The New KOHO App Will Help You Get Your Finances In Order

Posted on: February 26, 2020

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The New KOHO App Will Help You Get Your Finances In Order

This video episode is about helping you get your finances in order and introducing you to a new powerful budgeting and savings app from KOHO. The app has a very unique way to help you save money on autopilot. KOHO is a new digital bank in Canada.

Richard Today we are going to be talking about getting your finances in order. I’m going to introduce you to a new powerful budgeting app, from KOHO, K O-H O. Did I get it right?
Sylvie That’s right.
Richard Which is new, it’s a new digital bank in Canada. Now, my guest and the girl I’ve been talking with is Sylvie Pukitis. Did I get it right?
Sylvie Pukitis, but close.
Richard Sorry, I want to say I for some reason. Okay, Pukitis, sorry Sylvie, I know I asked you that before, but at my age, I forget things very quickly. You’re a financial coach with KOHO. Sylvie has been an investment analyst with some major corporations and a financial planner, and now, with KOHO a financial coach. She helps people take control of their budget and hit their financial goals, basically. So, Sylvie, welcome to The Glass Is Half Full.
Sylvie Thanks for having me, appreciate it.
Richard Now, I’m going to want to find out all about KOHO in a minute. But first, I’d like to find out exactly what a financial coach is? That’s what you do, financial coach?
Sylvie Yeah.
Richard And, people might have some weird ideas. What’s the difference between a coaching planner and adviser, and all that? So what can you tell us is the basics between a financial coach and say, financial advisor, financial planner?
Sylvie For sure. So I’d say the biggest differences between a financial planner or coach and a financial advisor, and that’s because as a financial planner or coach you’re essentially helping people manage their money and giving them an unbiased financial plan on things such as how to tackle their debt or how to save up for retirement or potentially creating a budget, but you’re not actually managing their investments. So traditionally a financial advisor’s job is to buy and sell investments that basically help someone with savings achieve their goals. Whereas financial planning, you’re not touching that, it requires a lot of regulation, and you have to be part of an IIROC regulated firm, so it’s just a little bit different. The other thing is how you’re paid. So generally, financial planners or coaches are fee-for-service. So a flat fee, either based on the service or based on the number of hours you work. And it keeps it unbiased, you’re not selling products. So you’re not paid a commission. And, whereas a financial adviser, you’re generally paying a percentage of however much of your assets they’re managing.
Richard So a financial coach isn’t telling people what to do with their money, it’s telling people how to do with their money. That it?
Sylvie I would say, yeah, you could say that. So, we would touch everything up to actually the investment. But we could say, you know, Richard based on what your goals are, and your financial picture looks like, pretty simple. I think you’d be best off with an online investment platform. You know that needs keep your investments in there for 10 years and they will tell you exactly what to invest in. But I think that would help you achieve your goals versus I’m not taking your money and buying and selling stocks, in that sense.
Richard Yeah, and of course is, as such, there’s no manipulation of money that way, just basic fundamentals, basically, right? Where you’re teaching people how to manage money without being specific as to where to put it.
Sylvie Yeah, that’s exactly right. It’s the goal is to help
Richard With some exceptions obviously. Like if you, if you thought that would be a good idea, that I would get an RRSP, for instance.
Sylvie Yeah, I can tell you what accounts. So whether it’s a savings account or an RRSP or what order to tackle your debt, but wouldn’t go beyond that other than, say, why don’t you look at these institutions? I’m unbiased. I think they’d all be good options for you.
Richard Right. I think that’s pretty clear. Now, in my business, and we’ve talked about this before Sylvie, the main thing I see of people, they get into financial trouble, is the inability to control their credit card debt. Right? Now, a lot of people have a hard time with this obviously, this is not new. Everybody has some difficulty with it to some extent. But, some of the things that they run into, things and getting in trouble, is the interest rates they pay, is the type of credit cards that they’re using, they get kind of drawn in by certain offers and things like that. Do you help them with this?
Sylvie Yeah. We try and basically help them understand what they’re spending sort of personality or tendencies are. And then, based on that, figure out what financial products would work best for them. So a common thing that I see specifically when I’m working at KOHO, is that people have in the past used credit cards and to your point, without sort of a hard limit on how much you can spend, you can end up overspending. And, they all come to KOHO and they’ve actually decided, “You know what? I need to start tackling my credit card balance and I can’t use it anymore”. So they’ll put their credit card, for example, in their drawer or someone that I know, got rid of their credit cards and they started using KOHO because it’s a cash account like a chequing account where you put money on it and you can’t go beyond that limit. And so that works for certain people if they want a preload their budget or put their paycheque into an account where you can’t spend more than you have, and you actually start to get in the hang of living, you know, having more control over your money. So that’s one thing. But if there’s something else that might suit their personality a little bit better, we’ll certainly look at that and figure out what the best way for them to organize their finances is.
Richard That sounds an awful lot like a debit account. Right?
Sylvie Yeah, it so it’s very similar. Essentially, it’s just like a debit account, but it’s running on the network of Visa, which means that you can use it wherever credit is accepted, so, if I went to the cash register and someone asks me what form I’m paying with, I would say credit, but it’s really my KOHO chequing like account. The nice thing about that is that you can use it online, and you get a 0.5% cashback for all of your transactions. So it’s not as high of rewards as a credit card, but it’s better than a debit card.
Richard But you actually have a card.
Sylvie That’s right. I really find the
Richard As far as the rest of the world is concerned, it looks like a credit card?
Sylvie Yeah.
Richard So, you go to Walmart, they say, “How are you paying?”, you say credit, whip out this particular card and you’re essentially operating, in a very very different way, but on the same lines as the Master credit cards.
Sylvie That’s exactly right. And I think people, the industry has changed so that the people are so used to using credit that they feel almost ripped off if they’re not getting any rewards. So that little bit of cashback helps. And then ultimately, if you look at the numbers, often people will spend about 10% to 15% less when they’re using a KOHO or a debit card. So think of that, like a 10% or 15% difference, and that’s a really awesome reward. If you flip it that way and think about your rewards coming from actually having more savings just because you’re not
Richard Like making 10% to 15% interest?
Sylvie Exactly.
Richard Is it hard for people who get the hang of this?
Sylvie I would say, in the sense that because Canada has five really entrenched banks, it’s hard for people to sort of wrap their heads around using anything else. What we see is that often people will start small. So one of the things that I do is help people set a budget, which would be, you know, look at your income, what are your bills and then your savings or debt payments? And then whatever’s leftover is kind of your personal spending money, which is usually the hardest to control. So they might start by this putting that on KOHO, or they might even start smaller, saying, “It’s going to be my card for restaurants and entertainment”, and they put on, say, $300 month, and they kind of get the hang of it that way. And then I think once they, you know, we haven’t talked about it yet, but there’s an app that’s associated, that basically tells you in real-time where your money has been going and how much you have left and also some little ways to stash away change. So once they get the hang of that and see themselves in someone that’s more in control and maybe actually saving a bit, then they will put more spending on to it. But it certainly there is friction, like in Canada especially, people don’t really want to change financial institutions.
Richard Really? Canadians are conservative. How about that?
Sylvie Exactly.
Richard I’m intrigued by KOHO itself. It’s a new bank, right? And it has features that you just mentioned here, I’m just reading it, apps, various other forms of assistance, they are giving people for their investing and whatnot, but no branches, unlike a traditional bank, it’s not, it’s not a visible bank. You’re offering the same services basically, like a regular bank?
Sylvie Yeah, for the most part, so we’re not, so KOHO itself isn’t actually a regulated bank, but what we do is we, we left, we partner with a bank out of Vancouver called People’s Trust that actually holds the funds. And then we’re the, you know, the institution that basically moves the money. So, for example, if something were to happen to KOHO, you basically have a People’s Trust bank account, that’s insured, and your money wouldn’t be going anywhere.
Richard They are regulated by the Bank Act, and all that, right?
Sylvie That’s exactly right. So, that’s just to address that, but in terms of everything else, for the most part, it’s the same. You can send e-transfers, pay bills, do whatever you like to do. If you want to pay your credit card bill, you can do that. You can take cash out of an ATM, although we don’t have our own ATM, so you would be charged, whatever that out of network fee, that you probably experienced, when you need to get cash and you’re ATM isn’t right there, but for the most part, and we’re continually updating features, so I’m sure if we talked again in a year or so, we’d probably say, “Yep, we do everything”.
Richard I probably will talk in a year or so. I’m reading the list of things that some since offered here. There are no fees for the card.
Sylvie No.
Richard This is a fee less process, as far as that’s concerned, it’s prepaid as you said?
Sylvie Yeah.
Richard You actually load up the thing, like you would a regular bank account if you’re using a debit card and no interest, obviously, you’re not borrowing any money, and then you got 1% rewards. Why specifically 1% here? Before you mentioned 10% or15%, that kind of thing, are we talking about different things?
Sylvie I think so. That’s, I think, just, it’s not 1%, it’s 0.5% on everything. Or if you are signing up for something called KOHO Premium, you get 2% on groceries, restaurants and eating out and then transportation. And that is where there is a small fee. So, basically, for people that spend, the break-even is about $600 a month on those three categories that I just mentioned. You’d actually be better off with this premium service where you get 2%, but you pay $9 a month. But for the bare bones and what most people start with its free, no fees and get 0.5% cashback.
Richard Yeah. How do they receive these rewards? You said, just cashback. What happens?
Sylvie So on your, on your app, you would see your account balance, and then you see the cashback that you accrue and then it accrues basically immediately.
Richard By a transaction basis.
Sylvie Yes, so you might see that you have $20 in cashback and then you can actually just cash it out, and it goes into your balance on the card.
Richard So your balance just went up to $20.
Sylvie Yeah.
Richard Not every bank does that.
Sylvie Well, usually it’s once a year.
Richard Well, that’s interesting, but it’s a question of visualizing all of this.
Sylvie I know
Richard It sounds a little different, right?
Sylvie I should have brought with me my card because they’re these funky two-toned cards, and you can actually pick the colour that you want. They all have a kind of fun and personality behind them. So I have blue and kind of iridescent silver. But you can get lots of different colours and then, yeah, the app I can even, I know people if it’s audio, can’t hear this, but or see this, but you can see the app kind of shows your balance, and then there are different savings features, including your power-ups is the cashback.
Richard Flip it around a little bit.
Sylvie Oh, there we go.
Richard Sometimes they
Sylvie (Screenshot)
Richard Sometimes the writing doesn’t show up there, anyway it doesn’t matter.
Sylvie Yeah.
Richard They get the gist of it.
Sylvie Yeah, it’s kind of tech, it’s a techie feel.
Richard Very 21st century-ish, right?
Sylvie Yeah, that’s what we go for.
Richard Cutting edge. And I guess the other thing that comes to mind is, how usable is this? Is this the kind of thing that you run into problems with? Places saying, “What is this?” Being doubtful about being able to use this?
Sylvie So it’s, the adoption is pretty great by merchants because what they see is, just all they see is, prepaid Visa, and that’s accepted nearly everywhere. Not if it’s a debit, only merchant, then you wouldn’t be able to. What else? I guess
Richard It’s where people accept credit cards, right?
Sylvie Yeah, exactly right. A couple of things to be mindful of his, when you’re travelling, where it’s actually accepted worldwide, but sometimes, you know, as with most cards, if you’re in different countries, sometimes it doesn’t work, so I’d always bring a backup one. And also, you know, when you book a rental car or a hotel, and you might have to put down a deposit, say $500, the funny strange thing about prepaid Visa, sometimes that actually goes through as an authorization where it would say, okay, you just spent $500 and it will go away, but you have to wait a couple of days. So, when you’re renting, when you’re putting down a safety deposit, usually we’d say don’t use a prepaid card. Well, I use it all day, every day, for all my transactions. We have a free joint account too, so I use that, using Apple Pay and pay everywhere, I don’t have problems.
Richard There’s no, very little problems and no negative feedback, kind of thing?
Sylvie Yeah, we’re lucky. Now, I feel like the base of the payment just come so far, right? Dollarama even accepts credit cards now. I used my card yesterday there.
Richard Now, I know from experience that getting people to get the gist of budgeting and be able to impose this, the disciplines and self-discipline involved in, in the proper or successful budgeting which they do. It’s a tough road at home. People, if this hasn’t been inculcated into them when they’re children, don’t grow up with that kind of attitude towards money, it’s a learning process, and a tough one for some people. Some banks offer budgeting, online budgeting help, things like that. But you have an app we’ve been talking about.
Sylvie Right.
Richard What I understand, this takes it to a new level. Can you explain the differences? So, where your app differs from the others? Go ahead.
Sylvie So, I would agree with you that budgeting is generally a feared topic. And honestly, we don’t love the word either, but it does resonate with people. But if you kind of think of, like, why do people budget, usually the kind of things that come to mind are, one, to control your spending and spend within your means and two, to actually save or start putting away money towards, maybe it’s your payment plan to pay off a consumer proposal.
Richard I’m glad you mentioned that.
Sylvie So yeah, but I’d love to get, we’ll get into later. But in terms of controlling your spending, I would say the people that love KOHO the most, is people that, as I said before, we’re just using credit, and they’re finding that they can’t get their balance down there in the red every month. So when they switch to using KOHO, either for their whole paycheque or just that fun, a discretionary budget, then they have guardrails. So basically, when the money is gone, it’s gone, and they just basically have a hard stop for them. And of course, that sounds pretty abrupt, but the nice thing about the app is that it shows you, like I was saying before, where your money is going. So say you set a budget for $100 a month on eating out and entertainment. You could go into the app and check here, is called the Insights, and see, I’ve spent $75 this month. Like this is where I’m at. We don’t have it yet where you could set a budget, and then it would give you a hard stop. But that’s something that we’re hopefully going to come out with next year. So
Richard That might be embarrassing.
Sylvie Not a hard stop at the merchant, but just like a little notification or something, because I agree. But so that’s going to enter,
Richard Like a very prominent red flag.
Sylvie Yeah, you have to keep your dignity. Even if you’re nothing, no one can budget in a straight line. Life doesn’t happen that way.
Richard This program is about anything, it’s about dignity.
Sylvie Yeah. Most people, they start using it, they feel in control of their spending because there’s, their credit card balances not going up anymore, and that’s the most important thing. And then the flipside is in terms of saving. We have a couple of tools that help you automate your savings because one of the oldest, sort of tricks in the book for saving is, just pay yourself first and automate, and you tend to save twice as much. So, one of them is called Round-Ups, and what that does is, if you bought, say, a $1.75 coffee, it would round up to the nearest dollar, so to $2, or you could set it to the nearest $2, $5 or $10 so it could round up to $5. And then that extra money goes into the special savings pocket, so you don’t see that money in your balance anymore. And so as far as you’re concerned, that money’s not there, but it’s gone into this little savings pocket, and that’s there are also people that just like, they’re new to saving, they’ve never done it at all.
Richard It’s the, in a sense of forced savings, but not quite force. It’s more like an invisible savings model.
Sylvie That’s exactly right. And then you can also set, they’re called savings goals. And so another idea of automation where, say you said, “Okay, Sylvie, I need $400 this month to put towards my consumer proposal”. I would set that goal $400 by the end of the month and then set up when I want to contribute. So, it might be daily, just a couple dollars a day. Or it could be, you can set it to when you get your paycheque so that $400 goes right in there and then again, it’s like invisible savings that you don’t really realize you’re doing. And you wouldn’t believe how powerful that is for someone that’s coming from being in a debt spiral to now, not only not increasing that debt, but then they see they have savings for once in their life. It’s really, really cool to see that.
Richard Now, all banks promote the idea of savings.
Sylvie Yeah.
Richard Most financial institutions promote that idea, somehow or other, but as you said, if you could do it, let’s call them tricks or, you know, the invisible ways to assist a person get into the habits of these things. You can’t do anything but win out of that, as far as the individual is concerned. But, well, you’ve written a number of articles, from what I understand on this whole subject and, the idea of getting through to people that what they can do and to actually do something, right? Now, let’s start with where can they find these articles? Where can they get this information from? And better yet, where can they get your services?
Sylvie For sure. So, koho.ca/learn is where the blogs are, or if you just went home, you googled KOHO and went to the website and then clicked on learn, you’d see the blog. Where we have different, I guess, How To Guides, on different parts of your finances, if you are a KOHO user and you can access financial coaching through this sort of a chat function. I also work outside of KOHO doing one-on-one financial coaching. And so, my company’s called Wild One Wealth, and it’s Sylvie@wildonewealth.com, is where if you wanted more hands-on experience, either in person or on the phone that wasn’t through an app, then you could access it there. Yeah, we’re just trying to, I think the niche is people that, you know, don’t have a ton of wealth, but of course, they would like some support and some help, that’s traditionally been super hard. As you know, that’s what your whole business is built on, you know?
Richard Yes. When people have hit a wall, you talked about earlier, and they have no place else to turn. Usually, when people will come to see us, the vast majority of them, budgeting is not going to be the answer to your problem.
Sylvie No.
Richard They have to take some more drastic steps to get themselves back where their feet are firmly planted on the ground, that’s where you would take over. Is there anything else that you’d like to leave people with, Sylvie, because we are just about running out of time?
Sylvie Yeah, I would say, just as you said, it’s so overwhelming to feel like your finances are in disarray. But honestly, the best thing you can do is just not be hard on yourself, whatever situation you’re in, you’re definitely not the only person in that situation. We all go through ups and downs.
Richard It’s never too late to start.
Sylvie Yeah, just start. And, you know, don’t be afraid to ask for help. That’s what people like you and myself are here for, you know, you can change it. Debt is just a number that you can you’re in control of and that you can change.




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