April 2020 Newsletter: Pro Bono Financial Planning Case Study: A Successful Intervention

Below is a case study I wrote for the United Way to demonstrate the value of a program they operate here in Edmonton. This is a true story – only the name of the program participant has been changed.

If this type of work is interesting to you, we have a regional initiative operating in the Edmonton area. The next training for this session is tentatively scheduled for June 22 and 23, though I would not be surprised to see this rescheduled given our required social distancing.

In the longer term, we are also building national resources to support this type of pro bono financial planning. If you are interested in either, please email me at jason@businesscareercollege.com and I’ll put you on my list of interested parties.

Note: Financial Coach, in this context, refers to a qualified financial advisor or financial planner who has attended Prosper Canada’s training program. These coaching engagements often bridge the gap between social work or other therapeutic engagements and financial planning.

Cindy (not her real name), a program participant at CALLS (Community Adult Learning & Literacy Society) recently completed the EmpowerU financial literacy program. Near the conclusion of this program, Cindy identified to her program facilitator that she was in financial distress, and in danger of losing her home to mortgage foreclosure.

Due to both Cindy and her spouse experiencing disabilities at nearly the same time, there was significant financial distress. As a result, the CALLS coordinator, who was aware of the financial coaches that were made available to EmpowerU programs, contacted Karina Hurtado at United Way Capital Region to ask if a financial coach could be located.

Karina was able to book a financial coach to meet with Cindy. Cindy showed up to the meeting very well prepared. She had learned from the EmpowerU program. She had a fully developed budget. She understood both her income and expenses.

The household was at risk, though. Cindy’s and her husband’s concurrent disabilities had caused them to miss some mortgage payments, incurring several thousands of dollars of penalties, fees, and interest charges. Cindy had a plan, approved by her lender, to pay these off. She was in regular communication with all her lenders and had negotiated payment schedules.

Cindy’s acute awareness of her budget, which included no extra expenses, revealed that she will have a monthly shortfall for at least the next 3 months. The financial coach was quite impressed with Cindy’s awareness of her financial situation, and the degree of diligence and effort she had demonstrated.

An in-depth examination of each of Cindy’s sources of income and expenses revealed that she did have a small amount of medical expenses each month, mostly attributable to dispensing fees. Cindy was still covered under her employer’s benefits plan during her period of disability. The coach was able to ascertain that Cindy’s Health Spending Account (HSA) was still in force, and that there was unused money there.

During the meeting with the coach, Cindy placed a call to her benefits plan administrator. The administrator was very helpful. Cindy had ample information and was able to ask detailed and thorough questions. The end result is that Cindy has had enough medical expenses over the past two years that she can submit a claim to use her HSA to recover enough money to cover her budget shortfall over the next few months.

The coach gave Cindy four pieces of homework and will book a follow-on meeting with Cindy to address longer-term issues. In the short term, though, Cindy was able to use the tools from EmpowerU and the free financial coaching to solve what seemed like a desperate problem.