ING Bank in Australia becomes Way Forward’s newest member, deepening its commitment to support customers who need help addressing their financial hardship.

Through the membership, ING will work with Way Forward’s team of Hardship Advocates to refer relevant clients to its free service. The bank will also make donations to support the work Way Forward does to help Australians struggling with debt.

Way Forward CEO David Berry said: “Since landing down under, ING has always brought a breath of fresh air to Australian banking and customer service, and we’re thrilled to have them on board. Way Forward is a member-based organisation and without the support from organisations like ING, we couldn’t keep going.”

“Through our work helping hundreds of Australians around the nation, we know many reasons lead to financial difficulty and it can really happen to anyone. And we know many Aussie households are welcoming 2022 with money worries weighing heavy on their mind.”

“This is why it’s more important than ever financial institutions find effective ways to assist customers through solutions that deal with debts across all organisations the customer owes money to. Together, we can address the whole sum of the problem debt, not just a part of it.”

ING Australia’s Head of Retail Banking András Hamori said: “At ING our purpose is to empower our customers to get ahead. We’re very mindful however that many Aussies are indeed struggling with their day-to-day financial commitments, especially after a particularly tough couple of years with the COVID-19 pandemic. We know that no one intentionally gets themselves into financial hardship and overcoming it can be difficult without the right support.”

“Way Forward’s unique skills and experience in supporting Aussies in financial hardship will complement ING’s existing initiatives to support customers through tough financial times.  We know banking and finance can sometimes feel complex and hard to understand, which is why we actively try to make the overall banking experience simple and easy, so our customers can focus more on the things that matter to them.”

“This exciting partnership with Way Forward is the perfect way to further support customers affected by financial hardship who are doing it particularly tough. Our focus is helping them get back on track financially so they can feel empowered once again.”

BNPL world-leaders Afterpay and Zip join Australian debt solutions charity Way Forward to better support customers in financial hardship

Way Forward today announced Afterpay Limited (ASX: APT), a global leader in Buy Now, Pay Later (BNPL), has become its newest member. Afterpay joins a leading list of members that includes Australia’s biggest financial institutions, all cooperating with Way Forward to assist Australians struggling with debt.

This announcement coincides with Zip also joining Way Forward, making both the first BNPL companies to partner with Way Forward.

Way Forward CEO David Berry commented: “The BNPL revolution, led by Afterpay, has completely changed how millions of Aussies pay and think about budgeting. But this dizzyingly rapid pace of change means education and industry cooperation must continue. Therefore, we are thrilled Afterpay has joined Way Forward so we can work towards these common goals as a united front.”

“At Way Forward, we help more than 600 Australians reach long-term, dignified pathways towards a debt-free life. Looking at our data, we expect client numbers, amount of debt and creditors to continue to rise as we open up our economy. During this time, industry cooperation across traditional institutions and fintech innovators like Afterpay will become more important than ever.”

Afterpay Co-Founder and Co-CEO Anthony Eisen added: “The Afterpay story has always been about disrupting traditional finance for the benefit of customers and helping them find a new way to pay. We’re proud of the responsible spending rules and consumer protections that are built into our service. The average purchase on Afterpay is around $150, and the average amount that customers have outstanding is around $200.”

“For customers who do need additional support, Afterpay offers a generous and accessible hardship program where flexible payment timelines with no additional fees or cost can be agreed upon. Furthermore, Afterpay does not rely on customers to drive revenue, as most of our revenue comes from merchants.”

“We take our commitment to supporting customers seriously and partnering with Way Forward is another important step in providing additional assistance to the customers who need it. Financial hardship is complex, stressful and unique to every individual’s circumstance so working with their team of hardship advocates will truly complement the services we already offer to our Australian customers,” Eisen added.

Way Forward CEO David Berry continued: “We’re very thankful that Afterpay has chosen to join forces with Way Forward. We encourage other BNPL companies to follow suit and start membership discussions with us to better support Australians struggling to pay their bills.”

Way Forward is pleased to welcome Panthera Finance as its latest member, with their customers who have debts across multiple lenders now able to access our free service. 

Way Forward CEO David Berry said: “Experiencing financial hardship is a significant burden for many. We welcome Panthera as a member of Way Forward as an avenue for those struggling who need assistance.” 

“We’re looking forward to working with Panthera’s customers to help them achieve a debt free future.” 

“Through its membership, Panthera has demonstrated support for its customers who need advocacy to address their financial hardship.” 

“We thank Panthera for their commitment to address hardship and supporting their customers who are struggling to pay off their debts.” 

“Working alongside our members, we hope to continue to build effective partnerships with creditors to help us with our goal of putting clients first. Without our members, Way Forward would not exist.” 

Panthera Finance’s Simon Offord said: “This partnership will provide Panthera customers experiencing financial hardship additional assistance in getting their finances back on track.” 

“Panthera’s membership with Way Forward will give our customers access to a team of experts who have dealt extensively with creditors in negotiating better outcomes and more realistic repayment plans for clients.” 

“Way Forward’s unique service offers support from our hardship advocates who negotiate with creditors on behalf of people who are struggling to pay multiple debts.” 

“The last 12 months have been particularly challenging considering impacts to household income and economic uncertainty as a result of the COVID-19 pandemic. However, Way Forward has continued to work hard to negotiate repayment plans with creditors to ensure the people we support are on their way to becoming debt free.” 

 

We have put together a list of tips for managing your money that may be useful in achieving financial stability.

1. Have a plan – a budget.

Budgets are rarely something that people regularly look at but what they do is help you understand what you’re spending your hard-earned money on and to set some boundaries for how much you allocate to your various expenses. Preparing a budget shouldn’t feel overwhelming, there are many templates out there to help you create something that works for you.

For example, our free budget planner is a great starting point. If getting into specific details with your spending feels too difficult, you can simplify the process by listing those things you are currently spending money on and allocate general amounts as a guideline to better understand your expenses.

Next, you could set up different accounts for specific purposes. This could be to having a specific account for automatically paying utilities bills, or one for groceries and general expenses, and one for savings.

As a general set of guidelines, ensure that your budget includes the following:

• Income and expenses
• Money coming in needs is more than money going out
• Expenses is personal – so look at how to determine your needs versus wants
• Pay first for the things you need
• Use the money left over for the things you want
• Keep in mind that small expenses (i.e., takeaway coffees) build up over time so a coffee a day, over the course of a year can add up to over $1,000.

2. Pay down your loans

Even though we need to borrow money for those larger purchases like a house, starting a business or otherwise because most people don’t have the resources to buy these things outright, it’s important to work out whether it’s critical to borrow for those smaller things that you might be better off saving to purchase later. For example, borrowing money to buy household white goods is something that you might be better off saving up to buy once you have enough money for it.  This includes buying things that will be paid for later i.e., Buy now pay later schemes.

If you do borrow money for something, try to pay down loans faster than the schedule.

A general rule is borrow for things that can have the potentially to appreciate (grow) in value – i.e., a home, education, a business and avoid borrowing to fund ‘lifestyle’ purchases.

3. Pay off credit cards

Most credit cards attract high interest rates. If you can avoid paying interest on these, it will save you money. Before you take out a credit card, work out how much you will pay in interest if you go into debt on these and whether it’s worth it.

4. Credit scores matter

Credit scoring is important because this can determine the availability and terms of credit you can access. Read more on credit scores and credit reports here.

5. Get assistance when you need it

It can be tempting to dig upwards out of a hole but admitting you are struggling to make repayments on any of your loans is critical to dealing with an issue before it becomes too overwhelming. If you are in financial hardship, it’s important to ask for help early. If you are struggling to pay off your debts, talk to your bank about what they might be able to do. If this isn’t helping, speak to a financial counsellor through one of the many financial counselling services. If you meet the criteria for Way Forward, we can assist you. The sooner you get assistance the sooner you can remove those stresses from your life.

6. Borrowing money always has obligations and risks – including By Now Pay Later

Borrowing money in any form is a type of loan, which carries risks. This includes buy now, pay later. It may seem on the surface to be interest free loans, but if there is an issue with meeting the obligations that are set out in the terms and conditions you may be subject to fees that can make a simple purchase expense. As these loans are much smaller, it can be easy to lose track of these payments and you may end up borrowing more than the funds you have available. The National Debt Helpline have useful information on their website about Buy Now, Pay Later.

7. Be wary of scams

The nature of scams is varied and can be anything from an unexplained inheritance to hacking bank accounts. More information about scams is available at Scam Watch, which is a service provided by the Australian Federal Government.

8. Have a regular savings plan

Savings take time but it’s worth it. This is the most important buffer to help you if you ever encounter unexpected expenses. Some ideas for how to build savings are to set up a special account where money is automatically transferred each fortnight/month once you reach pay day. This means you won’t see it coming out, but you will know it is there if you ever need it.

9. Build your wealth over time

The basic principles to building a nest egg of any size is that savings are key – putting aside more than you earn. All savings count, whether they are big or small. Borrowing money for things that will appreciate over time rather than for items you may not need is important so working out if something is a ‘need versus a want’ can help to determine whether you should borrow or save.

 

We have drawn inspiration from Brad Burnett, Financial Literacy – 9 things a college student should know

 

By David Berry, CEO Way Forward

Way Forward launched its service in 2018 to assist people in long term financial difficulty who have debts across multiple creditors. 

Two years ago, we announced at the national Financial Counselling Australia conference that we were opening our doors to referrals from financial counsellors.

Since then, we have regularly on-referred clients to financial counsellors, particularly, people who are experiencing a more complex situation or the needs of the person is best supported by a financial counsellor. 

Compared to financial counselling, Way Forward has a specific focus, which means our service is suitable for only certain situations. This means we require the clients we support to have regular income, debts across multiple creditors and employment. More on this is included below. 

This means Way Forward supports financial counselling programs, with each offering a unique service to people in financial hardship. We look to financial counselling services to assist people who have complex needs and draw on their expertise in a range of areas. 

For financial counsellors, Way Forward is another tool in their financial counselling toolbox, providing a free option that is not available elsewhere. 

Who can we help? 

It is essential that we match the person seeking support to the right type of service. When we work with someone, we look at all their debts in assessing their situation and determine how much they can repay. We focus on helping clients with their unsecured debt but will consider their secured debts in any plan. 

The people Way Forward are most equipped to assist are: 

• Struggling with multiple creditors 
• Have a regular income and are not heavily reliant on Centrelink benefits 
• Want to pay their debts back in an affordable way 
• Do have surplus funds available after paying for living expenses 

The issues that Way Forward cannot assist with are: 

• Statute barred debts 
• Full debt waiver 
• Family violence 
• Bankruptcy 
• Financial Abuse 
• Gambling 

People who require wrap around services and support, such as those struggling with drug, alcohol or gambling addiction are best supported first by specialist services with the right expertise. We have a range of referral options listed on our website. 

How can Way Forward help? 

We develop an arrangement with our clients that address all of their debts across multiple lenders. We then work with those lenders to come up with a repayment plan and assist the client through managing the payment process to all their creditors. As our arrangements typically go for 2-5 years, we assist our clients by: 

• Confirming a workable budget which includes a buffer. 
• Negotiating a realistic payment plan with creditors/lenders. 
• The client makes one payment to us that we then distribute to all creditors. 
• There is no cost for clients to use Way Forward. 

Whilst clients may need to look at reducing their discretionary spending, it is important that people can live their lives while paying off a debt. We advise our clients that allowing for a regular buffer in their budget will assist for unexpected expenses that are likely to occur over the term of their arrangement. 

Should they not want to allow for a buffer we encourage them to put that amount in a separate account and make lump sum payments to reduce their debt throughout the term of the arrangement. 

If someone has secured debt (e.g., a mortgage) we will provide options for where and how they could get support. We are also happy to connect clients to other organisations that may be better placed to assist them. 

Our arrangements are flexible and allow for both changes to payment amounts and additional lump sum payments. First, the client needs to let us know their desired change and we test the feasibility of the change to the payment with the client to determine the impact.  If it is suitable, we can facilitate the change. Arrangements are negotiated over a term aligned to the client’s circumstances. 

How can Financial Counsellors refer to us? 

There are three ways that financial counsellors can refer their clients to Way Forward: 

1. Working side by side with the financial counsellor. The financial counsellor does a full case assessment and works alongside the client: Way Forward supports by managing the creditors. 
2. Handover to Way forward. The financial counsellor does an initial assessment and budget and hands over the client and their budget to Way Forward. 
3. Keep you in the loop. The financial counsellor refers a client to Way Forward. Way Forward does a full case assessment to determine whether they meet our criteria, we will review the client’s budget, send out letter of authority and keep the financial counsellor in the loop. 

Sending a completed budget is a great way to help us quickly identify options for the client (moneysmart.gov.au), keeping in mind that everyone needs a savings buffer. We buffer $50 a week for unexpected expenses so please add this into the budget.