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Starting off Right: Getting Rid of Student Loans

By Shaakirah Medford on 05/18/2017 @ 03:25 PM

Tags: Financial Capability

For many, student loans are the daunting after effect that looms over your head once the euphoria of surviving the past four years of all-nighters, midterms, finals and thesis presentations have worn off. In 2014, CFED’s Assets & Opportunity Scorecard reported a national average of $27, 022 worth of debt for students graduating with an undergraduate degree. With loving the idea of traveling, buying a home sooner rather than later and being able to develop a comfortable lifestyle, I have been putting more thought into getting rid of my student loans ASAP (preferably in less than the anticipated 10 years). With this new found goal in mind, I wrote it down and started researching.

Start Sooner, Finish Quicker

While in college, paying off my student loans was literally the last thing on my mind. However, looking back I realized that any little bit that I could’ve paid towards my loans while still in school would’ve helped a lot. Unexpected refund checks from my bursar’s office and even tax return checks are perfect examples. If a student receives a refund check, it is due to your school account having more money than necessary to pay the balance that was due. Whether it be from financial aid, scholarships, student loans and cash payments, you had more than enough money and the check refunds you the excess. Due to the low maintenance lifestyle you live as a college kid, getting an unexpected check is like a second Christmas, but if it is not needed for expenses pertaining to school or emergencies elsewhere, then those funds would be perfect for paying off interest and paying down on the principal of your brand new student loans. Tax Returns can work in the same way.

VITA

Speaking of tax returns, one major piece of information I just was not educated on during my time in college, was the opportunity to get my taxes filed for free. Volunteer Income Tax Assistance (VITA) is a program which offers free tax filing assistance to low-income individuals. This opportunity is great for college students because not only are you able to save money, but the money that you do save and a portion or all your tax return can be put towards your student loans. VITA volunteers can also teach you how to file taxes for yourself, you can become a volunteer and definitely build your resume.

Be Informed

While you are in school, it is the best time and place to increase your knowledge about money management. Take a class or two on finances and even investments. Knowing and truly understanding how to manage and multiply your money are great assets to building your wealth, paying off your loans in the most effective way and developing better spending habits.

Visit your financial aid office: Your financial aid and bursar’s office on campus is filled with professionals who know how your money is being used and what you should do to be in great financial standing with your loans. Ask questions. Ask a lot of questions. They are there for you and you should fully take advantage of being educated by them.

Speak to your loan servicer and stay up to date: Even if you haven’t graduated from college yet, it will only help you to stay in contact with your loan servicer. Make sure that you know how much money you have in loans, the amount of interest attached to each loan, your expected paid-in-full date for each repayment plan and what it will take for you to be on the right track for achieving your personal repayment goals.

In 2012, CFED’s Scorecard reported a national average of 11.8% of students defaulted on their loans. Defaulting not only negatively impacts your credit score, but it makes it harder for other lenders to believe that you are trustworthy enough to be given another loan, whether it be for a mortgage, a car, small business, etc. The Consumer Financial Protection Bureau (CFPB) is suing Navient (a student loan-provider) for not sharing with borrowers the necessary information they needed in order to take the best and most affordable actions in regards to paying off their loans and avoiding outcomes such as defaulting. Learn the difference between income-based and standard payments, forbearance and deferment. Become educated on your loans and have your loan servicer on speed dial if you need to but always be in the know about the money attached to your name.

Tricks

Automatic payments: Depending on your servicer, you can save up to 25% on your payments when you sign up for automatic payments and it is also one less thing you will have to worry about.

Bi-weekly payments: I found out that by splitting your payment in half and paying it every two weeks to your account before your due date, it helps you to save money and you can deduct at least a couple hundred dollars from your loan. However, this only works if you are assigned to the standard payment plan.

Keep your goals visible. I am a firm believer that any goal you do not write down is not a real goal, it is just wishful thinking. Write down your goals, create a vision board, tell a friend and have them hold you accountable, do whatever it is that you need to do in order to make sure you achieve the goal you set out to achieve. Get rid of your loans and finally move on to traveling, buying a home, go back to school without building on top of your old debt, set up things to retire a little earlier and live the life you want to live.

A Few Hundred Dollars Shouldn’t Delay the American Dream

By Kate Griffin on 04/26/2017 @ 12:30 PM

Tags: Financial Capability

Forty-six percent of adults can’t cover a $400 emergency expense.

We throw this number around. A lot. It is one of our industry’s favorite numbers, the number we use when discussing any number of interventions, including the rainy day EITC, financial coaching and alternative credit scoring to name a few.

Setting aside the typical examples – a car repair, an unexpected medical expense or being scheduled for fewer hours by your employer that week – we see that some of these “emergencies” are caused by absurd fines, fees and other costs that come with trying to cope on low levels of income in our society. These “emergency” expenses should not be getting people so far off the pathway of financial well-being.

How is it that a small fine or fee today can delay the American Dream indefinitely and lead to an insecure financial future? Take three examples.

Housing

Matthew Desmond’s Evicted painted a picture of housing instability in America that we had not seen in such vivid detail before. As he writes, one in eight Milwaukee households faced eviction in 2009-2011. And while we typically think of repeated non-payment of rent as the reason forcing eviction, in some jurisdictions eviction notices can be written for as little as $25 or $50 in unpaid rent, or for fines such as walking the dog without a leash.

Furthermore, the eviction record this creates doesn’t discriminate based on the size or scope of the infraction. Being evicted for a $25 overdue fine and being evicted for thousands of dollars in unpaid rent creates the same stain on your record, limiting future housing choices, the stability of families and hopes to move ahead in life.

Education

Completing a post-secondary degree can put someone firmly on the path towards financial security. We know that for low-income families, stretching financial aid dollars to cover tuition, room and board and other expenses can be a stretch. College costs have increased at 4.5 times the inflation rate. While the Pell grant is a substantial help to low-income students, today it only covers one-third of the cost.

While students are stretching as far as they can, many colleges and universities will fine students for infractions such as overdue library books, registering late for a class or disturbing neighbors in a dorm room. If these fines are overdue on a student’s account at the start of a semester, he or she will be unable to enroll in that semester’s classes – meaning not only is the student disrupting their college education, the institution is forgoing the financial aid dollars that would have been spent there that year!

Criminal Justice

Our society’s awareness of egregious fines and fees in the criminal justice system was raised with the release of the Department of Justice’s report on police actions in Ferguson, MO, in March 2015. An estimated 10 million people owe $50 billion in debt resulting from some interaction with the criminal justice system. While fines may be used to mete out punishment for a crime, fees are used to fill local government budget holes. But that goal is not always being met: the Vera Institute reports that the city of New Orleans spent $6.4 million to jail people because of overdue fines and fees while only collecting $4.5 million in overdue fines and fees from the system. In that city, 30% of jail beds are filled with people jailed because they can’t afford bail. Beyond these fees, the bail system also disproportionately affects people without financial cushions. Nationally, one in three people are in jail because they could not afford to post bail and are awaiting trial.

When people are locked up because of these small expenses, they lose time at work they could be earning income (or even lose a job completely), thus further limiting their ability to pay the fine. And, 30 states strip people of their voting rights if they have an outstanding debt to the criminal justice system.

So What Do We Do?

The work that our industry does to help people save for unexpected expenses like these is invaluable, critical work. Programs that make savings easy, automatic and especially with some match will be valuable to ensuring that “emergencies” like these don’t lead to the loss of stable housing, post-secondary education, jobs or voting rights.

But how do we also think about transforming a system where such dire consequences exist for so little money? A few bright spots we are seeing:

  • The City of San Francisco recently launched its Financial Justice Project, which formed a “Fines and Fees Task Force” to build a better understanding of the ways that city fines are impacting its most vulnerable citizens and suggest policies that could reduce the impact. There is also renewed interest in the idea of “day fines,” or fines that are calibrated to the income level of the person being fined. Such programs have been in use in most of Scandinavia and piloted in the US in the late 1980s.
  • The California Asset Building Coalition and their partners are currently advocating in the state legislature for the California Bail Reform Act of 2017. This reform would give judges more information to determine bail amounts and keep fewer low-income people from staying in jail while awaiting trial, at great financial cost to both the state and the individual.
  • Georgia State University’s Panther Retention Program provides students with $1000 or less in overdue fines with a grant to pay off the fine and allow the student to continue enrolling in the school. Since inception, the school has significantly increased its graduation rate, especially among Black and Latino students.
  • The Save for Success Act would reform the American Opportunity Tax Credit, providing tax credit dollars closer to the time when students need them most – as they enroll in college and potentially incur these fines.

As we conclude Financial Capability Month and celebrate the myriad successes we are having with individuals, let’s also continue a parallel discussion of how financial capability can and should be seen as a public good. If the system itself creates and perpetuates situations where a lack of emergency savings can make or break the American Dream, it’s time to change the system.

This April, Join Us As We Work to Put All Families on the Pathway to Financial Capability

By Jennifer Medina and Parker Cohen on 04/10/2017 @ 10:00 AM

Tags: Financial Capability, News

In 2015, President Obama proclaimed April to be Financial Capability Month. Each year since, CFED has embraced this month as an opportunity to reflect on our efforts to help individuals and households build financial capability and traverse pathways toward financial security. Last April, we introduced the Financial Capability Lifecycle, which highlights the universal, expected and unexpected life events that trigger decisions that impact us financially. While these events force decisions at the individual level, they are influenced by many structural and systemic factors, including institutional practices and local, state and federal policies. To celebrate Financial Capability Month this year, CFED is engaged in a month-long campaign to boost awareness about the many factors that influence one’s financial life and about how all of us can play a role in fostering prosperity for more families.

Financial capability is defined as the capacity—based on knowledge, skills and access—to manage financial resources effectively:

  • Knowledge means understanding financial concepts and knowing where to go for support. For example, do I know how to open and use a checking or savings account, or how to create a budget? If my family is interested in purchasing a home, can I locate and attend a first-time homebuyer workshop?
  • Skills means putting knowledge into action. For example, can I make regular savings deposits and track monthly spending? Does my family know how to pull our free credit reports and focus on addressing errors on those reports and reducing our debts?
  • Access means resources—including tools, products and services—are available and accessible to help consumers manage finances effectively.

Of the three elements of financial capability, the access part of the equation is the trickiest. While being motivated to strengthen your financial footing may help inspire you to take action, access to opportunities—including employment, education, homeownership and business ownership—is a significant contributor to a household’s ability to advance economically. When access is limited, demonstrations of knowledge and skills will only take individuals so far.

Let’s take Anna, for example. Anna knows how to open a bank account and set a savings goal, but lives in a banking desert and doesn’t have access to a branch to establish the account. Perhaps she also has a black mark on her ChexSystems report, and as a result, her bank won’t offer her a product that meets her financial needs. Even if she manages to open an account, she’ll likely have concerns about whether saving might affect her eligibility for public benefits. Without access to the right products, services and incentives to save, Anna may continue to rely on costly alternatives, such as check-cashing services or payday loans.

Here’s another all-too-familiar story: The Henderson family wants to buy their first home. They save for a downpayment, clean up their credit and take a homebuyer education class—but struggle to get a home loan due to discriminatory lending practices. Making matters worse, home prices are soaring in their community and most properties are out of reach. Imagine what this might do to their chances of buying a home that appreciates in value and provides an opportunity for their family to build and transfer wealth for future generations.

While many of these issues, particularly barriers around racism and discrimination, are particularly intractable, successful strategies have emerged to tackle aspects of these problems:

  • Bank On coalitions connect unbanked and underbanked consumers to financial institutions that offer safe and affordable financial products and services.
  • As a result of advocacy efforts, nearly all states have raised or eliminated asset limits in at least one key public benefit program (i.e., TANF, SNAP or LIHEAP), removing a huge barrier to families’ ability to save.
  • Organizations are advocating locally and statewide for increased affordable housing supply or are working to advance creative solutions, such as developing or partnering with community land trusts to provide affordable homeownership opportunities.

Given the significance of the challenges—and opportunities—along the pathway to financial well-being, we hope you’ll consider joining our Financial Capability Month campaign between now and the end of April. Here are three easy ways you can get involved:

Thanks for all you do—this month and year-round—to help connect more U.S. families to the knowledge, skills and access they need to build a better life!

Hot Off the Press! New Report Highlights Opportunities to Help Young Workers Thrive

By Pamela Chan and Joanna Ain on 04/10/2017 @ 09:00 AM

Tags: News, Financial Capability, Jobs

Click the image above to read the report.

Last summer, with the support of the Prudential Foundation, CFED started on a journey to explore the needs of young, lower-income workers across the nation. As we traveled around the US, we talked with an advisory group of national leaders in the field about financial wellness programs to glean an understanding of what employers know about the financial lives of their workers and how they view financial wellness programs. This work and the findings from it have culminated in the release of our new report, Beyond the Next Paycheck: Creating Opportunities for Young Workers to Thrive. Our research brings to light a fundamental insight: short-term financial worries are getting in the way of long-term financial security, and employers understand that this mismatch hurts their own bottom lines.

From the young workers we interviewed, we learned that concerns about immediate financial needs top the list of financial worries. Almost all of the workers we spoke to were worried about making ends meet—many had concerns over paying their debt and their low savings. Young people like Robert don’t always have enough to keep their utilities on. Likewise, workers like Julia who are also in school worry about their debt getting higher and higher. But, as we learned from our group of advisors, employers don’t often offer services that focus on these immediate needs. Financial wellness services tend to be targeted to higher-income employees with longer-term needs.

This disconnect between what is available in the workplace and what young, lower-income workers need must be addressed. We must encourage employers to find programs that they can run directly and that relate to the short-term and immediate needs (e.g., saving for emergencies, budgeting) of their young workers, rather than long-term needs (e.g., saving for retirement). As a follow-up to our new report, CFED is partnering with the Center for Social Development at Washington University in St. Louis to create a Financial Wellness Program Directory so that employers can find programs that match up with their workers’ needs. There, employers will be able to cull through offerings that speak to the needs of their workers, such as emergency assistance and payroll advances. We're also working to provide additional information for employers to learn more about financial wellness programs and how to take the first steps to get one started in their workplace.

To help ease the disconnect between workers’ needs and services available, we focused on several other key insights to help guide employers that want to support the financial security of their young, lower-income workers:

  • Young workers want financial wellness services that are interactive, individualized, simple and secure. To fit this need, employers should think about services like financial coaching, financial classes, online tools and interactive savings programs.
  • Employers can leverage a number of existing programs, services and resources to meet the financial wellness needs of young workers through partnerships with many nonprofit and government programs that are targeted to the specific needs of lower-income workers.
  • Employers can and should track effectiveness and impact of services to help demonstrate a return on investment on such programs in the long term.

Employers have an important opportunity to positively influence the financial well-being of young workers. With the release of Beyond the Next Paycheck, we hope that employers can better understand what kind of financial wellness programs young, lower-income workers need in the workplace so that this emerging workforce can be primed for financial security well into the future. Stay tuned for more in the coming months!

Act Now to Protect Fair Housing

By Merrit Gillard on 04/07/2017 @ 10:00 AM

Tags: Financial Capability, Housing and Homeownership

April is Financial Capability Month, a time to reflect on the tools and resources that empower low- and moderate-income families to build stronger financial futures. A stable, affordable place to live is a linchpin of that future, so it’s appropriate that April is also Fair Housing Month. This month marks the 49th anniversary of the enactment of the Fair Housing Act, giving us a chance to celebrate the progress we have made to fight housing discrimination over the past five decades and consider how we can create more equal opportunity in every community.

One of the most important things we have to do now, however, is to make sure that that progress isn’t reversed. Unfortunately, two bills in Congress would do just that.

The Local Zoning Decision Protection Act of 2017—Rep. Gosar’s H.R. 482 and Sen. Lee’s identical S. 103—would repeal the Affirmatively Furthering Fair Housing (AFFH) rule, stripping away tools for communities to reverse housing segregation. The AFFH rule, finalized in 2015, gives communities guidance on how to fulfill their obligations to “affirmatively further fair housing,” meaning that jurisdictions that receive HUD funding must not only prohibit housing discrimination but must also actively work to dismantle patterns of housing segregation in their communities.

The requirement to affirmatively further fair housing has been an explicit part of fair housing law for half a century, but until the AFFH rule was adopted, communities often lacked the tools and data needed to identify and counteract this segregation. Under the new rule, HUD has made available a database of geospatial information on racial disparities in access to affordable housing, and HUD grantees will use the database to analyze the housing landscape in their communities and set actionable fair housing goals.

There is still much work to be done to ensure that people of color have truly equal housing opportunity. Today, people of color are still less likely to own homes than Whites, homes in communities of color appreciate more slowly than those in similar White communities and Black families are far more likely to live in poor neighborhoods than White families. Also, disparities in homeownership are a major driver of the racial wealth divide.

The Local Zoning Decision Protection Act would deal a huge blow to fair housing protections. This bill would gut the AFFH rule, prohibit any similar rule from being promulgated in the future and forbid the use of federal funds for the geospatial database. There is also a concern that the language of the bill might get added as an amendment to an appropriations bill. We need your help to prevent this harmful effort from becoming law.

Here's what you can do:

  1. Tell your Representative and Senators to oppose the Local Zoning Decision Protection Act. Here's how:

    Call 202.224.3121 and ask to be connected to your Representative's or Senators’ offices. If you don't know who your Representative is, find out here. If you don’t know who your Senators are, find out here.

    Once you're connected, here's what to say:

    My name is [your name] from [your city and state], and I’m calling to request that you oppose [H.R. 482, if calling your Representative, or S. 103, if calling your Senator], the Local Zoning Decision Protection Act. This bill would prevent communities from having access to the tools they need to end housing segregation, which would make it harder for households of color to access neighborhoods of opportunity. I also urge you to oppose including language from the Local Zoning Decision Protection Act to any appropriations bill. Please show your commitment to fair housing by opposing this harmful bill.
  2. Ask three friends or colleagues to call their Representatives and Senators, too.
  3. Share this action alert on social media throughout the month of April. Share on Twitter and Facebook.

Want to learn more about what you can do make homeownership more affordable for more Americans? Connect with Affordable Homeownership @ CFED!

This Month, Join Us in Improving Financial Health & Well-Being for All

By Andrea Levere on 04/03/2017 @ 03:00 PM

Tags: From the President, Financial Capability

Happy Financial Capability Month!

Every day and in every corner of our country, CFED staff see the ways in which financial capability issues can wreak havoc on a person’s life. From a $400 car repair that forces a choice between getting to work or paying the rent to a major medical illness that takes away a family’s income for the better part of a year, people’s financial lives are complicated in a range of different ways.

The good news is that alongside these challenges, CFED staff also see the creative and innovative ways community organizations, municipal agencies, philanthropists and others are helping the families they serve set out on a pathway of lasting financial health. In our technical assistance and capacity-building work, for example, we see how organizations like Hopeworks ‘N Camden are taking a holistic approach to financial health for the youth they serve, ensuring that when they get a good paying job, their hard-earned salaries will provide them with financial security. In our research work, we’re talking to young workers who help us understand the complex financial challenges they are facing and how employers can better meet their needs. And every time I hit the road for a speaking engagement or partner meeting, there’s a program manager who comes up to me to share a story about how a matched savings program helped someone stay in school, buy a home, or invest in a business.

We know two things about these financial capability-boosting programs: they work, and they deserve to be celebrated.

To raise up these promising practices and to celebrate the practitioners who make them possible, CFED is leveraging National Financial Capability Month for the third year in a row to draw attention to the range of ways families and communities want—and need—the knowledge, skills and access to products and services that help them navigate their financial lives. Throughout the month, we’ll be raising up what works, sharing resources for how to approach your work through a financial capability lens, and highlighting opportunities for you to be more actively engaged.

If, like us, you’re committed to building an economy in which families aren’t forced into poverty because of a broken washing machine or a busted transmission, here are a few ways you can get involved this month as we celebrate Financial Capability Month:

Of course, Financial Capability Month is about all of us, so in addition to these actions, we’d love to hear how we might help amplify what you’re doing in your community to boost financial health and well-being. Send us an email to let us know.

On behalf of the entire CFED family, thank you for all you do to put lasting financial well-being within reach!

Lessons from the Field: CA$H Maine Finds Ways to Increase Financial Capability of Taxpayers at Tax Time

By Craig Sandler on 03/28/2017 @ 12:00 PM

Tags: Financial Capability

Each year, many VITA and community-based organizations help taxpayers file their returns and leverage this moment to focus on ways to enhance their financial well-being. One of those organizations is CA$H Maine, which is a statewide collaboration of ten coalitions, comprised of 50 non- and for-profit partners, working together to help empower Maine individuals and families to achieve long-term financial stability. They have been working with CFED through a VITA technical assistance project this tax season and we wanted to share a few lessons and highlights from their work so far this year.

We interviewed CA$H Maine’s Financial Capability Project Coordinator, Janet Smith, about their work this year. Five of CA$H Maine’s coalition partners participated in the technical assistance cohort, each taking on unique goals based on lessons they’ve learned working with taxpayers on financial capability:

  • One coalition wanted to increase the number of tax filers who took advantage of savings programs, so they had their filers label mason jars with their savings goals, such as “I am saving for…” as a visual aid that encouraged the use of those programs.
  • A second coalition that works with Native American populations in the state used a financial check-up program with their tax clients, and used the info that they gathered to provide a more full picture and determine other programs clients would be eligible for, such as HUD counseling programs like credit checks.
  • Another coalition, in order to increase the number of tax filers participating in financial capability services, created private spaces where tax clients could feel comfortable speaking with staff and volunteers about financial capability in a more private setting.
  • A fourth coalition, the biggest tax site in the state, worked to make sure volunteers were educated around financial capability services and the advantages those services provide for tax customers. They also trained some of their VITA greeters to talk about financial capability with filers.
  • Finally, the fifth coalition in the cohort used a financial coaching program from Points of Light’s Financial Opportunity Corps, signing up tax customers to participate in the coaching program as well as IDA services.

CA$H Maine worked to coordinate the work of the five coalitions within the cohort by using a consistent intake form across all sites so as to comprehensively track asset building and financial capability work. The intake form also helps staff and volunteers guide tax customers toward the best resources for their needs: for instance, the form asks tax customers, if they receive a refund, what do they plan to do with it? If they check off that they plan to save their refund, then staff can help connect them to IDA programs and other programs that help with savings.

As another example, the intake form asks clients to rank their top three financial goals, such as saving for a home, saving for retirement or paying down debt, which can in turn lead to other conversations and services. Clients are also asked about their financial challenges which, again, can help start conversations with staff based on the challenges they identify.

CA$H Maine’s work is one example of how organizations are advancing programs and service to better meet taxpayer needs and increase financial security and well-being. If you’d like to learn more about lessons learned and resources on building financial capability at tax time, check out CFED’s webinars on Leveraging the Tax Moment to Build Financial Capability, Financial Capability at the Tax Moment and Tax Time Savings.

How Financial Capability and Education Can Help Underserved Communities with Kate Mielitz

By Ariel Sankar-Bergmann on 03/10/2017 @ 10:00 AM

Tags: Financial Capability

Kate Mielitz is a Ph.D. Candidate in the Personal Financial Planning Program at Kansas State University and an Accredited Financial Counselor (AFC®). Her research focuses on the financial education and capability of underserved populations, specifically individuals transitioning out of the criminal justice system. To better understand the banking and financial experiences of individuals in reentry, we interviewed Ms. Mielitz about a recent research project.

Tell us about your research design?

Sure. Let me give you a little background on how I began working on this issue. Previously, I worked as a financial educator in Georgia’s Transitional Center system. During this time, I spent a lot of time wondering “was I teaching the right thing?” and more importantly, “was I setting up participants so that they could be financially successful upon their return?” To try and help answer this question, I developed a curriculum and decided to evaluate the effectiveness of that curriculum with the participants in my classes. This process led me to want to do more research on the financial needs of inmates and individuals in reentry.

I approached this project in two distinct phases. During the first phase of the project, I wanted to understand if my curriculum was working for my students. The results from that phase of the project were encouraging because inmates who participated in my classes increased their financial knowledge and that increase was statistically significant. I knew though that we needed to get a better understanding of inmates’ general financial knowledge. This led to the second phase of my project where we developed a survey instrument based on the Jump$tart financial literacy survey and began to collect data from inmates who were 90 days from their parole or release date. In addition, we also conducted in-depth interviews with 40 former offenders so that we could really gain a complete picture of how former offenders understand their financial lives. I felt that using this mixed methods approach was important because it allowed us to capture the lived experiences of former offenders along with survey data that measured their understanding of specific financial topics.

What finding were the most surprising to you?

We surveyed 300 inmates who were still incarcerated and less than 60% of respondents were able to answer basic budgeting questions. Less than 50% of respondents were able to answer questions about secured and unsecured borrowing and less than 20% could tell which of the savings account options would be best for long-term savings. Surprisingly, we found that individuals who had more than one incarceration actually had higher financial knowledge but we are not sure what that is attributable to.

During the interviews, the theme of barriers emerged. I defined barrier as being something that inhibited action or change. One of the common barriers I saw was that participants were unable to open a bank account after they were released because the only form of identification they had was a corrections ID. This is a state ID so it’s unclear to me why banks won’t accept it but this creates a real problem for former offenders.

Respondents also lacked an understanding of credit and interest rates. For example, when I asked one respondent why he chose the bank that he chose, he mentioned that the bank was conveniently located and that it had low interest rates. When I probed further, it turned out the low interest rates were on the savings accounts that the bank offered.

Finally, the ways that banks communicate with former offenders can often be a challenge in and of itself. Respondents weren’t always clear about the policies of the bank and were uncomfortable with the ways that bank representatives communicated with them. Compounding this problem is the fact that many former offenders may have been incarcerated for years and during that time our banking system has changed drastically.

What are some of the implications of these findings for programs and policy makers?

From the perspective of the bank, I think they need to be paying more attention to the needs of former offenders. Most banks have a Community Reinvestment Action (CRA) service test and to pass this test they need to be prepared to meet the needs of the communities within their footprint, and that includes the needs of former offenders. Banks should consider offering some sort of non-sales based financial education curriculum, which could benefit the banks and former offenders and would be good for overall reentry policy.

In a broader sense, transitioning out of the criminal justice system and back into the financial world is a key component of helping former offenders have a successful reentry process. We know there is a link between financial knowledge and financial decision making. In order to help former offenders be successful with their own finances it’s critical to start thinking about how we can integrate successful financial education into reentry programs.

What are questions that you feel still need to be answered?

There are three questions that I’m interested in trying to better understand:

  1. We need to identify curriculums and test them in different geographic locations. We tested the curriculum that I created in a large southern state but it’s possible that curriculums will need to be changed and adapted depending on the population.
  2. We need more research to understand how money and financial behaviors are associated with recidivism. In particular, we need to understand the connection between financial strain, knowledge and recidivism.
  3. Finally, we just need better data on the general knowledge and needs of inmates and about how those needs vary at different periods of time in a person’s life.

New Brief Highlights Opportunities for Expanding or Aligning Financial Capability Efforts

By Megan Bolado and Dominique Derbigny on 03/09/2017 @ 09:00 AM

Tags: Financial Capability, News

Click to read "Paving the Way"

At CFED, we spend a lot of time on the road delivering technical assistance and bringing organizations together to help them maximize their impact in their communities. As part of our commitment to sharing knowledge and best practices, it is our pleasure to document the lessons we learn from our deep engagements with the many partners who make the work of boosting financial capability possible. A prime example is the Community Financial Empowerment Learning Partnership, an 18-month project that JPMorgan Chase & Co. generously supported. Today, we’re excited to share “Paving the Way: A Roadmap for Organizations Partnering to Deliver Financial Capability Services,” a brief which documents the phases of the financial capability integration lifecycle—discover, design, implement and converge—as experienced by the members of the Learning Partnership. These lessons provide powerful insights for organizations eager to integrate financial capability services into their existing work or to partner across their communities to help boost clients’ financial well-being.

The Community Financial Empowerment Learning Partnership concluded in September 2016. The Learning Partnership consisted of seven groups of community-based organizations seeking to improve their clients’ financial lives by expanding and aligning financial capability service delivery to more holistically support their communities. Participants in the Learning Partnership included:

  • Catholic Charities of the Diocese of Santa Rosa (Sonoma County, CA)
  • Clarifi, with partners City of Philadelphia and Energy Coordinating Agency
  • Financial Guidance Center (Las Vegas, NV)
  • Massachusetts Community Action Partnership
  • United Way of Miami-Dade, with partners Catalyst Miami, Branches and the City of Miami
  • Wayne Metropolitan Community Action Agency (Detroit, MI)
  • WiNGS, with partners New Friends, New Life and Metrocrest Services (Dallas, TX)

Over the course of the project, important learnings emerged about the process of planning for and delivering financial capability services in partnership with others and “Paving the Way” shares these lessons with the field. These lessons reaffirm for us that integrating services can be an iterative and resource-intensive process for organizations, especially when partnering across organizations and communities. However, applying the lessons and experiences of the organizations in the Learning Partnership may simplify the process and ultimately lead to improved impact on the financial capability of low- and moderate- individuals and families.

Download “Paving the Way” today and browse a range of other financial capability integration resources at cfed.org/integration.

Is Weight Watchers the Answer to Financial Health?

By Steve Wanta, Guest Contributor on 02/16/2017 @ 10:00 AM

Tags: Financial Capability

Change is hard. Whether trying to lose a few pounds or overcoming an addiction, people have been seeking solutions that can make change easier. The struggle to tackle physical and emotional obstacles is part of the human condition. How can these lessons from the world of self-help apply to our financial health?

When starting JUST, we asked ourselves if we could reimagine an organization that was truly based on a community of peers supporting one another to achieve financial freedom. The question led us to explore other, non-financial organizations like Weight Watchers, AA, CrossFit and Entrepreneurs Organization.

From the former CEO of Weight Watchers, David Kirchhoff, “The good thing about peer support is that it works. The bad thing is that no one wants to do it.”

At the beginning of 2016, I joined Weight Watchers to see how this long-standing organization used peer support to help people change and create new habits to reach their weight loss goals. For a month, I would attend weekly meetings, weigh-in and observe how people supported one another in their commitment to change. It was beautiful. It was very different from the thousands of microfinance group meetings around the world I had attended during the course of my career with Whole Planet Foundation.

The top five lessons I took away from my experience with Weight Watchers were:

  1. Start with a new vision of yourself: As Carol Dweck’s research on mindsets has shown, believing you are capable of change is an important first step.
  2. Goals are critical: The framework of goal setting helps create focus and a road map for the hard work of changing habits.
  3. Celebrate the little wins: The journey can be long and hard. Along the way, we need to pause, reflect and acknowledge the progress we have made.
  4. Develop role models: To know someone that has “been there before” is a reassuring example that it is possible. Weight Watchers’ operations depends on these role models.
  5. Everyone is not the same: Some people hate setting goals. Some people care less about the outcome and more about the support. Some are completely uninterested in the meetings and peer support.

JUST has tested many of these lessons around building better money management habits and business critical skills. Most recently, we tapped into the power of peer support for our first savings challenge. Small groups of our clients competed to see who could save the most in one month. The winners saved an average of $268 per person in November.

Ida Rademacher, the Executive Director of the Financial Security Program at the Aspen Institute has framed the idea simply as the ‘couch to 5k’ approach. When we are woefully out of shape, starting is the hardest part. At those moments, an encouraging word or a simple plan can make a big difference. JUST believes a nudge from a person is a powerful tool for changing behaviors.

Although our early results have been positive, we know that we need to design a solution that can have a profound impact at the individual level while serving as many people as possible. The financial health epidemic facing our country is too important to create something that only serves a few. We believe 21st century solutions attempting to reach the hardest to serve must take a human-centered approach that is enabled by technology.

And the answer is yes. I lost five pounds in my month at Weight Watchers. The accountability and sense of togetherness created by the group experience were important elements in sticking with the program. Yet, meetings alone were not enough. The Weight Watchers app gave me the information to make better food decisions. Today there are plenty of apps to help us with our financial lives. Can we build a financial weigh-in, too?

About JUST

JUST is a social enterprise that unites entrepreneurs to create a financial revolution from the inside out. We invest in hard-working, low-income entrepreneurs to realize a more resilient America. We provide capital and coaching through a community of supportive peers. JUST believes lasting solutions to poverty must address both sides of the economic equation, income and savings. To learn more about our work, visit www.hellojust.com or follow us on Twitter @NewAndJUST.

Symptoms vs. Causes: Individual-Level Interventions Are Not Enough

By Dominique Derbigny on 02/01/2017 @ 09:00 AM

Tags: Financial Capability

I practice social work. Many believe that the social work field is entirely devoted to child welfare, but actually the discipline is deeply rooted in systems change. As social workers, we commit to social justice, equality and alleviation of the oppressed.[1] One of the core tenets of social work is the person-in-the-environment framework, which posits that we cannot understand individual behavior without considering the environmental contexts with which a person interacts. This framework suggests that exploring the larger communities, institutions and systems surrounding clients is critical to developing appropriate interventions at multiple levels.

As part of the Community Financial Empowerment Learning Partnership in 2015 and 2016, I worked with Catholic Charities of the Diocese of Santa Rosa (CCSR) to explore their clients’ financial needs and determine new service delivery offerings that could help improve their financial lives. CCSR decided to offer financial education, financial coaching, incentivized savings programs and free tax preparation for clients in their housing/shelter, immigration and aging programs. Through the implementation process, CCSR realized that while the addition of new financial capability services was helpful, larger structural issues were impacting economic opportunities for their clients (e.g. immigration policies, asset limits on public benefits, lack of affordable housing). Inspired by the 2015 Assets & Opportunity Network Leadership Convening that included a focus on closing the racial wealth gap, CCSR decided to expand their efforts. In August 2016 they hosted a regional convening of 30 asset building leaders to explore Bay Area economic issues at a systems-level and to brainstorm opportunities for change and impact. The result was the formation of the Bay Area Asset Network (BAAN), whose vision is “to generate an inclusive and equitable economy for all individuals and families in the bay area.”

CCSR recognized the shortcomings of focusing explicitly on individual-level interventions, and decided to bridge service delivery with systems and policy change. In the field, we have seen that organizations focused on changing individual behavior may unintentionally blame or shame individuals for their situations. It is true that we all make choices and that choices have consequences, but what if your only choices are between unfortunate circumstances? If you have to choose between grocery shopping or keeping the lights on, taking on additional debt or not fixing your car, living in an affordable neighborhood with failing schools or living in an expensive neighborhood with high performing schools – these choices make it difficult to get ahead. If you are constantly fighting just to make ends meet or stay above water, how do you advance economically? Individual-level interventions may assuage clients’ needs temporarily, but if you only treat the symptom instead of the cause the issue won’t resolve entirely.

We need to step back from focusing on personal situations and identify the larger, interconnected elements of the external environment. This involves digging deeper to understand the root causes of issues. For example, formerly incarcerated individuals face several barriers when re-entering the community – finding employment, housing and social supports to name a few. While it may be important to provide job training and money management tools, such as credit building opportunities, to help facilitate re-entry, it is also necessary to explore the drivers of mass incarceration, employment/hiring practices and housing discrimination. Failing to explore the deeper issues means that individuals will continue to cycle through the criminal justice system, experience discriminatory practices and remain disconnected from opportunities for advancement. While focusing on changes in individual knowledge and behavior can be helpful, multi-level interventions are needed to address underlying conditions and spur long-term change. I invite you to share your approaches to improving systems to advance economic opportunity for people in your communities.


1. Hepworth, D. et al. Direct Social Work Practice: Theory and Skills, Seventh Edition. 2006, Thompson Brooks/Cole.

Now Available: New Resources for Integrating Financial Capability

By Jennifer Medina on 01/11/2017 @ 09:00 AM

Tags: News, Financial Capability

Building the financial capability of low- and moderate-income families is a priority for CFED and our many partners in the field. As part of our commitment to this priority, CFED has provided technical assistance to community-based organizations interested in integrating financial capability services into their existing programs as part of the Family Financial Empowerment Initiative, a two-year project supporting financial capability integration in the northwest. As part of this work, we had the opportunity to produce several resources to support the growing slate of organizations seeing financial capability as critical to improving outcomes. Now, we’re excited to kick off 2017 by sharing these resources—including two videos and six tips sheets—with the field. We encourage you to take a few minutes to explore these new resources and share them with your partners!

Financial Capability Integration in Practice. In this eight-minute video, service providers and nonprofit leaders share their stories about the promise of integrating financial capability into the services they offer, while clients speak to the ways in which financial capability has made a positive difference in their financial lives.

Household Financial Security Framework. CFED recently revamped its Household Financial Security Framework, which we launched last month with a new animated video. The Framework helps illustrate how people must be able to navigate financial systems, learn key skills, earn money, save their earnings, own assets and protect those assets in order to achieve financial security.

Tip Sheets for Practitioners. CFED developed six tip sheets to help practitioners integrate financial capability services into their existing programs. Ranging from tips on how to select a target program for integration to strategies for serving specific populations to ideas for supporting clients from financial instability to stability, these easy-to-use tip sheets are filled with helpful advice from experts in the field.

To browse these and other resources, visit our online hub for Financial Capability Integration at cfed.org/integration.

The Power of Visual Frameworks in Communicating on Financial Capability

By Craig Sandler on 12/09/2016 @ 10:00 AM

Tags: Economic Inclusion, Financial Capability

"How do you talk about financial security in a simple, easily digestible way?" is a question we get asked frequently at CFED. Finding accessible words to explain the complicated relationship money has to our lives can be challenging. Terms like “asset building” and “financial capability” can seem opaque to those outside of the field, and even to some within. Attempts to explain these concepts can too often descend into confusing jargon or overcomplicated explanations of the role of money and our knowledge/ability to handle it.

Many of CFED’s partners and networks, however, have found that using infographics to distill these core concepts into easily-understood visual formats is an effective way to talk about some complicated issues. View the slideshow below in full screen to see several examples of frameworks and explanations of their value. (Note: In order to click on the hyperlinks embedded in the slideshow, you can download the slideshow as a PDF here).

Every community is different and has unique financial capability needs, and different frameworks are more appropriate for some communities than others. What is important is finding a way to communicate the nuances of asset building and financial capability in a way that resonates with your audience. We hope that these examples help to inform your own thinking or inspire you to create a framework that will be most helpful to your partners and the communities you serve.

If you have a financial capability framework that you think would be valuable to your peers, please share it with us at assetsandopportunity@cfed.org.

Explaining the Financial Security Framework with Leigh Tivol

By Ariel Sankar-Bergmann on 12/08/2016 @ 10:00 AM

Tags: Economic Inclusion, Financial Capability

Decades of research—plus our own gut instincts—tell us that boosting financial security is complex. We know that achieving lasting financial well-being is not simply a matter of earning enough, but rather requires a range of factors to come together in a person’s financial life. To help explain these components and how they come together, CFED recently revamped its Household Financial Security Framework, which we launched last month with a new white board animation. The Framework helps illustrate how people must be able to navigate financial systems, learn key skills, earn money, save their earnings, own assets and protect those assets in order to achieve financial security.

To better understand the Framework and how each of its component parts coalesce in people’s financial lives, I sat down with Leigh Tivol, CFED’s Vice President for Strategy & Engagement, to learn more about the development and evolution of the framework.

Ariel Sankar-Bergmann: Tell me a little about why CFED developed the household financial security framework in the first place.

Leigh Tivol: CFED is trying to solve a really complex problem: we are trying to find ways to help people have better financial lives. We know that there are so many different components that make up the daily life of a consumer, and we recognized that the solutions to these problems are equally complex.

The original Household Financial Security Framework helped us to make sense of CFED’s work. As our work evolves, so has the Framework, and it continually helps us make sure that we consider and impact all components of a household’s financial life.

CFED also works with increasingly diverse players. It’s important to have a way for external stakeholders to see their goals, work and interests reflected in the work that CFED does. For example, if I’m a housing provider or a financial coach, I can look at the Framework and see how my work is so critical to people’s financial lives. The Framework helps CFED make the case to partners and potential partners and shows them that we have a clear set of interests in common.

ASB: How has the Framework evolved over the years?

LT: Originally, we conceived of “learn” as a mash-up of financial education, K-12 and higher education. As we moved towards a better understanding of financial capability, it became clear that we needed to separate out the part that is about consumers having the skills, access and safe products to make good financial choices, which now falls under navigate, from educational attainment. Having a high-school diploma and postsecondary education can have a significant impact on financial well-being, and it no longer felt like it was appropriate to combine the two. After all, financial capability requires life-long learning, not just the focus of a two- or four-year degree. We also changed “invest” to “own” because we realized that “invest” was confusing to us and to the organizations in our field. On the flip side, “own” was much more straightforward. So, the Framework is an example of how we as a field can apply what we are learning to create new tools.

ASB: How do you think the Framework can help organizations work better?

LT: I think the Framework can help organizations in three ways. The first is that it helps organizations see where their mission and work can fit into a larger picture of household financial well-being.

The second way is that it can help guide organizations as they think about their own internal gaps and identify opportunities for partnership. For example, if your organization is providing workforce development and helping clients get banked—but it hasn’t addressed the “navigate” component of the Framework—it’s possible that your clients won’t be successful in managing their bank accounts and they may end up back in the check-cashing store down the street. In this scenario, there is an opportunity for the workforce development organization to either partner with an organization that specializes in helping clients navigate financial situations, they could refer clients to that type of organization or they could build the capacity of their own staff so that they can help clients navigate financial systems.

Finally, the Framework is a great tool for conveying the complexity of financial security strategies to policymakers, funders and partners. Going back to the example of workforce development, if I am working with a financial coaching program that is not helping clients access bank accounts, having this Framework makes it easier to bring partners to the table to address this gap in services because they can see the importance of helping households navigate the system.

ASB: Given all that the Framework can do to help organizations see their work, tell me a little about how the Framework informs CFED’s work?

LT: At the highest level, it informs the framing of our strategy. Improving household financial security is a complex problem and we see opportunities all over the place to do great work. But if that work doesn’t fit into the Framework, it’s probably something that another organization is already doing. At a micro-level, it is much more intuitive. The Framework informs how we think about the delivery of information, of products and of services that allow people to get on firmer financial ground.

ASB: Who do you wish would read or use the framework in program development, policy creation or advocacy?

LT: It sure would be nice if every state and federal legislator saw the Framework! On the policy side, there sometimes is a tendency for policymakers to think, “Oh, we passed that one bill, so we’re done.” If a policymaker, legislative body or agency really wants to see low- and moderate-income people get ahead, we need policies that support all aspects of the Framework and that don’t disincentivize behaviors that we hope consumers will engage in.

It would also be great for funders to look at the Framework. Some funders already understand the Framework really well, but I think for others, it would be eye-opening. We cannot achieve a particular financial security outcome unless we address its underlying elements, and we need to think about how we can get resources to organizations so that they can do this.

ASB: Is there an example of how a group or a person might use the Framework?

LT: Actually, I can give an example of a group that currently does use the Framework, and with some success. The Financial Empowerment Network, a Washington State-based organization whose mission is to advance financial empowerment through partnerships which support access to financial coaching, products and resources, used the Framework as the basis for a workshop they developed in 2011. The purpose of the workshop was to help case managers and supervisors learn about resources to help clients improve their financial situation.

The Framework is also part of a resource guide that is designed to help frontline staff understand basic financial empowerment issues and make credible referrals. These are just two of many examples of how other organizations are taking an idea that we started with and really running with it—adapting it to meet their own needs and those of their clients.

To learn more about CFED’s Household Financial Security Framework, watch our new white board animation or download the Framework at our Knowledge Center.

Crossing the Great Divide: Building Assets and Wealth for All

By Andrea Levere on 11/10/2016 @ 09:00 AM

Tags: Racial Wealth Divide, Financial Capability, Economic Inclusion

Editor's Note: This article originally appeared on the Living Cities blog.

“But it’s all right, ‘cause it’s all white…I ain’t talking about rich, I’m talking about wealth.” - Chris Rock, 2004

Sometimes the most vivid truths are spoken by the most unlikely suspects. Since its founding 36 years ago, CFED has pursued a mission to reduce wealth inequality, although we didn’t know it was called that until 25 years ago (what timing!) when Michael Sherraden introduced asset building as the next approach to poverty alleviation in his book, Assets and the Poor. A New American Welfare Policy. While the creation of the social safety net was one of the crowning achievements of the 20th century, the economic changes of our time demand more if we expect to help families stabilize their financial lives and escape the cycle of poverty.

The asset-building approach was grounded in the belief that a household needs knowledge of and access to affordable financial products and services to build the savings and economic cushion that enable upward mobility. Policies that protect consumers in the financial marketplace and encourage savings and investment among low-income households can work in conjunction with traditional antipoverty programs to help families get ahead. The core insight that “it’s not just what you earn, but also what you own” led to our view that the task ahead was to “turn the safety net into a ladder” by building a field of practitioners, crafting policies, engaging private markets, and collecting the data that diagnosed the challenges and delivered evidence of what worked.

CFED’s partnership with Living Cities led to a pivotal report in 2011 titled Building Economic Security in America’s Cities: New Municipal Strategies for Asset Building and Financial Empowerment. This report chronicled the innovative approaches of a growing number of cities in advancing economic security and opportunity through offices of financial empowerment, innovations ranging from access to banking to credit building, and the use of municipal regulation to restrict predatory financial practices. The enduring gift of this report was the design of the Household Financial Security Framework, which illustrated how personal behavior and aspirations, financial structures and systems, public policy and economic trends all interact to create the complex financial lives that we all live and how cities can align services and partners to build financial security in a comprehensive way. Five years later, this framework still guides the work of cities, states and nonprofit organizations.

Another leap came with the creation of the Liquid Asset Poverty metric, which measures the ability of a household to exist at the poverty level for three months if its main source of income is disrupted. Today, 44% or almost half of US households live in liquid asset poverty, with rates much higher in many of our major cities. This number has changed the political conversation; rather than focusing on “those poor people” as a problem, we now understand that more than half of the population faces some level of financial insecurity every day and is part of a broader community seeking solutions.

Yet despite the success of many of our asset-building programs and policies, the current level of income and wealth inequality has increased to levels not seen since the Depression. While Americans of all backgrounds have experienced significant losses of wealth since the recent recession, Americans of color have suffered the most. They are 2.1 times more likely than white households to live below the federal poverty line and 1.7 times more likely than whites to lack the savings needed to weather an unexpected financial crisis. Today, the gap between the average wealth of white households and Black and Latino households exceeds $500,000. A report issued by CFED and the Institute for Policy Studies last month revealed the stunning news that if the average Black and Latino family’s wealth increased at the same rate it has over the past 30 years, it would take Blacks 228 years and Latinos 84 years to generate the same amount of wealth white families have today.

And this sobering reality brings us back to the prophetic words of our favorite comic-turned-economist, Chris Rock. The challenge ahead is to proactively address the racial wealth divide through community-based and policy solutions that reduce this inequality at the national, state and local levels. While much of this inequality is the result of centuries of racist policies, our current tax code expands economic inequality every day through subsidies for homeownership, savings and investments, retirement and higher education that return almost $147,000 annually to the top 0.1% while the average benefit for those making less than $50,000 was barely $150. We need to flip the tax code while we place racial equity at the center of our strategy to revitalize cities and build financial well-being for their residents. I can imagine no organization better prepared to rise to this challenge than Living Cities as it celebrates its 25th anniversary.

Bank of America Fellowship: Measuring Changes in Client Financial Capability and Well-Being

By Hiba Haroon on 11/08/2016 @ 10:00 AM

Tags: Financial Capability, Economic Inclusion

The expansive benefits of financial coaching range from changes in savings and credit to employment retention and greater health. In addition to changes in financial behavior, access to financial coaching has been related to improving individuals’ personal perceptions of their financial situations. More and more, organizations now offer financial coaching to gain a deeper understanding of clients’ financial needs and goals and to provide the necessary tools and resources to increase clients’ financial capability.

As the coaching field grows, so does the need to measure client outcomes and attitude changes to assess its effectiveness.

To help address this need, CFED just launched its 4th Bank of America Fellowship to explore how impact measurement and evaluation systems can be integrated into existing financial coaching programs. The fellowship aims to build the capacity of senior leaders at five organizations, all of which currently provide financial coaching services, to develop monitoring and tracking systems using the CFPB’s Financial Well-Being Scale and Financial Capability Scale to better understand how client outcomes are changing over time.

CFED will provide the five fellows intensive technical assistance on program design and implementation, partnership opportunities and outcomes evaluation through site visits and bi-monthly meetings. CFED will organize and facilitate three virtual convenings and two in-person convenings to provide the fellows opportunities to share lessons and promising practices.

Finally, CFED will work with fellows to integrate Better Money Habits into their coaching services. Better Money Habits is an online financial education curriculum powered by the Bank of America Charitable Foundation. It provides objective and user friendly financial education to empower consumers to be informed and prepared to make financial choices.

We are excited to introduce the fellows selected to engage in this project:

Hopeworks: Dan Rhoton, Executive Director (Camden, NJ)

Hopeworks uses innovative program model teaching homeless and vulnerable youth how to code and build websites while offering individual psychological and emotional support. Hopeworks is training staff how to be financial coaches so that they can offer support to youth during individual counseling sessions.

YWCA Seattle: Matt King, Director of Employment and Regional Services (Seattle, WA)

Born from a commitment to empower women and advance social justice, the YWCA has a rich history and wide array of workforce development programs. YWCA already provides financial education within their job training program and will use that platform to provide financial coaching.

Goodwill Sacramento: Robynne Rose-Haymer, Workforce Development Director (Sacramento, CA)

Goodwill Sacramento was established in 1933. Offering services to thousands of people across are large geographic area, the organization is an important presence in the greater Sacramento community. Goodwill Sacramento has four trained coaches on staff who will continue to find ways to provide coaching services within their workforce related activities.

In addition to these three organizations, two Financial Opportunity Corps sites will participate in the Fellowship:

Baltimore CASH Campaign: Courtney Bettle and Sara Johnson, Program Manager and Director of Financial Security respectively (Baltimore, MD)

The Baltimore CASH Campaign was formed in 2001 to employ strategies to help working families in Baltimore maximize their financial opportunities and resources. Baltimore CASH has a well-developed financial coaching model and is now entering their fourth year as a Points of Light network member.

Accounting Aid Society: Lindsey Vaclav, Manager of Financial Potential Programs (Detroit, MI)

Accounting Aid Society was established in 1972 by accountants who wanted to give back to the community. Accounting Aid Society offers a wide array of services to over 26,000 people in the greater Detroit area. Their services include VITA tax prep, small business financial services, financial education and financial coaching.

Over the next 10 months, we will share updates on members and their progress.

CFED is grateful for Bank of America and their support throughout the fellowship, and we look forward to the progress we will make together!

ALC Provides Launchpad for Latest CSA Findings and Developments

By Diego Quezada on 10/19/2016 @ 10:00 AM

Tags: ALC 2016, Children's Savings Accounts, Education, Financial Capability

The 2016 Assets Learning Conference provided a multitude of opportunities for CSA leaders to connect, share best practices and generate new ideas for moving the field forward. CFED hosted both a CSA pre-conference September 27, which brought together more than 50 experienced CSA practitioners, advocates, funders and policy champions, along with organizing a set of workshop sessions on CSAs at the conference itself.

Benita Melton from the Charles Stewart Mott Foundation kicked off the pre-conference session by noting the number and diversity of programs represented in the room, reflecting the growth and momentum in the field. At the same time, she pointed out that work remains in developing an account platform to help open accounts, improving parental engagement and improving data tracking data of educational outcomes—all of which were discussed throughout the day.

Following a presentation on interim outcome metrics, Frank DeGiovanni, formerly with the Ford Foundation, and William Elliott, with the Center on Assets, Education, and Inclusion, commented that the field has made the evidence-based case that CSAs work by helping families save, and now programs should focus on improvements and understanding what factors help children do better.

The pre-conference session also featured a Shark Tank-inspired session that included three “pitches” from providers of new technology solutions to make provision of CSAs more accessible and efficient. Megan McTiernan of EARN showcased a new online platform that connects directly to savers' individual bank accounts and rewards them based on their saving activity. As part of the demos, Utah Educational Savings Plan and VistaShare’s Outcome Tracker also presented their products, followed by probing questions from the expert panel and audience.

In addition to the robust discussions during the pre-conference, the Assets Learning Conference highlighted CSAs in a variety of ways. At the opening plenary, CFED’s President Andrea Levere challenged the audience to expand CSAs from 29 states to all 50 states. She also urged attendees to join the Campaign for Every Kid’s Future, which works to connect 1.4 million kids to CSAs by 2020. Finally, four workshop sessions at the 2016 ALC focused specifically on children’s savings, providing attendees with tools to design and launch CSA programs, the latest research on CSAs and strategies for how to pitch their programs to different types of funders and elected officials.

One of the highlights of the conference was a session on CSA research. At the session, Trina Shanks of the University of Michigan's School of Social Work reported on recent findings from a quasi-experimental study of CSAs. The so-called Michigan SEED site, which opened CSAs for kids in Head Start more than a decade ago, was part of the multi-year SEED Initiative. Findings from recent interviews with participants emphasized youth voices about CSAs gathered through qualitative data. This series of interviews revealed that financial barriers remain a challenge in the lives of the CSA savers and that communication between the parents and children about the value of CSAs is critical to increasing college aspirations. In addition, research on Kindergarten to College students, presented by William Elliott, found that more disadvantaged students – students in schools with a high percentage of the population on free or reduced lunch – saved at the highest rates, challenging conventional notions about saving.

Overall, the insights and new findings on CSAs shared at the 2016 Assets Learning Conference and pre-conference highlighted the incredible progress across the country over the past several years to expand CSAs and increase the effectiveness of programs.

If you would like to see speaker presentations and handouts from the CSA workshops and concurrent sessions, visit the Assets Learning Conference website.

Portable Benefits Can Offer Stability for Gig Economy Workers

By Diego Quezada on 10/17/2016 @ 01:00 PM

Tags: Economic Inclusion, Financial Capability

Recently, a federal judge rejected a proposed $100 million settlement between Uber Technologies, Inc. and its drivers. The settlement would have afforded Uber drivers at least minimum-wage salaries and reimbursements for expenses and gasoline. This decision reopens a case the Wall Street Journal calls a "pivotal moment for more companies that depend on a pool of freelance workers to drive taxis, clean houses, run errands or perform other menial tasks."

This case underscores the uncertainties “gig economy” workers face – their incomes are inconsistent, and they may not have paid sick leave or an opportunity to enroll in an employer-sponsored health-insurance plan. While 29% of on-demand workers also have full-time employment, several are still missing out on the benefits of traditional employment. These issues are facing more and more Americans. According to economists Lawrence Katz and Alan Krueger, all net employment growth from 2005 to 2015 occurred in alternative work arrangements. The Government Accountability Office notes that as many as 30% of workers have contingent jobs, and a recent Deloitte survey found that 42% of executives plan to use more contingent workers in the next three to five years.

The financial insecurity many contingent workers face, and the likelihood that the gig economy is here to stay and growing, highlight the need for these workers to attain benefits and stability. For gig economy workers who are not able to supplement their incomes from on-demand platforms with full-time jobs, these benefits are even more vital to their financial security.

The idea of portable benefits – workers’ compensation and sick leave that workers can carry from job to job – reflects the need for benefits to keep up with the wide-scale changes in economic activity. Without extending benefits to “gig economy” workers, we would stay on a trajectory of shutting out a growing segment of the working population from the stability benefits provide for millions of Americans.

Many companies already support portable benefits. The U.S. Department of Labor recently announced $100,000 to fund portable benefits research. Additionally, portable benefits has bipartisan support – former John McCain economic adviser Douglas Holtz-Eakin and former Hillary Clinton adviser Anne-Marie Slaughter signed a letter to lawmakers supporting the policy.

The benefits infrastructure forged decades ago does not accommodate the realities workers face in the twenty-first century. Intuit found that the typical income stream of a gig economy worker includes a mixture of on-demand work, a traditional full- or part-time job, consulting and owning a business. Economists have found that paid leave raises the probability that mothers return to employment later and then work more hours and earn higher wages. Benefits are good for business and good for workers. Let’s ensure that all gig economy workers – especially those with low or moderate incomes – have access to the benefits everyone deserves.

Nearly $250,000 Raised in September to Help Low-Income Children Save for College

By Diego Quezada and Monica Copeland on 10/06/2016 @ 09:00 AM

Tags: Children's Savings Accounts, Financial Capability

On September 17 at Rose Bowl Stadium in Pasadena, California, CFED’s Children’s Savings team joined CFED Board member Jamie Kalamarides at Prudential’s second annual 4.01k Race for Retirement. The Race for Retirement is a large public relations campaign designed to raise awareness about the importance of saving for retirement. CFED’s 1:1 Fund was selected to be the cause marketing partner for the race again in 2016, and Prudential donated $200,000 as a result of the race—$15 on behalf of every runner who registered. Since 2015, Prudential has provided $600,000 to support Children’s Savings Account (CSA) programs through the 1:1 Fund, making a meaningful difference in the ability of low-income children across the country to save for college.

Runners head toward the main stage at Prudential’s Race for Retirement in Pasadena, CA

The 1:1 Fund and Prudential understand the impact of regular savings, which lead to big dreams in the long-run for families. As a result of this partnership, Prudential made a $200,000 donation to the 1:1 Fund, which was presented to CFED’s Carl Rist on the main stage at the race.

CFED board member, Jamie Kalamarides, and Carl Rist, Senior Director of Children’s Savings at CFED, accept a check for $200,000 from Prudential Foundation’s Kimberly Ostrowski. Photo credit: Prudential

At the 2016 Race for Retirement, CFED also released a brand new video that outlines the role of the 1:1 Fund in supporting children’s savings programs and features two powerful CSA programs—Boston-based Inversant and San Francisco’s Kindergarten to College.

Children’s Savings team program associate, Diego Quezada, speaks to Race for Retirement participants about the 1:1 Fund.

To cap off a great month of raising incentive funds to for child savers, four CSA programs also participated in the 1:1 Fund’s Back to School campaign, which took place September 12 – 16. Together, these programs raised an additional $40,000 from individual donors across the country, which will be matched by the 1:1 Fund to deepen the impact of these programs. Additionally, two of the four programs—Barry Community Foundation’s Kickstart to Career program and San Francisco’s Kindergarten to College—created short videos to help publicize their Back to School campaigns, which resulted in over 1,000 views on YouTube.

Thanks to the generosity of Prudential and the individual donors who made the Back to School campaign a success, we will help make the college dreams of thousands of low-income children a reality. For more information about the 1:1 Fund and ways to support matched savings for future generations, visit 1to1fund.org.

Official Statement on the Consumer Financial Protection Bureau’s Youth Financial Capability Report

By Kasey Wiedrich on 09/16/2016 @ 03:00 PM

Tags: Data and Research, Education, News, Financial Capability

The Corporation for Enterprise Development (CFED) has been working with the Consumer Financial Protection Bureau (CFPB) and other partners on defining financial well-being and ways to measure it over the past several years. A big question that emerged from that work on financial well-being and its drivers was how do children develop the skills and characteristics that support financial well-being and how can we help children and youth build those attributes? CFED, with the University of Wisconsin-Madison, the University of Maryland, Baltimore County, and ICF International researched these questions through an extensive literature review, a scan of youth financial capability programs, and interviews and discussions with expert academics and practitioners.

Last week, the CFPB released a report on the result of this research, which describes the building blocks of financial capability and the ages at which they begin to emerge.

The building blocks are:

  • Executive function – a set of cognitive processes used to plan, focus attention, remember information, and juggle multiple tasks successfully that begins to develop in early childhood (ages 3-5).
  • Financial habits and norms – the values, standards, routine practices, and rules of thumb used to routinely navigate day-to-day financial life that children begin to acquire during middle childhood (ages 6-12).
  • Financial knowledge and decision-making skills – familiarity with financial facts and concepts, and the ability to do financial research and make conscious and intentional financial choices that come into focus during adolescence and young adulthood (13-21).

These building blocks develop over the course of childhood and they build upon and reinforce each other over time. With these developmental windows of opportunity in mind, the report also lays out a set of strategies to help youth develop financial capability:

  1. For young children, focus on developing executive function skills.
  2. Help parents and caregivers actively shape their child’s financial socialization.
  3. Provide children and youth with opportunities to learn from experience.
  4. Teach youth financial research skills.

These recommended strategies reflect the fact that children and youth don’t learn skills or knowledge in one way or in one setting. Schools and educators play a critical role, but parents and home environments are often the most influential agents of financial socialization as CFED documented in our research earlier this year. And as they age and grow more independent, children and youth are influenced by their peers and their own experiences in their communities. To support these different players in building youth financial capability, the CFPB has produced a number of different resources:

Working with the CFPB on this research has been a valuable experience for CFED, and we are excited about its potential for organizing all of those who care about building youth financial capability around a common set of strategies. If you want to learn more, join us at the ALC in the session, “Setting Children Up for a Lifetime of Financial Well-Being,” where Sunaena Lehil of the CFPB will talk about the report and the CFPB’s work on youth financial capability.

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