This unit may be applied within the context of a financial counselling role or educational programs facilitated by financial counsellors or financial institutions within the context of improving consumer financial literacy.

ELEMENT

PERFORMANCE CRITERIA

1. Assist customer to identify financial goals and priorities

1.1. An understanding of the customer's financial situation is gained through discussion and interview of the customer

1.2. Customer is assisted to identify short, medium and long term financial goals that are specific, realistic and achievable

1.3. Financial priorities are identified and agreed upon with the customer and take into consideration all aspects of the financial situation

2. Discuss the purposes of developing and implementing a personal budget

2.1. Budgeting as a means to planning for the payment of regular and irregular expenses is discussed with the customer

2.2. Budgeting as a savings and behaviours and skills required to implement and monitor the budget are discussed with the customer

3. Assist customer to develop a budget

3.1. Customer is assisted to identify and list all income and expenditure for a relevant period of time

3.2. Regular and irregular items of expenditure are established and projected over a future period with a surplus or deficit financial situation identified and discussed with the customer

3.3. Allocation of surplus funds towards meeting identified financial goals is encouraged to the customer

4. Provide ongoing assistance to customer

4.1. Budgeting tools are provided to the customer to assist in developing own personal budget for monthly and annual periods

4.2. Strategies and tips for implementing and managing personal budget and finances are provided to the customer according to their needs

4.3. Ongoing review of the budget by the customer is encouraged to ensure it remains relevant or is updated if necessary

Required skills

communication skills to:

clearly explain budgeting concepts to customers and customers, using questioning and active listening as required and respondingwith empathy in sensitive cases

liaise with others, share information, listen and understand

use language and concepts appropriate to cultural differences

interpersonal skills to establish rapport with customers and remain impartial in discussing budgeting options

numeracy and IT skills to:

calculate income, loan costs and repayments

accessand use appropriate software such as spreadsheets and databases

use internet information

literacy skills for:

analysing information and budgeting techniques to ensure appropriateness to customer or customer needs, currency and accuracy

drafting documents for customers and customers

problem solving skills to identify any issues that have the potential to impact on the customer or customer's budgetary understanding and use and to develop options

organisational skills, including the ability to plan and sequence work

Required knowledge

principles of budgeting and other strategies to manage income and expenditure

principles of lending and credit

relevant industry codes of practice and legislation including:

Consumer Credit Code

Credit Act

Judgement Debt Recovery Acts

Privacy Act

relevant State and Territory legislation regarding consumer credit issues

roles and relationships between participants within the Australian financial services industry, including banks and other financial intermediaries

the economic environment

The Evidence Guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.

Overview of assessment

Critical aspects for assessment and evidence required to demonstrate competency in this unit

Evidence of the ability to:

provide practical and relevant assistance to customers in developing personal budgets in order to better manage their finances

use high level communication and interpersonal skills for explaining and demonstrating the purpose and use of budgets

maintain up-to-date knowledge of basic savings and investment strategies useful in the achievement of short, medium and long term financial goals.

Context of and specific resources for assessment

Assessment must ensure:

competency is demonstrated in the context of the financial services work environment and conditions specified in the range statement either in a relevant workplace or a closely simulated work environment

access to and the use of a range of common office equipment, technology, software and consumables

access to financial services product information.

Method of assessment

A range of assessment methods should be used to assess practical skills and knowledge. The following examples, in combination, are appropriate for this unit:

evaluating an integrated activity which combines the elements of competency for the unit or a cluster of related units of competency

observing processes and procedures in workplaces or role plays

verbal or written questioning on underpinning knowledge and skills

setting and reviewing workplace projects and business simulations or scenarios.

Guidance information for assessment

The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.

Financial goals may include:

accumulating a set amount of money by a specified date in the future for the purposes of:

purchasing assets

financing holidays, educational expenses, home renovations and other known future expenses

establishing a deposit for an investment such as a home or investment property

aiming to repay existing debts and be debt free

establishing a regular savings plan

handling income and expenditure responsibly and avoiding financial difficulties.

Budgeting refers to:

budget showing all projections versus actual income and expenses for the period developed, implemented and monitored

calculation of all projected income and expenditure for period of time (e.g. over a weekly or monthly basis).

Behaviours and skills required for successful budgeting may include:

controlled spending

disciplined approach to money

organisational skills

record keeping skills.

Income and expenditure may include:

income:

interest on investments, dividends

proceeds from sale of assets

social security benefits, pensions, allowances, child assistance

wages, commission, bonuses

expenditure:

insurance

living expenses such as:

food

clothing

rent

medical

loan repayments such as:

personal loans

car loans

credit card debts

Higher Education Contribution Scheme (HECS)

miscellaneous expenses such as:

gifts

tobacco

recreation

entertainment

mortgage repayments

rates

travel costs including:

petrol

public transport

utilities such as:

water

gas

electricity

telephone.

Budgeting tools may include:

budget worksheets for planning for payment of future expenses

savings plan.

Strategies and tips may include:

how to use credit card debt effectively

information on minimising fees and charges

strategies to curb impulse buying

ways to cut back on spending or modify negative spending habits.

Unit sector

Financial literacy

This unit contains employability skills.