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Cornerstone Credit Union Foundation Board of Trustee Not Surprised to Learn that Mid-year is a Time when Many Evaluate Where they Stand Financially
Friday, May 30, 2014 6:55 AM

Mandy Clayton, CUDE, CCUFC, director of financial education for FivePoint CU and a board of trustee for the Cornerstone Credit Union Foundation, says she is not surprised to learn from the National Foundation for Credit Counseling (NFCC) that mid-year is often a time when many evaluate where they stand financially. 

“This is a time of year when kids are finishing up the school year, and parents are figuring out how to keep the kids busy over the summer. They’re looking at their savings account or available credit to determine if they will be able to take a family vacation or afford summer camp,” Clayton notes.

More than 1.5 million consumers reportedly reached out to an NFCC member agency last year for answers and solutions to their financial concerns around debt, housing, budgeting and bankruptcy. The NFCC has provided a picture of the typical consumer who came to an NFCC member agency for financial counseling in 2013, and following are some of the red flag characteristics of consumers who sought financial counseling from an NFCC member agency in 2013:

  • The number one reason to seek counseling was "poor money management," eclipsing "reduced income," which had held the top spot since 2009. Why a red flag: An improving economy may put more money in people's pockets, but if not managed properly, it can still result in financial distress.
  • The age of the majority of consumers was fairly evenly divided between 25-54, with young adults in the 25-34 age group leading the way (24 percent), followed by the 35-44 range (23 percent), and the 45-54 group (21 percent). Why a red flag: Financial problems can occur at any stage in a person's adult life which, if left unaddressed, can begin a negative spiral from which it can be difficult to recover.
  • The average household take-home income was $35,081, with an unsecured debt of $17,548, resulting in an unsecured debt to income ratio .50. Why a red flag: Owing too much relative to your income resulting in a high debt-to-income ratio not only makes it harder to meet all debt obligations, but can hinder future borrowing.
  • Consumers seeking help carried an average of 5.7 credit cards. Why a red flag: The number of credit cards a person has is not as important as how they manage them. Whatever the number of cards, maxing out the lines of credit will likely harm a person's credit score.

“As financial educator it is my goal to help consumers identify their financial problems so they can fix it,” she says.

Clayton is one of two certified financial counselors at the credit union. She works with youth and adults. In addition to teaching financial education in the local high school and college, the credit union collaborates with Credit Counseling Services of Greater Dallas and Catholic Charities. Between webinars and workshops, the credit union teaches consumers everything from how to create a budget to credit management.

“Many of the people who have gone through one of our financial education programs, or one-on-one counseling are surprised to learn just how much they are spending on the little things,” Clayton notes. “One member, for example, was shocked to learn that he had spent $400 at fast food restaurants in a two-week period.”

“Sometimes, it’s just a matter of changing our habits,” she adds.