Our Latest Success Stories: Diverse Approaches in Using Money Smart
The FDIC often hears from Money Smart partners across the country how they are successfully using our curriculum to teach individuals the basics of handling their finances. With the observance of Financial Literacy Month in April, this installment of our series of Money Smart News "Success Stories" looks at how public and private organizations are using different approaches to deliver financial education.
For example, Luke W. Reynolds, Chief of the FDIC's Community Affairs Outreach Section, pointed to educators' use of incentives to "help motivate consumers to take desired actions after a Money Smart workshop, whether it is to open a new deposit account or commit to a savings goal."
He noted the accomplishments of the Campaign for Working Families (CWF), a nonprofit organization in Daytona Beach, Florida, that uses Money Smart to help low- and moderate-income working families in Volusia and Flagler counties learn how to reach their financial goals. With the help of a grant from the Annie E. Casey Foundation, during the most recently completed fiscal year (July 2008 -June 2009), CWF gave participants in its Money Smart course a variety of incentives. Each of the 93 individuals who completed eight of the 10 modules received a $50 U.S. Savings Bond. Of those, 33 met their six-month savings goal and received a second $50 Savings Bond. Those 33 individuals had saved $22,354 over the six-month period, a great accomplishment given that most had no goals for saving money before taking the classes.
Irma Matias, an FDIC Community Affairs Specialist, pointed to how "financial education can benefit everyone regardless of how little or how much they earn in income." Matias gave the example of Carol, a participant in the CWF's January 2010 Money Smart class, who said she learned that "it's not how much money you earn that's important - it's how you spend it. I think everybody should take the class. There were people in my class who make a lot of money and people who live paycheck to paycheck. The class makes you more aware of what you're doing with your money and if you have enough saved."
Financial education also can be used to help those who may have practically no income, yet need to learn the basics of money management. Since October of 2008, the United States Probation Office's South Carolina district has collaborated with Carolina First Bank in Greenville to conduct Money Smart classes for offenders, so they will be better prepared to manage money as they transition into the workforce. With each six- to eight-week course, bank managers volunteer their time to teach the classes alongside probation officers. As of March 26, 2010, a total of 100 offenders have graduated from the classes. "We are even going into the halfway house to give offenders this valuable information before they are released," reported Melissa Anderson, U.S. Probation Officer in Greenville.
Participants are encouraged to take positive steps, including starting a savings or checking account and reviewing their credit report with an eye toward building or cleaning up their credit record. "The program also allows qualified participants to put money into a savings account that will be matched by special funding," Anderson said. "With our program in South Carolina, the match is three-to-one, so for every dollar they save, participants will have another three dollars added that can be used toward buying a home, small business development and post-secondary education. The intent is to help those of modest means establish a pattern of regular saving and ultimately obtain financial independence."
The FDIC's Matias added that "regardless of how financial education is delivered, it is helpful for non-banks offering financial education workshops to partner with financial institutions." She recalled comments from U.S. Parole Officer David Harrison from the Charleston office. "Some of the most valuable information presented came from the Carolina First representatives who gave testimonies about some of their past financial mistakes," he said. "This, in turn, 'leveled the playing field' by allowing each participant to recognize that we have all made financial mistakes in life that can be overcome."
Reynolds said that feedback from Harrison and other Money Smart educators also "show the value of real-life stories and experience-sharing to help make lessons more realistic, understandable and practical." As another example, Robin Arcus of the Consumer Credit Counseling Services in Durham, North Carolina, who has taught monthly workshops over the last three years, noted that "participants learn the most when they ask the questions... and they come up with good ones."
Another successful program is that of Houston Reads, a nonprofit organization that provides free literacy services to adults and their families. Houston Reads teaches students at local colleges how to teach the financial education classes, and they, in turn, provide financial literacy workshops and classes to English language learners and GED students.
Finally, here are some thoughts on educating young people from David Conrad, President and Chief Executive Officer of The Citizens National Bank in Putnam, Connecticut. He noted that after speaking about personal finance to approximately 300 high school juniors and seniors, "it was all too clear that Generation Y craves instant gratification. Too often the lure of credit cards can get college-bound youth trapped in a spiraling financial future." Conrad noted that his bank has had "wonderful success" teaching the workshops and emphasizing the importance of building a mainstream banking relationship early in life. Conrad suggested that other financial institutions reach out to schools to do the same.