Rainy day funding
Campaign seeks to improve financial literacy
A new campaign is raising awareness about the importance of having a rainy day fund in support of Alberta’s financial literacy month.
Unexpected Expenses, based in Calgary and Edmonton, gives participants a chance to win $500 during November for sharing their stories about unplanned expenses they have personally encountered.
“When an unexpected expense occurs, a payday loan may seem like a quick way to get cash, but it’s expensive and often leads to a cycle of crushing debt,” said Stephanie McLean, minister of service Alberta.
After the act to end predatory lending passed in August, Alberta now has the lowest payday loan fee at $15 per every $100 borrowed. However, Unexpected Expenses is raising support for the act’s further proposed changes that aim to introduce fair rules for payday lending by increasing the term in which people can repay their payday loan from 14 to 62 days.
“If you don’t have savings, your credit cards are maxed out or you don’t get paid till next week, do you know how are you going to come up with the money to pay for that unexpected prescription, car repair or visit to the vet?” said Jeff Loomis, executive director of Momentum, a Calgary community organization that addresses issues of poverty and advocates for less harmful measures of short-term credit such as payday loans.
Mclean said she is grateful that groups, such as Momentum and Unexpected Expenses, are encouraging Albertans to save for emergencies to avoid debt traps.
According to Lianna Chondo, a social worker with the City of Edmonton, balancing finances is challenging, but it’s important to be prepared.
“The best plans involve emergency savings, which can prevent stress, hardship and having to make desperate choices,” said Chondo.
In addition to sharing stories of financial difficulty on Unexpected Expenses’ website and social media channels in hopes of winning the daily prize money, students experiencing financial distress can contact SAIT’s Lamb Learner Success Centre to learn more about student loans, grants and other funding opportunities.
“We need to end the stigma of financial challenges because regardless of your age or income, everyone has them at some point,” said Brian Betz, debt counsellor with Money Mentors, an Alberta not-for-profit counselling agency that offers services and programs in personal money.
“Financial literacy is a major issue in our province.”