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Financial resiliency for people living on low income: A practical perspective*

27 November 2019
Author: Jyothi Venkatesh
In his thought provoking article ‘Put down the self-help books, resilience is not a DIY’, Michael Ungar [i] debunks the popular perception that resilience can be self- taught. Through practical examples, he shows how resilience depends more on what is around an individual than within an individual. Nowhere is this more evident than when helping marginalized people living on low income become financially resilient.

Financial resiliency and financial empowerment

People living on low income have difficulty adapting to adverse changes in their financial condition, which could be due to lack of basic financial knowledge as well as inability to take appropriate decisions owing to low self- confidence. Applying knowledge to bounce back from adversity is resiliency and financial resiliency comes from financial empowerment. This is, ideally,  where community agencies step in to provide information, training and coaching services to low-income people, so that they gain the required skills to be financially empowered.

Building resiliency through empowerment  programs

Across Canada, there are many community agencies that conduct programs to financially empower people on low income. The question remains, are we doing enough? What we observe is that often empowerment programs do not last as long as it takes to observe a client’s behaviours and motivations to then subsequently take corrective action as needed.

Financial empowerment programs typically have two components. The first component consists of imparting financial information or basic knowledge through workshops and the second component involves coaching clients towards financial empowerment. While workshops occur as classroom-style training, or are delivered online, coaching is about engaging in a client-focused dialogue, facilitated by the coach. This dialogue or coaching conversation relies on powerful questions and active listening, facilitating a discussion that stimulates thinking and behaviour leading clients to make appropriate financial decisions with confidence based on their unique situation. Therefore, for coaching to be truly effective, there has to be a long-term association between the client and the coach. An effective financial empowerment program that creates real financial resiliency could potentially span up to one year.

Coaching interventions for effective program outcomes

The coaching element requires the coach to observe the clients’ behaviours in order to understand their attitudes towards money matters, any compulsive habits, etc. All this information can be obtained by asking powerful yet non-intrusive questions. Eliciting responses from the clients is important to make them aware of potential self-limiting behaviours that may act as an obstacle to financial empowerment. Awareness is the first step towards being empowered. Both of the above steps – observing clients’ behaviours and making them aware – can be achieved simultaneously by having coaching conversations at multiple meetings. This awareness paves the way for clients to gain confidence to make appropriate decisions based on their personal circumstances.

Introducing participants to opening and operating their own bank accounts is a further step towards empowerment. Many community agencies have introduced the program Independent Development Account (IDA), intended mainly for poverty reduction that encourages clients to save by putting away some money in a savings account. IDA also incorporates a matching principle where the agency matches a certain percentage of the amount originally saved by the client. The client is encouraged by the amount of the money they have saved over a period of time. This leads to awareness and change in the client’s mindset.

While IDA is an effective step towards financial empowerment programs, it does not offer clients complete freedom to operate the account and use the saved money at their discretion. The amount goes towards certain objectives as decided by the agency. There may be four to five set objectives such as buying a specific asset, starting a small business, investing in RESPs, etc., which the participants can select as their savings goal. The agency directly pays the vendor once the savings goal is met. In essence, there are limited opportunities for the client to take decisions to reinforce the empowerment attribute, barring of course, the saving habit which is a subset of financial empowerment.

The end goal of financial empowerment is to equip clients with tools to make good decisions relevant to their circumstances, and to build financial resilience. A coach can help by observing clients’ decision-making skills over a period of time.  In order to achieve this, it is important to give clients an opportunity to open an account (such as a savings account or TFSA) in which they not only have the discretion to put in money and withdraw, but also use the saved money according to their set goals. It is in this environment that a coach can observe whether the clients are able to save, withdraw less, delay gratification, or withdraw to spend on important needs. One suggested improvement is that such an account be opened after the first three months of joining an IDA program or immediately after completing the workshop component. A program that lasts one year enables the coach to properly observe the clients and allows them to take corrective actions whenever necessary.


In addition to the above suggestions, coaches could observe the clients’ decision-making skills by giving them a prepaid credit card allowing them to use the card as needed. This would help the coach gauge their money management skills, giving rise to many coaching moments to help them increase financial resilience.

These are practical program ideas that community agencies can implement that will go a long way in empowering clients how to make deliberate choices to increase their financial wellbeing. Thus, they learn to become resilient and respond appropriately when life throws them a curveball.

* This article is inspired by many discussions that I had with my Program Manager, Ms. Noemi Garcia. She is overseeing the process of embedding financial literacy in existing settlement services at North York Community House.
i. Michael Ungar, is a Principal Investigator for the Resilience Research Centre at Dalhousie University, in Halifax. His article on resiliency was published in Globe and mail

North York Community House (NYCH) is committed to building strong, vibrant communities – serving over 20,000 residents in northwest Toronto every year. We help transform lives by working with people, understanding their needs, and supporting them in achieving their goals. For over 29 years, we have been opening doors for new Canadians; supporting youth, parents and seniors in becoming active, engaged citizens; and creating opportunities for residents to improve their lives and lead positive change in their neighbourhoods.

NYCH works in partnership with Prosper Canada on the Financial Literacy for Newcomers project.



Jyothi Venkatesh has a decade of experience working as a financial literacy trainer with non-profits. Currently she works as a lead coach for North York Community House

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