#talk money practitioner workshop - money management make the gains tangible visualising / anchoring

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  • #Talk Money Practitioner Workshop - Money Management

    David Mahon Citizens Advice|@CitizensAdvice

    @FinCapStrategy #TalkMoney|#FinCap17

  • Objectives for this workshop

    U S

    • To share knowledge and experience of the different needs and attitudes of clients when it comes money management

    • To be able to explore evidence (from MAS) and experience (from us) with regards to money management

    • To be able to share best practice that increases motivation to act and change behaviour

    Skills and


    Habit and


    O U R C L I E N T S

    • To explain and train how to manage money more effectively

    • To change behaviours and move from intention to reality

  • Our approach today




  • Confidence line

    • How confident are you to support and guide your clients to understand how to manage money more effectively?

    • How confident are you to change the behaviours and habits of your clients and move them from intention to reality?

  • The Financial Capability Model

    Current Wellbeing

    Longer term financial security

    F I N A N C I A L W E L L B E I N G

    Managing money well day-to-day

    • Managing credit use

    • Active saving

    • Keeping track

    Managing and preparing for life events

    • Building resilience

    • Working towards goals

    F I N A N C I A L C A P A B L E B E H A V I O U R S

    F I N A N C I A L E N A B L E R S & I N H I B I T O R S


    Savings mindset

    Financial confidence

    Considered spending


    Financial numeracy


    Digital engagement Financial engagement



    Source: Measuring financial capability – identifying the building blocks: Understanding what drives or inhibits consumers’ financial wellbeing and resilience - An in-depth analysis of the UK November 2016

  • New modelling allows us to identify consumers with different needs

    The overwhelmed comprises those scoring

    0-6 for numeracy (Poor and Low numeracy)

    and 0-6 for confidence in using numbers and

    represents around 1 in 5 of working-age

    adults in the UK.

    This is the group that struggles the most with

    financial capability, which, when compared

    with the Over-confident who also have lower

    levels of numeracy, confirms the positive

    effect that confidence can have.

    The over-confident group comprises

    those scoring 0-6 for numeracy (Poor and

    Low numeracy) and 7-10 for confidence in

    using numbers. This represents more than a

    quarter of working-age adults in the UK.

    Whilst in general this group does better than

    those with similar numeracy but lower

    confidence, there are some areas where

    over-confidence may be putting them at risk

    of worse financial outcomes.

    The self-assured group comprises those

    scoring 7-10 for numeracy (Moderate

    and High numeracy) and 7-10 for

    confidence in using numbers. Nearly

    half of working-age adults in the UK

    (48%) fall into this category. They may

    still have some numeracy issues but

    they are doing the best of the four

    quadrants in terms of financial

    capability outcomes.

    The need a confidence boost group

    comprises those scoring 7-10 for numeracy

    (Moderate and High numeracy) and 0-6 for

    confidence in using numbers. This is the

    smallest quadrant – only representing 7% of

    working-age adults who, whilst they have the

    numeracy skills to have good financial

    outcomes, may need to have their

    confidence boosted, as they do

    not do as well as the Self-assured.



    11.1m working-age people in the UK



    19.7m working-age people in the UK



    7.4m working-age people in the UK

    Need a confidence boost


    2.9m working-age people in the UK

    Higher Confidence

    Lower Confidence

    Higher Numeracy

    Lower Numeracy

    Source: Adult numeracy and financial capability, November 2017

  • The Skill/ Will Model Higher Will

    (Confidence and engagement)

    Lower Will (Confidence and engagement)

    Higher Skill / (Knowledge, ability and mind-set)

    Lower Skill / (Knowledge, ability and mind-set)

    • Teach and train

    • Reduce risk

    • Manage constraints and obstacles

    • Provide tools

    • Give ongoing guidance

    • Coaching to explain

    G U I D E • Communicate trust and recognition

    • Develop stretching goals

    • Set objectives but not method

    • Broaden responsibilities

    • Collaborate on decisions

    • Don’t over manage

    E M P O W E R

    • Give specific directions and clear explanations

    • Identify motives

    • Develop vision of success

    • Structure quick wins

    • Train and coach patiently

    • Provide frequent feedback and close supervision

    D I R E C T • Give something to get excited about –

    vision or goal

    • Identify reason for low confidence/ will

    • Develop intrinsic motivation incentives

    • Monitor and provide recognition

    • Reinforce positive behaviours

    • Encourage

    M O T I V AT E

    Source: Adapted from Situation Theory by Kenneth Blanchard and Paul Hersey

  • Our clients

  • Which Step Have You Reached Today?

    Our Goal

    I won’t do it

    I can’t do it

    I want to do it

    How do I do it?

    I’ll try to do it

    I can do it

    I will do it

  • Background Divide into 3 groups based on summary score of Active saver, Manages credit and Keeps track


    Look for what specific behaviours and

    enablers/inhibitors move people from:

    Top 25%

    Middle 50%

    Lowest 25%

    For two people in the same financial situation (i.e.

    tenure, income, work status, age, social grade, sub-

    segment etc.)

    Source: Managing money well day to day (budgeting) Deep dive

    ▪ Middle 50% to Top 25%

    ▪ What moves someone up the middle 50%

    ▪ Lowest 25% to Middle 50%

  • Managing least well


    Improving day to day management

    Confidence and self efficacy

    Engage more actively – think in terms of pots of


    Be more averse to using credit

    Develop saving mindset & save regular amount

    Engagement and attitudes

    Managing best

    Considered spending

    Seek money advice / compare products

    Non-impulsive spending

    Develop saving mindset & save regular amount

    Source: Managing money well day to day (budgeting) Deep dive

    Don’t just keep track in your head – this isn’t enough on its


    Careful use of credit – not using short term credit

    Self efficacy

    Budgeting techniques

  • Ideas and examples

    What things work for you? What examples should be added

  • At a glance…..

    ■ High volume of information extracted

    from clients

    ■ Presented in a way that goes against

    the grain of normal human behavior

    (50+ lines of data, all spends PCM)

    ■ Under used as a practical guide to

    money management

    How much is my weekly shop?

  • • Set up direct debits and standing orders for payday

    • Set up a separate bills account

    • Use cash • Check balances • Keep a spending


    • Keep a separate pot for these or use your separate account

    • Set up a standing order to transfer an amount to save

    Easy: 3 actions not 50+

    salience: personalised

    Similar others: tips passed on from previous clients

    Budget Summary – Page 1

    To pay for regular payments you need

    £1,615 / month

    To pay for everyday expenses you need

    £681 / month

    To save for expected one-off costs you need

    £381 / month

    Your regular payments: • Mortgage • Car finance • Child care • Your IVA payment (£177)

    Your everyday spends: • Food • Petrol • Lunch money / school


    Your one off costs: • MOT/Tax/Car repairs • School uniform/clothing • Christmas/birthdays • Dental/medical costs

    Pay bills on time Make money last until

    payday Save for expected

    one-off costs

  • 10

    Commitment: checklist

    Commitment: active

    Salience: Personalised Meaningful spending breakdown

    Budget Summary – Page 2

    Pilot clients maintain consistently higher payment rates over the first 6 months

    There was a 33% reduction in ‘preventable’ non payment reasons in the pilot group

    The average % uplift in payments made on

    time is 9%

    Your individual payments, costs and saving guide

  • How behaviour change works