What does it mean to be economically self-sufficient? To be financially stable? Many of us hear those terms, or something similar, and learn of their importance starting from an early age and may even get some exposure to tools and tips from family, teachers or mentors, but studies show that nearly 70% of Americans are not financially literate. So we’re talking about a LOT of people who aren’t getting the financial literacy knowledge they need to understand or manage their finances.
Financial literacy – having the skills and knowledge necessary to make informed and effective decisions about finances – is hard. Understanding savings, credit, doing your taxes, just basic numeracy… it’s all very complex, and there’s little to no financial literacy education built into our public K-12 and higher education systems. In fact, the Council for Economic Education’s most recent biennial Survey of the States found that only 17 states require high school students to take a course in personal finance, and just 20 require economics.
Some of us have the advantage of having financially literate parents or other mentors to teach us the basics, or access to some type of educational opportunity that provides financial literacy education. But what about those who, on top of lacking those advantages, are also struggling with other challenges like limited English proficiency, housing instability, minimal education background and/or little to no work experience?
At SkillWorks, we understand that for the under and unemployed, it’s not just about putting someone through a training program and helping them get a job. We can’t just stop there. In order to help people become financially stable for the long term, it’s about getting a good job and being able to understand how to navigate the many financial and other economic systems and use them to properly manage their income and build their assets.
That’s why we’re proud to work with Citizen’s Bank to help support workforce and education organization that also integrate financial literacy into their programs. Together, along with SkillWorks’ Funders Group and other key partners, we are helping to address issues of economic opportunity and stability in part by supporting training and education programs that also incorporate financial literacy training and support so our participants who are placed in jobs or who matriculate into college can also have the tools to help manage their finances once they begin to earn or enter school.
One of our current grantees is starting early with financial literacy and support, filling in gaps where family and school may not have the capacity. Cambridge Housing Authority offers a program called the Work Force, an intensive academic and work readiness program for Cambridge public school students and their families who are also public housing residents, starting in the 8th grade through high school and now into college, as part of their Postsecondary Success Initiative. In addition to academic support, college prep, case management and other wraparound services, students and their families are also provided with financial education, and students in grades 10-12 enter into “exploratory jobs,” summer jobs and other paid work experiences in which they have the opportunity to earn and save money for college. All Work Force students also have access to CHA’s Matched Savings program, in which CHA provides a 1-1 match for up to $2,000, to be applied to students’ postsecondary pursuits upon graduation from high school. The goals of the Matched Savings program are to:
- Connect CHA families to financial education, coaching and resources,
- Cultivate a culture of saving and asset building
- Lessen the burden of postsecondary costs
Results so far: SkillWorks is in its second year of supporting CHA’s Postsecondary Success Initiative, serving the high school graduating classes of 2016 and 2017. Of the 38 students from those classes currently participating in the Matched Savings program, students have saved an average of almost $850, which can be put toward tuition, books, housing and other postsecondary costs. And not only are these students saving money for school, but they’re also learning about the importance of savings and making smart financial decisions, and gaining access to financial education coaching for themselves and their families.
With support from Citizen’s Bank, SkillWorks has also been able to support other community-based workforce development and training programs that incorporate financial literacy education and support to ensure their clients achieve sustained success.
Last year, SkillWorks funded the Somerville Community Corporation’s (SCC) First Source Jobs Program, which provides one-on-one support services to help Somerville residents improve their skills, access jobs, and advance into self and family-sustaining careers. Along with intensive coaching, job search and placement support and other wraparound services, jobseekers in the First Source program who live, work or go to school in Somerville and meet their income requirements, have access to a robust array of financial literacy classes and supports. The financial literacy classes help folks develop savings and budgeting strategies, learn how to make smart financial decisions, and use credit wisely to sustain and build assets. SCC also provides first-time homebuyers classes, foreclosure prevention counseling, and offers Individual Development Accounts, which are matched savings accounts (not unlike 401(k)s) participants can use toward education and/or training.
SCC has long focused its attention on advocacy around affordable housing development, ownership, and policy, but also understand the importance of equipping residents with the knowledge, training, and opportunities they need in order to obtain and sustain employment and build assets to be able to afford housing.
SkillWorks has also deepened our partnership with Jewish Vocational Service (JVS), one of Greater Boston’s largest workforce development organizations, which also recognizes the critical importance of providing financial literacy education and supports to their jobseekers, training participants and incumbent workers in order to truly achieve sustained economic stability. In partnership with the City of Boston’s Office of Financial Empowerment, Local Initiatives Support Corporation (LISC) Boston, and United Way of Massachusetts Bay and Merrimack Valley, JVS has been named as one of the City’s Financial Opportunity Centers, offering free financial literacy coaching to Boston residents.
Learn more about the Office of Financial Empowerment and successes to date in their recent report – Wealth Building at Tax Time: Boston’s Financial Check-Up as an Economic Mobility Tool.
Learn more about United Way’s Financial Stability Centers and read their latest white paper – Raising the Bar: Transforming Financial Support Service for Low-Income Residents by Promoting High Quality, Standards-Based Financial Coaching.
With SkillWorks’ support of JVS’ Bridges to College pre-college training and coaching program for biotech, and newly-developed healthcare information technology career pathways, now even more Bostonians have access to these integrated services providing postsecondary and career training and coaching services in conjunction with financial literacy education and coaching so they can attain employment, achieve credentials, and build assets for long-term success.
One success story out of many at JVS is Yolande, a Haitian immigrant who enrolled in Bridges to College. She had a nursing degree in her home country but unfortunately, her credentials were not recognized here in the US. Before finding Bridges to College, she was working as a presser at a dry-cleaning business, struggling to make ends meet for herself and her family. But once she found JVS, she excelled in the pre-college programming and took great advantage of the financial coaching opportunities. Now, after graduating from Bridges to College, Yolande is pursuing a Nursing degree at Bunker Hill Community College, and has been able to reduce her family’s monthly expenses by 18%!
We congratulate Yolande and pledge to continue partnering with and supporting programs, initiatives, funders and employers that are truly addressing issues of financial insecurity and inequality by providing access to education and support.
At SkillWorks, we believe the cycle of poverty can be broken, with access to the right resources, supports, and education. To do our part in this, SkillWorks and partners like Citizens Bank, JVS, Cambridge Housing Authority and Somerville Community Corporation and many more organizations throughout Greater Boston and the Commonwealth are providing and investing in proven strategies like integrating job training and education with financial literacy.