Bankers have left their offices where they do their day-to-day calculations and have dressed up their teacher clothes. I teach the Romanians to learn how to better manage their budget. We also participated in such a training, organized by BCR , looking for the interactive financial education course for two and a half hours. Conclusion: Nobody played with the mobile phone, all the participants stayed until the end.
Starting in 2016, the credit institution started a training program in which Romanians learn how to balance income and spending, to have money and to fulfill dreams. The report made within the BCR agency was presented under BankingPetruchio Number 1.
Romania ranks last in the European Union in terms of financial education. I know the banks, I feel on their skin and the Romanians who have taken credit and can not support them. Others can not plan their spending so that they can get their money from one salary to another.
BCR , our largest creditor, has already become an important player on the financial education training market, and for some time, more precisely last year, it organizes the Seif – Money School courses, which is also the name of the support what the students have, which was done with Disruptivethinking. Courses target all age categories. There are kindergarten trainings where basic knowledge of financial education is taught, adults are being trained to explain how to organize and manage their personal budget, and in the future, the bank will also go to teenagers.
March was the month BCR dedicated to its parents, bearing in mind that with children the family expenses also increase and the finances need to be managed more carefully. The target of the bank was listening to the radio station Itsy Bitsy, who was able to sign up on the radio site, where there is a banner pointing to BCR’s offer. I took part in one of the training sessions, organized in a BCR branch in downtown Bucharest, to see how the students receive this type of information and what the experts explain. In the evening, 10 adults, most couples and single mothers, came to listen to the explanations of the trainers, employees of the bank who volunteered to prepare the Romanians.
The waste of money, the main problem
Courses are organized at a round table that encourages participants to interact. They took a place next to a lady who accompanied her husband and asked her what made her take part in the training. He tells me he’s managing his finances badly. It would not be a problem for the money, because it would have to put aside, but it just does not get chirping from one salary to another. “Our husband heard about courses and we signed up. I honestly, initially I was a bit against. I thought he would show us how to deposit our money at the bank. My mother had a term deposit and withdrew less money than she deposited, so I would not agree to keep my money in an account. But then we said we should go, “my mother says. From time to time, I am told, they are borrowing from the credit card they have been in for several years, though I know it’s an expensive loan. They have two young children and would soon want to buy a land. That’s why he should put a ban on it, but it’s hard to manage. Finally, they make plans for the future, like any family.
While we talk, the course starts. Two trainers, Angelica Niţă (Angi) and Cătălin Farcaş, branch coordinators within BCR , are trying to co-opt the students from the beginning, asking them how they would define financial education. Betty, one of the mums who came to the class, says she sees her as a way to learn how to manage your money. In a more elaborate form, that’s the idea of the professionals. Financial education implies “to help monitor expenditure and revenue, to monitor on a long-term basis, integrating them into a financial plan that also aims to achieve goals,” says trainer Angi Niţă.
A recent study shows that 85% of the Romanians’ education is made in the family, 9% through the school, and 6% in the banking system. ” BCR would like to increase this percentage, regarding education in banks”, completes the BCR trainer. Statistical data show that Romania is Europe’s last in terms of financial education and 124th out of 140 countries worldwide, it complements this.
Are you a fortune battery or on the contrary?
To know where you start with financial education, it would be necessary first to evaluate your own situation. And for this, we are going to a new stage of the course, where trainers ask the newcomers to calculate the difference between accumulations and debts. The headings for each good or debt category are passed to the course holder, but each has problems when they have to evaluate their assets.
It is the first difficult exercise … In the category of accumulations, explains the trainers, the deposits are past, the market value of the house, even if taken by credit, the market value of the car, the money everyone has on the card, such as jewelery, art objects, etc. Debts include bank credit, insurance costs, etc.
“We want to see the average value of each and where you should be,” says Angi Niţă, the BCR trainer. The terms in the course support of BCR sometimes raise problems for learners. For example, when it comes to debt, the term fidejusor appears. Learners find out that they can be debtors even if they are not the direct beneficiaries of a loan, but they are guilty or are fiddlers in a loan agreement. “For example, when the husband makes a credit to the firm, and you guarantee that credit with your own property. In this situation you are a fiddler, “explains Angi.
After everybody has accumulated accumulations and debts in the course support, the trainers ask them to make the difference. Subsequently, learners are given a formula asking them to calculate their net personal value. The formula includes age and gross annual income, hence resulting in the net value of each student. The calculation method was developed by Thomas Stanley and William Danko in the book “The Millionaire Next to Us”, and the result will be a radiograph of the financial category in which each person falls. “If the resulting net value is twice as big as the difference between accruals and debts, then you are a prestigious wealth accumulator,” says Angi. But if the net value is less than half the resulting difference, then you’re a sub-battery of wealth, completes the trainer. The societies give a beating to the students, who have filled in with each pencil the pencil. It is difficult, especially when it comes to correctly assessing personal belongings. It’s not a problem, because everybody can resume calculations at home, using the same course support, advised the two employees of BCR. Even the trainer’s calculations at the beginning have raised problems, Angi acknowledges.
Rule 20 – 50 – 30
No matter what financial category you are, the goal must be to manage your finances well in order to meet your goals. And for that, finance specialists have already developed rules that can help us. A rule of personal finances says 20% of income should go to savings, 50% to basic needs, including food, clothing, utilities, and 30% to meet wishes. If money is not enough, an objective should be to increase revenue, recommends Angi, the BCR trainer.
Not only inadequate incomes are the problem, but perhaps exaggerated spending. The most important thing is to keep track of your expenses. But according to surveys, Romanians are doing the worst possible here: most of them keep records of spending in mind, some on paper and the least on an Excel document. Everyone would be surprised at the ease with which he is willing to spend on things that are not necessary or not so necessary, says Catalin Farcas.
The trainees find themselves in the trainer’s words. “We had a period of keeping an Evidence on an Excel document, and I saw how much I love myself as I put on clothes, shoes, but I did not spend less,” she tells her personal experience. Ciprian, another trainee, intervenes with a similar experience. “Basically, the 20% that I should put aside does not exist, because I always earn less than I should.” One over the other, so far, they have been deprived of the determination to put aside a ban, but a first step towards change was through the fact that they came to the course. “You have the option of leaving here and doing nothing, forgetting that we have met, or trying to improve your personal finances” – adds Catalin Farcas.
The best recommendation for those who spend compulsively is to put an amount aside, into a savings account or other savings product as soon as you get the money, Angelica Niţă recommends. “This way you will not walk to them and you will not spend without measure. If you propose that you put something aside from yours, then surely nothing will remain “, adds the trainer.
Money Flow Analysis
So everybody has found, more or less, what financial category they are in, needs to be seen and where improvements can be made, the lecturers suggest. Follow the second point of the course, referring to “Liquidity Flow Analysis”. On the BCR course, there are other fields in which students are asked to go through this monthly and yearly income and expenditure.
“It’s just an exercise, you certainly do not have all the data now, you will repeat this exercise at home,” says Cătălin, the BCR trainer. Everyone is in a position to discover that part of the money is wasted and does not fall into the category of necessary expenses.
But why is it important to know our cash flow? “Because we have some goals to be fulfilled, be it spending on raising and educating children, retirement, real estate investment, usually all together,” says one of the trainers.
Course support also includes a heading with financial targets, and learners are asked to score with numbers from 1 to 10 in order of importance, 10 being the most important and 1 least important.
A horizon of time has to pass over each goal. Some are more important to reach this year, or within five years, others less important, so they can be postponed for a longer period, even over ten years.
Among the objectives are: buying a house, reducing financial debt, buying a car, holidays, changing jobs, buying a holiday home, savings for financial independence (and here trainers recommend to have money set aside to cover the need for living for 3-6 months if an unpleasant event occurs or the person concerned is left out of work), childbirth, life and unemployment insurance, education fund for children, money for setting up a firm.
Each goal must have been passed on to it and the amount to be allocated to it. Summarized, all these costs must not exceed one year the difference between revenue and expenditure, as is normal. After the calculations show that although some goals seem now important, they must be abandoned because they outweigh the financial possibilities, say the trainers.
Is it absolutely necessary to take credit?
As a rule, the trend of those who spend over opportunities is to resort to credit, even for expenses that are not necessarily necessary. BCR’s course support includes the brochure “Do you know what credit is? Find out what you need to know in the Responsible Loan Guidelines. “
“We had clients who read the booklet and made the decision not to make a loan because they were not ready,” says one of BCR trainers. There are a lot of recommendations in the brochure that talk to customers not only about the costs involved in a credit, but also how they can check if a loan is more convenient than the other, in terms of cost. “You do not have to look at the interest, but the total payment, you see the real cost,” says Cătălin Farcaş, the BCR trainer, who recommends students to read what they write in the brochure before they access the loan – a recommendation end of course.
Angelica Niţă also adds some tips that the students have probably met, but which, in practice, can generate serious savings. Here are some of these: never to go hungry to shop at the supermarket, “pay first yourself” – that is, you are considering your own goals, perhaps to put aside money for various investments, before you start spending.
On the other hand, “when you do not want to spend too much it’s good to get cash out of the card and pay with cash, because when you pay with the card you do not realize how much you spend,” Angi Niţă recommends.
Your personal budget, a homework theme
There are the tips with which the trainers have completed the course, as interactive as possible. Throughout the training no one has played with the mobile phone, all the participants have remained until the end, although the course has lagged far beyond the announced time frame.
Course support, very stubborn, at first glance, and unparalleled in an hour and a half, the time spent on training, has remained study material for home. But there is only one meeting that trainees have with trainers, in which many concepts can not be taught. So, what remains untold can be studied at home – this seems to be the premise from which BCR trainers started.
In total, BCR proposed to organize free courses for 30,000 students in March, with 300 trainers in the project, the target per trainer being the counseling of 100 trainees. Courses are held in branches, especially in the central areas of the largest cities in the country, and are free of charge. Because there are many applicants, instead of a weekly course, as it was the rule, the bank began organizing two, Monday and Thursday.
BCR also addresses companies that are part of the client, offering free courses to their employees. The bank also organizes kindergarten trainings. In the future, she will also develop a module for teenagers, but with an online program, starting from the premise that this support is best suited to young people.