your financial situation?

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

BE PREPARED:

Presented by: Michael Spohn, CFP and Toni Sutter, AMPModerated by: Bruce Sellery

Educator-specific financial solutions for uncertain times


Mrs. Murphy told her hubby that the last time it rained, the kitchen ceiling started leaking. Mr. Murphy told his wife to “relax”, the forecast called for sun all week and

he’d definitely take care of it on the weekend…

The Murphys: a quick story


Murphy’s law:

If the forecast calls for sun and you have a leaky roof, you can bet it’s going to rain.


Moral of the story: rainy days are going to come. Be prepared.


Be prepared: today’s forecast

• Planning for rainy days(or the unexpected)

• Planning for sunny days(your dreams/goals)

• Homework• Questions/giveaway/

wrap-up


PLANNING FOR RAINY DAYS(aka: the unexpected)

“Some people walk in the rain… others just get wet.”

- Roger Miller


No matter how much you plan…

Life has a way of throwing you financial curves when you least expect it:• Unforeseen expenses

(i.e. car or home repairs, etc.)

• Medical emergencies• Spouse/partner loses job

• Baby on the way turns out to be babies


If you’re an educator…

Financial curves can also come from changes that may result from collective bargaining such as:• Wage freeze• Pension valuation• Pay grid restructuring• Change in sick day policies• Whatever else happens to be

‘on the table’ at the time?


So what do you do if it ‘rains’?

If a financial emergency does arise:• Tap into your emergency fund, if you have one

(i.e. TFSA, other savings account/investments)

EMERGENCIES ONLY

Ah, but what if you don’t have an emergency fund?


There are options available to you:• Low-interest line of credit (through Educators)

In the event of full withdrawal of service:• Interest-free loan (through OSSTF)

• Fast-track loan (through Educators)

No emergency fund?


In a financial emergency, avoid the following:• Racking up credit cards• Ignoring bill payments• Doing nothing

What NOT to do

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


The forecast (or lesson) so far…

Rainy days/emergencies will happen. While you may not be able to predict when or where, your best defense is to put a financial action plan in place so that you’re prepared to handle whatever comes your way.


PLANNING FOR SUNNY DAYS(aka: your dreams/goals)


We already touched upon it in the last section but let’s say it one more time then we’ll move on:EMERGENCY SAVINGS• Peace of mind• Ability to instantly react• No interest to pay• It’s your cash,

when you need it

Reasons for planning ahead


Places to go, people to see, houses to buy – having a long-term savings plan in place can help you achieve your financial dreams and goals:• Travel to exotic destinations• Purchase a home/pay down

mortgage/home renovation projects

• Save for children’s education




Then of course there’s educator-specific reasons for planning ahead:• Alleviate income pinch from taking

a year off (deferred salary plan)• Maximize cash flow during

the summer months• Minimize potential

pension income gaps


Causes: - Financial commitments(pension contributions, day-to-day living expenses)

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

Risks: - Temptation to use credit- Rack up debt

Possible challenges to saving


Accelerate your mortgage payments:

Look for more ways to save

Payment Strategy

Total Mort.Payment

Voluntary Increase

Lump SumPayment

Interest/Time Saved*

(Over life of mortgage)

Slow and steady $1,052.00(per month)

- - None

Accelerated $526.00(bi-weekly) - - $16,849.00

(plus 3 years off amortization)

Accelerated + $526.00(bi-weekly)

+ $180(= $706 bi-weekly)

- $53,826.00(plus 11 years off amortization)

*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.

Turbo charged $1,052.00(per month)

- + $5,000(per year)

$51,302.00(plus 10 years off amortization)

Turbo charged + $526.00(bi-weekly)

+ $180(= $706 bi-weekly)

+ $5,000(per year)

$72,513.00(plus 15 years off amortization)


Stop paying high interest rates

=The average department store credit card charges 20%

The average bank credit card interest rate = 14%

Low-rate line of credit through Educators = 4%

The average line of credit interest rate = 8%

Use our online Debt Calculator to see how much money you could be saving by switching to a low-rate line of credit through us!


The impact of interest rates

Strategy Credit Card Loan Average Line of Credit

Consolidation with Educators LOC

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

Interest Charged 19% 8% 8% 4%

Payoff Date 4 years 5 years 3 years 5 years

MonthlyPayment

$299* $506.91 $470.05 $920.83**

*Monthly payment is 3% of balance. **Based on a low-rate line of credit offered through Educators Financial Group, in partnership with Teachers’ Credit Union, at a 4% interest rate (subject to approval) and paid out over 5 years.

Combined monthly payment: $1,275.96 Save: $355.13/mo.

Consolidating the various high interest rate debts above into one lower rate monthly payment has the potential to save you $21,307.80 in payments over the duration**.


Saving money is possible…

All you need to do is:• Create (and stick to) a budget• Establish timelines for your goals• Take control of your debt/stop

paying high interest rates


What to do with that savings…Share the wealth:• Invest a portion of that savings to

build up your emergency fund• Use a percentage of it to

continue paying down debt• Treat yourself with

what’s left over

It’s a win-win-win situation!


Whatever your financial goals or dreams, with the right educator-specific plan you can make it happen… even during uncertain times.

Sunny days are ahead



Create your budget

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

It pays to do your homework…


Disclaimer

The 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.

www.educatorsfinancialgroup.ca


THANK YOU

are you prepared for any sudden changes to your financial situation?

Economy & Finance