How to move from financial education to behavior change? Consider coaching

By Pam Bailey, NeighborWorks America blogger

A new survey commissioned by NeighborWorks America found that nearly a third of all adult Americans have no emergency savings in place. Clearly, the education and resources offered by a myriad of organizations have not yet reached large numbers of people -- or resulted in the holy grail, behavior change. The first post in this two-part series explored why. In this second post, the story of Jesusita and Ruben Hernandez shows how financial coaching can help reverse that trend. 

When Ruben and Jesusita got married eight years ago, their love was enough to turn their lives around in so many ways. But when it came to their finances, they were a mutual disaster.

Ruben and Jesusita Hernandez

“I’m one of those guys who could never seem to pay back the money I owed,” admitted Ruben. “Jesusita was a little better, but had run up a lot of debt herself. In fact, when I first met her, she had declared bankruptcy. Neither one of us had learned those kinds of life skills.”

Their household grew to include three children, now aged 9, 11 and 16 -- two of their own and one from a previous relationship. Jesusita worked as a pension analyst and Ruben left his job as a roofer to earn an associate degree in sociology, with a goal of eventually helping troubled youth. He worked at Target to supplement Jesusita’s income. Their big dream was to own their own home, but they didn’t know how to make that happen. They were living from paycheck to paycheck.

That’s when they found The Unity Council in Oakland, CA, at a local seminar for first-time homebuyers. The couple was guided into a class on budgeting.

“We hadn’t been paying attention to the little things,” admits Ruben. “They had us write everything down that we spent money on, down to a pack of gum. We discovered, for instance, that we’d been spending about $800 a month on fast food!”

The class was the couple’s “wake-up call.” To convert their new-found awareness into a new way of living required something more – financial coaching.

'Financial coaching' can convert awareness into behavior change

Financial-education classes and counseling are vital – the former shares required information and the latter directs clients as they implement specific actions they need to take, such as improving their credit ratings. However, some clients can benefit further from coaching -- which picks up where education and counseling end and keeps the momentum going.

“Coaching is non-judgmental and client-directed,” explains Christi Baker, a faculty member for NeighborWorks America’s training program for financial-capability professionals, adding that the technique is often combined with counseling, such as during a time of crisis when a little bit of direction is needed as well. “It begins with clients exploring what is important to them and then taking accountability for doing what it takes to achieve it. The coach offers support and encouragement, but the client is clearly in the driver’s seat. ”

The biggest shift in orientation for professionals new to coaching is learning to resist the desire to provide the answers to clients’ problems. “After all, we entered this profession because we want to help,” she says. “But to really transform our clients’ lifestyles so that the benefit is lasting, they need to learn to take control. So, for instance, it’s still good to share a suggestion with clients, but you’d ask if they want to hear it, then back off after you put it forward and let them come to the ultimate decision.”

And on the clients’ part, coaching is not how they are used to receiving assistance, Baker notes. “Usually, they are told what to do and that can be comforting. Dealing with finances can be very emotional, and the resistance to change very entrenched. Our relationship with money is formed over a lifetime, after all.”

Baker says that while some clients drop out, all of those who stick with it (generally for three to six months) achieve the goals they have set for themselves. She estimates a third of the clients she has counseled or overseen have dropped out, with many of those returning later. Sheri Powers, director of The Unity Council’s Homeownership Center in Oakland, CA, says only three of the organization’s first group of 60 coaching clients did not complete its program.

In fact, an analysis of the results from the 30 organizations (including The Unity Council) participating in the NeighborWorks America/Citi Foundation demonstration project found that 54 percent of clients with no savings at the beginning had accumulated a median of $668 by the end, 55 percent had decreased their debt by a median of $3,005, and 47 percent had increased their credit scores by an average of 59 points.

“It’s not uncommon for clients to feel uncomfortable, depressed and even angry in the beginning, as they confront the many mistakes, on their part and others’, that got them to where they are,” says Powers. “But we help them discover that there is a way to get to where they want to be.”

That certainly was true for Ruben and Jesusita Hernandez.

Their educational classes evolved into a coaching relationship, leading to the couple’s realization that before taking on the financial obligations of a house, there were other priorities that were more important to them: Ruben wanted to finish school, and the family needed a new car. To get there, they needed an action plan. Their financial coach from The Unity Council helped them sort through their priorities and identify both how to decrease their expenses so they could save, and what they could do to improve their credit scores. For example, they began cooking at home most of the time, leading to the unexpected side benefit of feeling healthier. And in addition to creating their first savings account, their marriage strengthened.

“We used to argue all the time about finances, or we’d make decisions without consulting the other one. But now, we decide together what we need to do. In that way, coaching was a bit like therapy,” Ruben laughs.

Saving money has even become a family affair. “I learned that I can nurture my children and make them happy, without buying them things all the time,” says Jesusita. “Now we talk to the kids about what we are doing. They know we want to buy a house, but have a few goals we have to achieve first. We are very open with them about that.”

Today, their credit score has increased significantly, and they have savings built up to cover an emergency. Ruben has completed his associate degree. The couple has decided together that before going on to earn his bachelor’s degree, he will return to his work as a roofer on a traveling construction crew – a job that pays enough to allow them to save the necessary money for a down payment.

“I figure all I need to do is work that job for about a year or a little more,” says Ruben, adding that in the meantime, he will take his prerequisite courses online. “I’ve missed out on family time before for bad reasons. This time it will be for our future, and we’re both pulling together.”

Four reasons why Americans' ‘financial capability’ is so low

By Pam Bailey, NeighborWorks America blogger
With the insecurities of the Great Recession still fresh, and continuing to bite for others, the need for each of us to be savvy managers of our personal finances is obvious. Yet, 11 years after the U.S. Congress first declared April Financial Literacy Month (changing to “Financial Capability Month” in 2012), it’s clear that too many Americans -- whether college-educated or not -- lack the knowledge, skills and attitude needed to get the most value they can from whatever financial resources they have.

NeighborWorks America commissioned a survey this spring that documented the size of the problem: Chief among the findings is the alarming fact that approximately 70 million (29 percent) of adult Americans have no emergency savings in place, and another 53 million (21 percent) have only enough money saved to get by for a month or less. Those findings are not surprising in light the results of another survey, conducted by the National Foundation of Credit Counseling, showing that 61 percent of U.S. adults -- the highest percentage in six years -- admit to not keeping a budget.

Clearly, all of the education and resources offered by a myriad of organizations and businesses have yet to reach large numbers of people -- or result in the holy grail, behavior change. So, what’s holding back our progress? I asked a few experts, both in the classroom and in the trenches, and here are four dynamics they say must be overcome through innovative outreach, education and programming:

1) Misconceptions about who can benefit 

The NeighborWorks America survey found that more than half of families earning less than $40,000 (52 percent) have no emergency savings. Yes, it’s a no-brainer conclusion. But the problem is bigger than their low incomes. Too many people – including funders, practitioners and potential beneficiaries -- believe that those with low incomes and few assets cannot be helped with financial education, counseling or coaching.

“The perception that low-income people can’t save has persisted for years, ever since IDAs (individual development accounts) were first created in the 1990s,” observes Christi Baker, director of asset-building programs for the Mission Economic Development Agency (MEDA) and a faculty member for NeighborWorks America’s training program for financial-capability counselors and coaches. “But that is simply not true. With the right incentives, education and support, anyone with aspirations, no matter how meager their assets, can improve their personal finances.”

Sheri Powers, director of  The Unity Council’s Homeownership Center in Oakland, CA, adds that individuals with low incomes often think they have less money than they actually do. “We have our clients track every single expense for three months,” she explains. “Then we go through the data with them. They typically have no idea they were spending so much money on things like dining out and movies. But numbers don’t lie, and they discover that they actually aren’t too broke to save.”

MEDA and The Unity Council were among the 30 organizations that participated in a financial-capability demonstration project completed last year through a partnership between NeighborWorks America and the Citi Foundation. The project was designed to identify how to establish and sustain programs that result in positive behavior change, and the results were summarized in a report that offers specific suggestions for organizations looking to enter the field or improve their offerings.

2) Conflicting social signals

Powers adds that Americans live in a culture that stresses “living in the now,” with few immediate rewards for saving. As a result, budgeting is not a skill that is widely taught. “One of our instructors says that in China, people plan for 100 years, into their grandchildren’s generation. But in the United States, there are not a lot of messages in pop culture about the sexiness of saving,” she observes.

As a result, people resist thinking ahead to retirement or an unanticipated emergency.  One of her tactics, Powers says, is to pose direct questions that confront clients with choices and their consequences – in terms that relate to their personal priorities. In the NeighborWorks America survey, “saving for retirement” was the most commonly cited financial goal.

“Chances are good today that you’ll live to be 90 years old,” Powers says, citing a common conversation she has with clients. “Let’s say you retire at 70. That means you’ll need to support yourself for 20 years. How do you want to spend your last 20 years on earth?”

3) Resistance to asking for help

Both the National Foundation for Credit Counseling survey and a poll commissioned by NeighborWorks America last fall, focusing on how adults educate themselves before buying a home, found that rather than seeking financial help from professionals, many people simply consult with family and friends or the Internet.

“People often think they can handle it themselves,” observes Powers.  “They may also not want to admit to personal struggles or to share such intimate information with ‘outsiders.’ But we’ll challenge them and ask, ‘So, how’s that worked for you?’”

Women and single parents often feel selfish if they set personal financial goals, adds Powers. Her team reminds them of the instructions they hear on an airplane: “In case of an emergency, secure your own oxygen mask first, then assist the person next to you – in other words, your children. How can you help them if you don’t take care of yourself?”

The surveys also showed a lack of awareness that many nonprofit organizations offer this kind of assistance at an affordable rate, as well as reluctance to use them once they are aware.

“A couple of years ago,” says Baker, “a group in New York surveyed both clients and potential clients, and it was clear there is a stigma about going to nonprofits. They either didn’t identify as a ‘poor person’ who needed a ‘charity program,’ or didn’t think that nonprofits could employ really expert professionals. We need to dispel those myths. The reality is that nonprofits offer financial-management assistance to people in many income brackets. And the training they receive from NeighborWorks America is highly focused on demonstrating positive outcomes.”  

4) Predatory business practices

Of course, the problems cannot all be laid at the door of un-informed or time-starved individuals with conflicting priorities. As was evident in the recent housing crisis, there are plenty of examples of predatory business practices that prey on consumer weaknesses.

For example, Alex Anderson, one of the financial coaches who serve The Unity Council clients, worked with one “un-banked” client whose records showed a plethora of $8 fees. It turned out the client was using a debit card issued by a discount-store chain, and every time she tried to withdraw more money than she had available, she was charged the fee instead of just being notified of insufficient funds.

“The fees added up and eroded her disposable income by four percent,” recalls Anderson. “There’s a huge industry out there that takes advantage of these folks.”

Next post: The missing piece of the puzzle -- counseling vs. coaching, the story of Ruben and Jesusita Hernandez.

Tax time is ideal platform for financial-education outreach

It's the time when residents across the country think about preparing their tax filings -- and that often translates into stress for a lot of people, especially new homebuyers facing the task of itemizing for the first time. For organizations that offer financial education and counseling programs, it's an ideal opportunity to build your community visibility and reach new clients. The op-ed below was issued nationally by NeighborWorks America, but could easily be adapted for placement in local media, newsletters, etc. 

Don't be 'taken' this tax season

By Marietta Rodriguez, vice president of mortgage programs for NeighborWorks America

Marietta Rodriguez

All of the data aren't in yet for 2013, but it's safe to assume that hundreds of thousands of people became first-time homeowners last year. Becoming a homeowner also means that many people for the first time will find it beneficial to itemize their tax returns. The advertisements about using a paid, professional service for completing and filing tax forms are filling the airwaves, newspapers and other media. Most of these advertisements promise friendly and fast service. But few if any of these ads disclose the cost.

According to a study by the National Society of Accountants, the average cost of tax-preparation services in 2012 individuals without itemized deductions was $143 for a 1040 form and an accompanying state tax form. The same survey found that the cost to have a longer, itemized tax return completed -- required by most homeowners -- was $246.

To put those costs in the context of everyday household expenses, $246 is slightly above the average monthly winter utility bill forecast by the U.S. Energy Information Administration.

How to avoid the cost of tax preparation fees

But taxes are complicated, especially for consumers who have never itemized deductions before, which is usually the case for first-time homeowners. So, isn't using a professional tax preparer a good idea?

It is a good idea to seek trained help, especially if it is available at little to no cost. And that kind of help is available for many people, especially those with low- and moderate incomes, whether homeowners or not.

More than dozens of NeighborWorks organizations and their local partners are ready to work with taxpayers on their forms. NeighborWorks organizations and other community-based nonprofits offering tax preparation services typically do so as part of the Internal Revenue Service's Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs. The VITA program is limited to people who make less than $51,000 -- about the median income in the United States -- while the TCE program is limited to filers who are 60 years or older.

In 2012, more than 92,000 people volunteered to help and more than 3.3 million returns were filed by all VITA sites around the country-- all at no cost.

The attraction of 'fast-money' tax services

Many advertisements for tax-prep services also promise fast refunds – a prospect that is particularly alluring to low-income individuals and first-time homebuyers. However, these refund advances or loans should be avoided.

The truth is, refunds from tax returns filed electronically are available  within a week or two, making the fees charged for on-the-spot "advances" of highly questionable value. According to an analysis of 2012 refund programs by the National Consumer Law Center, the average annual interest rate charged for a quick refund loan exceeds 100 percent. No homeowner would be willing to pay such a rate for a mortgage, and there's no reason anyone should pay that kind of  fee just to receive the money they earned.

So collect your W-2 and other financial documents for 2013 and head over to one of the hundreds of locations that offer free tax-prep services.  A list of locations can be found on the IRS website. It's worth it.

Lease-to-purchase program provides pathway to homeownership

By Pam Bailey, blogger for NeighborWorks America

Kalamazoo, MI, was hard hit by the housing crisis. Traditionally a first-mortgage lender, with 600 loans in its portfolio, Kalamazoo Neighborhood Housing Services could no longer offer that assistance as banks pulled back. Meanwhile, as unemployment also soared, foreclosures swept the city and even now, four years later, home values are stagnating and lack of investment is destabilizing the neighborhoods.

“We needed a strategy to provide a bridge to homeownership, while also stabilizing the community by avoiding the abandoned buildings and absentee landlords experienced elsewhere,” says Matt Lager, executive director of NHS, which recently celebrated 20 years of membership in the NeighborWorks network. “So we developed a lease-to-purchase program.  The formula is simple: We acquire and rehab a vacant or foreclosed property on a target block, lease to clients who are just shy of mortgage-ready and prepare them to become homeowners. The result: We now have a pipeline of families who will transition to homeowners within 12 to 18 months.”

One of the families now leasing a home, with plans
to purchase. 

In the first two years of the program, Lager’s organization acquired 11 houses outright, thanks to a combination of land donations, grants and capital from NeighborWorks America. Five more acquisitions are planned for the coming year. Demand has been high, with 20 “bidders” for every home available. In return for the affordable lease and down payment assistance when the time comes, renters agree to participate in monthly financial-management coaching sessions. If they don’t follow through, or decide not to purchase within two years, they lose their “option fee,” equivalent of one month’s rent. (If participants comply with the action plan they develop with their coach, the purchase deadline can be extended.)

To date, the program has a high success rate: Four of the participants will become homeowners in the first half of 2014; only two have opted out due to what Lager calls the programs initial “learning curve.”

Lessons learned

“One of the lessons we learned in implementing this program is to select and then rehab houses that would attract future homeowners,” explains Lager. “People need to fall in love with a house to stay motivated.”

The other lesson Lager’s team would pass on to others who might want to offer a similar program is that it requires deep relationships with leasers.

“Although the financial-management sessions are focused on budgets, repairing their credit, etc., you can’t help but get involved in all of the other issues that dictate whether these families can be successful at homeownership,” says Lager, adding that the NHS financial-capability coaches have backgrounds in social work. “That means dealing with unemployment, for instance, and similar challenges.”

Foreclosures may have gone down, but the financial struggles of the approximately 21,000 people living in the six neighborhoods served by NHS continue, and the “lease-purchase” program will help provide a pathway to homeownership.

Forty-five years after founding, Pennsylvania group helps future homebuyers achieve ‘financial freedom’

When visitors walk into the NeighborWorks America offices in DC, one of the first images they see is a floor-to-ceiling painting of Dorothy Mae Richardson, along with the quote, “I believe people get their roots down when they own their own houses….take pride in them. That, in turn, is good for the whole city.”

Dorothy Mae Richardson

These wise words can be generalized to cities everywhere, but in 1968, Richardson – the “founding mother” of NeighborWorks America -- was speaking specifically about Pittsburgh, where she enlisted bankers and government officials to support her block club’s efforts to improve her neighborhood. Together, they persuaded 16 financial institutions and a local foundation to put up the loans needed to create opportunities for affordable homeownership. They named the program Neighborhood Housing Services, and it served as the model for other programs that followed -- today known as NeighborWorks organizations.

Forty-five years later, the NeighborWorks network encompasses more than 240 such organizations, and the group founded by Richardson is still going strong, known as NeighborWorks Western Pennsylvania. The dynamics of the community, however, along with the services needed by residents, have changed – and the organization has adapted along with it.

“More people own their own homes here now, thanks to our efforts,” says Margie Howard, education specialist with NeighborWorks Western Pennsylvania. “But we’ve realized that more than homeownership education and counseling are needed.  Residents also need help keeping their homes in good shape, staying out of foreclosure and managing their budgets to make it all affordable. In particular, we are serving a growing number of low-income, single heads of household. Race isn’t the issue here; economics is.”

While the organization has offered financial education for youth for the past five years, recent support from the Heinz Endowments has made it possible to expand its efforts to include the entire family, combating generational poverty.

 “We saw that parents weren’t teaching their children about money management – mainly because they themselves didn’t learn it,” Howard explains. “You see lots of instances of a mom spending $300 on shoes for her child, yet there’s a shortage of food in the house, or maybe the family is about to be evicted. It’s not just about teaching parents how to budget; it’s about changing attitudes and behavior around money.”

Youth don’t get financial education in the schools either, says Howard. “Schools are test- rather than life-skills-oriented.”

One of the youth financial-education classes

The organization’s youth financial-education program enrolls participants as young as 14 up through age 25, with instruction provided in four, one-hour classes. The program’s practical approach encourages participants to analyze real-life spending choices, such as getting ready for prom.

“The average girl realizes it will cost about $3,000 for a one-day event; for boys, it’s more like $1,000.  Many are okay with these figures when it’s their parents who foot the bill,” explains Howard. “But then they are asked what will happen if their mom has been laid off, or is working a minimum-wage job. How will she afford that while keeping up with the bills? Some of the students find ways to cut back like having a friend style their hair or using a parent’s car instead of renting a fancy one. Others decide to skip the prom altogether. The goal is to teach them to analyze their wants vs.  their needs. We see how their thinking changes when they realize they might have to pay for things themselves.”

The key, says Howard, is to separate spending from emotional triggers, starting with tracking where the money is going with a daily log. Ideally, major spending decisions should be made collectively, by the entire family.  Although teenagers typically prefer to attend workshops with youth from their own age group, family members from different generations are encouraged to come to one of the workshops together. Howard recalls one time when a 10-year-old girl came with her mother to a class because she didn’t want to go to the gym with her brother. After the workshop, the little girl went up to the instructor and proudly reported that she had her own bank account. The teacher asked what the girl would do with the savings, and she replied, “I want to have a princess birthday party.”

“A 10-year-old is breaking the cycle by planning ahead to make sure she has the money she needs to meet her goals,” says Howard. “We’ve created a saver!”

Long-term results from the financial-capability workshops are still being assessed, but the anecdotes are promising. One recent evening, for instance, Howard was approached at a community event by Essence Howze, who completed the organization’s financial-education program five years before, when she was just 16. Always ambitious, Howze first began earning money at age 9, manning a refreshment stand in front of her home. “I would sell iced tea and lemonade to joggers,” she laughs.

Essence Howze

However, self-teaching could get her only so far. When she was in 10th grade, Howze saw a flyer on a bulletin board, promoting NeighborWorks Western Pennsylvania’s youth financial-education program. Howze enrolled, and the practical skills she learned, she says, enabled her to open her own savings account and enter community college, where today she is a sophomore studying business management. Always ambitious, she has supplemented her studies with extracurricular activities such as an internship with The Salvation Army’s Career Development Center, and recently started her own business -- which she calls “Silver Linings,” through which she helps others overcome personal barriers like those she faced during a troubled family life.

“Taking the NeighborWorks financial-education course gave me my financial freedom. It helped me avoid so many mistakes, and now I’m helping others,” Howze says, recalling how she showed her college roommate how to read the “fine print” when a credit card company tried to sign her up. “I refer back to the materials I got in those workshops all the time. It wasn’t just financial management I learned..it was empowerment.”

Written by Pam Bailey, communications writer for NeighborWorks America. 

Vermont quarry closing brings economy down; NeighborWorks affiliate rallies residents

It’s a story that’s been repeated across America: What builds a town up is also what, eventually, brings it down. In Detroit, it was the auto industry. In West Rutland, Vermont, it was marble quarrying.

When high-quality marble deposits were discovered in the 1830s – followed by the extension of the railroad into town – Rutland was suddenly put on the map. The simultaneous decline of the famous quarries of Carrara in Tuscany, Italy, transformed it into one of the leading marble producers in the world. (The name of the main “drag”? “Marble Street,” of course.)

The double-whammy of a large strike in the 1930s and the Great Depression, however, took a toll from which the town never quite recovered. In 1986 the quarry was forced to close, plunging the outwardly idyllic enclave of “cows and jeans” into economic decline.

West Rutland today

“At its height, the quarry alone employed 2,400 people,” recalls Ludy Biddle, executive director of NeighborWorks of Western Vermont. “Now, there are only about 2,500 people living in the entire town and the county is the second-poorest in the state. For all social measures, it’s in the red – poverty, unemployment, teen pregnancies and, recently, foreclosures.”

Another recurring theme in America, however, is the recovery from adversity that’s possible when residents come together in response to crisis. The disastrous year of 1986 also is when the organization was founded by a group of local citizens to help the remaining residents stay in their homes by keeping them in good repair.  By the 1990s, the area serviced by NeighborWorks of Western Vermont had expanded from four neighborhoods to the entire county and a homeownership program was added to help both first-time buyers and a trickle of newcomers – primarily artists and families looking for a semi-rural lifestyle.

This year, the organization is celebrating its 10th anniversary as a chartered member of the NeighborWorks Rural Initiative, which strengthens communities with small populations by helping them integrate into their regional economies. It now serves three counties, not only with its original rehab assistance and homeownership counseling, but also with “financial fitness” coaching and foreclosure prevention. In 2012:

• Two foreclosed houses were purchased by the organization; rehab was begun on another five, with two completed and put on the market.
• 24 individuals graduated from the homebuyer education program and another 25 completed the organization’s financial-fitness training.
• Thirty-seven families successfully negotiated foreclosure alternatives with their mortgage lenders. Another 12 received coaching as they made the decision to opt for a reverse mortgage.
• Nearly $800,000 in loans was dispensed to pay for 40 home repairs.

Joan Jackson

Biddle is particularly proud of her organization's participation in the NeighborWorks Green Organization. In fact, in 2010, it was awarded a $4.5 million grant from the Department of Energy for its H.E.A.T. squad (Home Efficiency Assistance Team) – which now boasts the highest penetration rate in the country among similar programs.

Joan Jackson, a retired librarian who has lived in her Wallingford home since 1959, is just one example of the 577 households that received an “energy check-up” in 2012, thanks to the program. Her roof had been damaged by winter ice, the house was so cold she was constantly bundling up to stay warm and the increasing cost of fuel was a persistent worry due to her fixed income. But with the installation of insulation in her basement and upstairs walls, along with air sealing around her doors, ceiling and attic hatch, she is warmer and her fuel bills are 34 percent lower. (Watch a video interview with Biddle, as she explains just how the program works.)

“Twenty-five percent of the people we’ve been able to help with our H.E.A.T. squad are below 80 percent of the area’s median income – individuals who usually aren’t able to participate in programs like this, even though they need it the most,” says Biddle, adding that the organization is now looking for additional funds as the DOE grant sunsets. “The average household we serve spends 3-8 percent of their already-low income on energy. With H.E.A.T, they save an average of 386 gallons of fuel a year – about $1,500 a year. It’s central to our mission to make homeownership affordable.”

Youth Savings Builds Good Habits and Good Citizens

By Rebekkah Barger, NeighborWorks Umpqua
IDA program manager

The financial future of our children is determined, in part, by how much they know about money. NeighborWorks Umpqua offers classes that teach money management skills and financial wellness to our young people between 10 to 17; we call it the “Youth 3As.”  The class introduces financial management concepts at a kid’s level while allowing participants to earn matching dollars towards their own asset purchase. Those asset purchases can be anything athletic, artistic, or academic in nature, hence the name “3As.”Over the years we have worked with many young people, and I would like to believe that our classes have a long lasting effect. To be perfectly honest, though, it’s not that often that we hear back from the kids after they have made their purchase — that is, until I met Morgan and her sister, Quinn.

Morgan and Quinn contacted our office almost two years ago and wanted to save for dance lessons.  They had been very good savers, and by the end of the classes had reached their goal of saving $300 each. This qualified them for our 2:1 match of an additional $600 each — an impressive $1,800 for the two at the end of the program and enough to pay around 50% of their annual dance lesson costs ($1,500-2000 for each girl each year).

I didn’t hear about Morgan and Quinn again until a month ago when Morgan contacted me.  She explained that she was participating in the Miss Outstanding Teen pageant and had chosen financial education and goal setting as her platform. Her goal, she explained, was to teach the concept of goal setting and saving to little kids.  She had made arrangements with the local Boys and Girls Club and had even begun writing grants for some start up money.  She was off and rolling! 

I asked Morgan what inspired her to do this, and she explained that setting goals and then saving for them feels good. For six years, Morgan and her sister had been babysitting, dogwalking, selling doughnuts, doing chores for neighbors and many other fundraising activities to pay for their own dance classes and school trips. Cumulatively, she and her sister had raised thousands of dollars. 

Morgan liked being able to have the things that mattered to her, without needing her parents to pay for it. She thought others should learn to do the same and she is even writing a book about saving.  Morgan is a great example of how our programs create good savers, and good citizens.  

For information about Morgan, or other programs offered by NeighborWorks Umpqua, email Rebekah Barger at rbarger@nwumpqua.org  or visit our website at www.nwumpqua.org

Equity Express: Uniting Financial Management and Environmental Responsibility

By Karuna Mehta,
NeighborWorks America,
Green Strategies program fellow

Just in time for Energy Awareness month, we are sharing a blog about our new Equity Express class. The initiative responds to two major crises of our time – economic and ecological – by increasing the wealth of asset-poor households through consumer choices that are both financially smart and promote sustainable living.

As a young professional with a limited budget, saving money is always at the back of my mind.  While I’ve tried to abide by the same “save, save, and save some more” mentality as my parents, in today’s world it’s easier said than done. Many of NeighborWorks homeownership and financial fitness counselors encounter similar experiences counseling low- and middle-income clients who are hoping to buy homes or simply get out of debt. For most of us, it doesn’t seem possible to save money by committing to living a more sustainable, healthy lifestyle. 

However, hope is not lost on being both "green" and financially savvy. This summer, homeownership and financial fitness counselors from all over Ohio came together to learn how living a healthy, sustainable lifestyle can also help you save some green. The two-day train-the-trainer workshop, hosted in partnership with the Center of Neighborhood Technology, is called “Equity Express” and describes opportunities to save money in nearly every facet of our lives while improving our health and lessening our environmental impact. The workshop introduces counselors to an alternative way of teaching financial education and provides them with resources and materials so they can incorporate sustainable ideas and green living into their own curricula.

Creative Commons image

Equity Express emphasizes the importance of monitoring six areas: budgeting, energy, transportation, food, communications and “green lifestyle,” which focuses on how much “stuff” we consume and buy and how we dispose of it. The materials taught in each workshop are tailored to analyze the trends and events that are occurring in that region—for example, counselors from Cleveland received “Cleveland-specific” information while those from Cincinnati learned about the health and environmental impact in their own metro area.

While some topics, like those revolving around consumption and budgeting, were already common in a number of the counselor’s own curricula, participants also learned about managing energy costs through reducing wasted energy. They began assessing where transportation alternatives such as walking and biking fit into their lives, and reassessed how their affinities for certain kinds of food would impact their health and bank accounts in the long run.

Using resources provided by Equity Express, many of the counselors discovered large potential savings for themselves. Class participants were shocked when they took a look at their own utility bills and calculated the nutritious values (or lack thereof) of their favorite foods. Some even called their children and spouses during break to share the information they'd just learned.

Class participants with their certificates of completion

The workshop also gave as an opportunity to take a look around the office of Neighborhood Development Services (NDS) in Ravenna, Ohio, where the workshop was held. The executive director and his staff have committed to greening their organization, including taking out unnecessary lighting, enforcing recycling and limiting the amount of waste they produce.  NDS board members and staff have iPads to limit the amount of paper they use and their commitment to environmental conservation is inspirational. Not only is the staff creating sustainable housing, but they are “walking the talk” when it comes to their own daily lives, creating a more durable, healthy and inspired workplace for themselves.
 
At the Equity Express workshop, counselors realized the first step in teaching about a low-cost, sustainable life was living by these principles ourselves. We set goals for kicking our addictions to things like fast food and cheap clothes and electronics. Some people vowed to cook a little more often and eat a little less meat, others re-examined the differences between wanting and needing a new smart phone or television. Still others discussed carpooling with their co-workers and pledged to think twice before buying new stuff.

Budgeting and managing expenses is crucial for those who seek financial counseling or help with homeownership, and resource efficiency is also critical to "going green." Sustainable living improves long term and short term health, creates a more durable living environment and helps people save money in the long run, making it an incredible tool for promoting money management as well as equity. Financial workshops such as Equity Express incorporate the importance of sustainable and socially responsible living empower clients and inspire local and global action through simple changes in one's daily routine.