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, AMP
Moderated 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 Sum
Payment
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
*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
Turbo charged + $526.00
(bi-weekly)
+ $180
(= $706 bi-weekly)
+ $5,000
(per year)
$72,513.00

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
Monthly
Payment
$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.educatorsfinancialgroup.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?

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