Minimum Wage Increases in 2018 and the Benefits Cliff: What does this mean for practitioners?

Mae Watson Grote, Founder and CEO | Raquel Paulino, Program Associate | The Financial Clinic

(Originally published in NYATEP’s Workforce BUZZ, November 28, 2017)

Great news fellow New Yorkers, the minimum wage in New York State is rising! Effective December 31, the statewide minimum wage will increase to $10.40, with Westchester/Long Island, small employers in New York City (10 employees or less) and large employers in New York City (11 employees or more) increasing to $11.00, $12.00, and $13.00 hourly, respectively.  This exciting development is the next phase in a larger initiative which intends to raise the minimum wage to $15/hour by 2020, an enormous step forward for working poor families and households statewide.

At The Financial Clinic, we envision a nation where every American is financially secure and has a seat at the table of a more inclusive economy.  In order to accomplish this — to truly break the cycles of poverty — we not only enthusiastically support this minimum wage increase, but we also want to take this opportunity to create additional necessary supports that help minimum wage earners maximize their new earnings for lasting financial security.

So, in real-life terms, what does this actually mean?  We have identified two major strategies for maximizing the impact of the minimum wage increase, from both a policy and services perspective:

Policy and Advocacy

The biggest issue that we at the Clinic are concerned about is how the rise in the minimum wage might unintentionally impact the benefits cliff, a term used to describe a situation when public assistance programs phase down (or worse, phase out entirely), unsuspectingly causing a sudden reduction of benefits for families as their household earnings increase.  In many cases that we have seen — perhaps typified best by a study from workforce leader PHI on the subject — even a relatively small increase in household earnings (either from the number of hours worked or a rise in the wages themselves) can trigger a loss of eligibility for certain benefits, effectively decreasing a household’s total income.

We urge workforce organizations across New York State to learn more about the Clinic’s proposed solutions on our policy platform on topic, which recommends implementing a six-month grace period for Supplemental Nutrition Assistance Program (SNAP or food stamps) beneficiaries and their dependents to continue receiving food and nutrition assistance after the income limit is surpassed.  The Clinic believes this proposal should accompany extending health coverage for Medicaid and New York State Essential Plan recipients and their dependents for one year if participants do not receive health coverage from their new employers.

Direct Services

We are working with practitioners statewide to seize the opportunity to coach their customers on how to plan ahead for wage increases.  Public benefits such as SNAP , housing and child care subsidies are affected with wage increases, and absent of policy change on the issue, this information should be communicated clearly, and disseminated effectively to the people it will most assuredly affect.  On the positive side, an increase in minimum wage earnings is also a unique opportunity to build new savings habits!  Our practitioners are using tools such as the Clinic’s, A Minimum Wage Increase Is the Best Time To Save worksheet, which assists customers map out their benefits, revisit goals and prioritize debts. In addition, the Increase in Minimum Wage = Increase in Scams worksheet, helps customers identify ways they may be vulnerable to scams.

For even more tools and resources to support your participants in maximizing the effects of the minimum wage increase, try a free trial of Change Machine today!

Interested in learning more about integrating financial security strategies into workforce development programs?  RSVP here to join us at a Virtual Briefing and learn how addressing financial insecurities supports better workforce outcomes.

 

Meeting Jobseekers Where They Are Through The Financial Security Ecosystem

Alyssa Keil | Implementation Lead | The Financial Clinic

(Originally published in NYATEP’s Workforce BUZZ, October 30, 2017)

Here at The Financial Clinic, we know that financial insecurity affects so much more than the balance of someone’s bank account. We also know that anyone can make improvements to their financial security, and doing so can actually expedite other accomplishments. This is especially true in the world of workforce development, where a participant might miss an interview because they weren’t able to buy interview clothes or a Metrocard due to lack of savings; is disincentivized to keep a job because old creditors begin garnishing their wages; or is unable to remain employed because rent arrears land them in housing court that requires them to take time off work. The intersections of workforce development and financial security are innumerable, but very often, individuals must seek these two types of services at different organizations, making access more time consuming and less coordinated.

The Clinic’s solution to this is the financial security ecosystem, a holistic partnership approach that builds financial security for the working poor at scale and accelerates sector-specific missions and outcomes. In other words, we support organizations in different sectors to embed financial coaching in their existing programs, thereby increasing the financial security of their participants, which in turn boosts their programmatic outcomes. In addition to support with implementing the actual programs, the Clinic also provides support with fundraising, data analysis, and many other aspects of launching a new service.

Throughout the 2-year initiative, WorkBOOST NYC – our first full ecosystem – the most important lesson we’ve learned is that the financial security ecosystem can be successfully implemented in a variety of organizations. Instead of size of the organization, core program structure, or populations served, it is actually the level of staff buy-in that is most important when embedding financial security strategies. Additionally, though it would be incredible for all frontline staff to be able to handle any financial issue their customers bring to them, we have learned that this is not necessary – staff do not need to become expert financial coaches in order to contribute to the financial security of the people they serve. Programs can see vast improvements in their programmatic outcomes simply by employing what we call “light touch financial coaching,” which are a series of activities that build the foundation of an individual’s financial security.

These lessons are evident in the implementation success of eight different organizations in New York City, including CAMBA and Seedco. After beginning Forward Focus, a new workforce development program within their Brooklyn Homebase location, CAMBA applied for WorkBOOST NYC. In this program, total staff of 5 people, the financial security ecosystem has been implemented using a workshop model that aligns well with the rest of the workforce development services they offer. At Seedco, a national workforce organization, the staff have implemented the financial security ecosystem by providing light touch financial coaching on a one-on-one basis. Regardless of the organizations’ size, structure of services, or the age of the program, a variety of programs have been extremely successful in implementing financial security strategies because of the commitment of the staff.

The Clinic is excited to continue observing and evaluating the implementation of the financial security ecosystem within all WorkBOOST NYC partners, but it is still just the beginning. We hope to launch many more ecosystems with organizations across the country in the near future. RSVP to join the Clinic and Corporation for a Skilled Workforce on December 12 for a virtual briefing on an effective and impactful integration for workforce programs. To learn more about light-touch coaching strategies, check out our upcoming trainings, including “A Financial Security Journey for Jobseekers”, at www.change-machine.org/events.

How Financial Technology Strengthens the Mission of Workforce Organizations

Michelle Saenz | Program Associate | The Financial Clinic

(Originally published in NYATEP’s Workforce BUZZ, October 2, 2017)

Financial technology has changed the way most of us monitor and take control of our personal finances. The impact of financial technology on the financial security field has been such that we at The Financial Clinic have changed the way we do business. In order to meet the needs of our clients, we designed and launched our online financial coaching platform, Change Machine, and needed to research the financial technology landscape heavily to do so. In our research, we found that most financial technologies required a degree of technological access and savvy that a lot of our customers simply did not have.

Change Machine is a resource for coaches who want to meet their customers where they are. It answers questions like, “if my customer has a smartphone, how can they optimize banking technology?” and “what resources can my customer use to optimize banking without a smartphone?”.

Much like our coaches aim to meet their customers where they are, as an organization we’ve sought to meet our partners where they are. For workforce development in particular, practitioners must be armed with the resources to address their customers’ widely varied range of barriers to employment, from how to handle unemployment insurance, to what job seekers need to know about rap sheets, to how to take advantage of banking to support career advancement, and finally, to understanding employment reports.

On a programmatic level, our workforce partners leverage Change Machine to track customer progress, develop financial security knowledge, stay up-to-date on the latest workforce news, and collect data. Parvin Begum, Financial Literacy Manager at Grant Associates Inc:

“It helps me decide on the type of trainings needed for the staff so that they can best assist our customers. For example, if we have a large number of clients interested in our financial literacy services because of credit, I will know to provide more trainings on credit to help serve the needs of our customers…For a client, it can be empowering to see their progress from day one, to see if they feel better about their finances or if they started to save, reduce debt or build their credit. This can all be tracked in Change Machine and given to the client, so it can help both the client and the coach stay focused.”

At the Clinic we believe that workforce development should be customer-led. We are also aware that the field is often metric-driven. Change Machine is a platform that reconciles these processes in a way that ensures career advancement and greater financial security for all.

The Hispanic Community’s Connection to Financial Security

How strong family and cultural ties influence financial decision making

Raquel Paulino | Program Associate | The Financial Clinic

The population of Latinos in the United States is growing faster than previously predicted by the United States’ Census. In 2014, The Prudential Foundation conducted a study of 1,023 individuals in the Latino community as part of a commitment to understand and meet the needs of diverse communities in the United States. In the study, the Bureau of Labor Statistics predicts that by 2020, 30.5 million Latinos will have entered the workforce. The Latino community’s  financial security is affected by a few factors: Strong cultural ties to families, aversion to debt and an unfamiliarity of retirement plans. What does this mean for a more financially secure community?

Strong cultural ties to families impact Latinos’ financial behaviors. Latinos born in the United States are more likely to place a higher emphasis on reducing debt, building an emergency account, saving for retirement, and protecting any investments. On the other hand, those born outside of the States are more concerned with funding their children’s education, saving to buy a home, funding a small business and supporting elderly family members. According to The Prudential Foundation’s study, 67% of those surveyed reported financially supporting at least one other person in their family. This is compared to 52% of the general population. Therefore, there tends to be higher multigenerational support.

These strong ties lead to a stronger dependence on each other for information. When it comes to financial information, 39% are receiving it from their family and 19% from friends. Furthermore, individuals in this community are more likely to rely on each other for information on financial services and products because there is no language barrier between each other. Language is important to financial access and is often an overlooked key to financial security. Hispanics who described themselves as only speaking Spanish or predominantly speaking it at home recognized having a bilingual financial adviser and financial information in Spanish as important.

An emphasis on family ties is connected to strong cultural values. In the Hispanic community, personal debt is a cultural taboo. United States-born Latinos are more likely to place reducing debt at a higher priority (52%) than building an emergency savings account.  Despite this negative feeling towards debt, 69% of individuals think it is almost impossible to live without debt, 35% would prefer to spend all of their savings than go into debt. This is a great opportunity for financial service providers to reach out with possible workshops and dispel that idea since not all debts are equal and considered bad.  Some forms of debt, such as student loans, are at times needed to achieve educational goals.

No matter what the aversion to debt may be, individuals still hold saving for emergency funds and retirement high on the priority list. However, a poor understanding of employer benefits such as retirement plans can be detrimental to long-term financial goals. As the population continues to grow, more Latinos are deciding to stay in the workforce longer than other populations. The United States’ retirement system is already complex and daunting, and this is even more so for the Latino community. 17% of those surveyed in the study are unsure whether their employers provide matching contributions.

Strong cultural ties to families, aversion to debt and an unfamiliarity of retirement plan continue to affect the Latino community, and as the population continues to grow and enter the workforce, a closer look at what financial services can be provided to ensure financial security for this population will be needed. With 23.5% of the Latino community living in poverty and with proposed government budget cuts to anti-poverty programs such as Supplemental Nutrition Assistance Program (SNAP), Rental Assistance, Supplemental Security Income (SSI) and other programs, financial services that can provide sustainable long-term financial security for this community are going to be needed more than ever. The Financial Clinic is thrilled to be partnering with leading Latino service and advocacy organization, UnidosUS, on a national financial security ecosystem to provide individualized support to a projected 30,000 vulnerable families and promote systemic change towards a more inclusive economy.

DREAMers Deserve Financial Security, Not More Barriers

Kristen McGuire | Development and Communications Manager | The Financial Clinic

It costs $725 to apply for citizenship. This of course does not account for the cost of legal fees, English and civics classes, or the time taken away from work to accomplish these things. For the average family of four, this feels like a nearly impossible financial goal: if all four family members were to apply, they would need to save nearly $3,000 for the application fees alone. As reported by UnidosUS (formerly NCLR), more than half of eligible noncitizens cite unaffordability as a primary reason for why they are not yet citizens.

The Trump administration announced on September 5 that DACA (Deferred Action for Childhood Arrivals), which protects nearly 800,000 individuals, would be rescinded despite its vast bipartisan support – leaving a six-month window for Congress to design a permanent solution for the program. As the conversation around immigration escalates, The Financial Clinic implores lawmakers to take into account the considerable — and often detrimental — financial barriers immigrant families face on their path to citizenship, and the vast benefits to the overall economy that new Americans generate.

The 2012 introduction of DACA gave children of immigrants who have spent the majority of their lives here in America the opportunity to achieve social and financial security in this country, through strictly defined requirements for eligibility and a $495 processing fee, to be paid every two years upon renewal. Like the aforementioned barrier to citizenship, more than 43% of DACA-eligible individuals could not afford the fee and were unable to apply. However, for those participating in the program, the results are extraordinary. Despite being ineligible for federal benefits — including health insurance through the Affordable Care Act, food stamps, and federal student loans — 91% of DREAMers are employed with a 69% increase in hourly wages since receiving DACA. They are contributing so strongly to the economy that the loss of DACA workers would reduce the U.S. GDP by $433 billion over the next 10 years. For the sake of building financial security for all Americans, DACA is a program that needs to be expanded, not rescinded.

What’s Next

As we wait for Congress to take action, we hope to elevate the conversation on strategies that empower all Americans, documented or not, towards financial security. We need increased access to bilingual and bicultural financial coaching services that meet customers where they are to help ease their financial journeys into citizenship. Every day, we see the inspiring motivation that leads our own financial coaching customers to achieve their passionately-held financial goals, whether that’s saving for citizenship applications, building college savings for children who don’t qualify for federal aid, or building emergency savings in case there’s ever a family crisis or a threat of deportation. Join us in sharing their stories, standing with DREAMers, and finding a lasting solution for an inclusive and powerful economy.

myRA, Leaving Already? I barely got to know you!

The life and times of the myRA program, and what to do now

Andy Collado | Financial Coach | The Financial Clinic

In late July, the U.S. Department of the Treasury announced their decision to discontinue the 3-year-old myRA program. According to the review conducted by the Treasury, there was “very little demand for the program, and the cost to taxpayers [could not] be justified by the assets in the program.“

The myRA provided a great opportunity for low- to middle- income families to save for retirement. It was a Roth account with no minimum balance requirements, no fees, and no contribution requirements. Unlike traditional IRAs, Roths are funded by post-tax contributions and allow you to withdraw funds contributed without a tax penalty, even before the retirement age of 59 ½, and once you do reach the age of retirement, you are able to withdraw all funds in the Roth and pay no taxes on the earnings. The contributions of myRA accounts were placed into a U.S. Treasury security with a guarantee to never lose dollar value. The myRA was best suited for individuals who had no access to employer based retirement plans, and could not meet the minimum balance requirements or pay fees associated with IRAs at private companies. The maximum balance on the account was $15,000.00, after which the funds would have to be transferred to another institution.  

Americans are not saving enough for retirement, and myRA was created to bridge that gap — particularly for low- to moderate-income individuals. Luckily, various options exist as alternatives to myRA. Here are a couple steps to take now that myRA has started its walk into the sunset:

  1. If you have an existing myRA:
    1. “Roll over” your account into another Roth IRA account. Be very mindful of the fee structure and any minimum requirements. Many companies now offer fee free accounts with no minimums and that is where you should head. The myRA was very limited in investment options, but your new account should have a much wider variety of instruments to use to achieve your retirement goals.
    2. Take a distribution. As the funds contributed were post-tax you can technically take the money and use it as you wish. But you will not do that right? You started the myRA because you saw the importance of saving for retirement so let’s keep that sentiment going strong. Even if you have a very small amount in the account, the power of compound interest can have that small amount grow more substantial, especially if you continue contributing up to the annual $5,500.00 max. In addition, if you withdraw earnings from your myRA account and do not reinvest those funds into another Roth IRA (and do not meet the requirements for distribution such as being at least 59 and ½ years of age), you will have to pay taxes on those earnings, with a 10% penalty added to what you owe.
  2. Getting started with retirement planning:
    1. If your employer offers a retirement plan, sign up. You can contribute up to $18,000.00 a year and select investments that match your risk profile. Generally the funds are contributed on a pre-tax basis. Also, some companies offer Roth accounts for their employees, funded with post-tax dollars. Most companies will match a portion of your contribution to help speed up your savings. Not taking advantage of an employer match is literally leaving free money on the table!
    2. If you do not have access to an employer retirement plan, look into Individual Retirement Accounts. There are two types:
      1. Traditional – pre-tax contributions ($5,500 annual max, $6,500 if over 50), taxed at withdrawal.
      2. Roth- post-tax contribution ($5,500 annual max, $6,500 if over 50), tax-free withdrawals.
    3. Individual Retirement Accounts often have minimum contribution requirements to avoid paying fees (and we would always recommend that you avoid financial transaction costs), so these minimum contributions, anywhere from $1000 to $3000, would be a great financial goal to work towards! To save for this goal securely, we would recommend that you open a free online savings account, which have no minimum balance requirements or maintenance fees.
    4. Whether you are saving retirement, for a minimum contribution, or for a rainy day, remember to set up an automatic transfer of funds from your checking account to your savings account. By making the transfer automatic, you can make sure that you never forget!

Finally, remember that you can always meet with a financial coach who can help you clarify your financial goal, decide upon a target retirement savings amount to aim for, and set up the necessary transactions to start (or continue or increase) your savings.

Stay up-to-date on the latest news!

Introducing the New and Improved Credit Report

The benefits might not be what you expect

Credit reports have been notorious for inaccuracies caused by insufficient data collection standards. In the most extreme cases, individuals have been mistaken for terrorists or marked as deceased because of an incorrect connection with someone of a similar name (a problem so pronounced it was featured on John Oliver’s Last Week Tonight). Thankfully, the three nationwide consumer reporting agencies – Equifax, Experian and TransUnion – are collaborating on an initiative to enhance the accuracy of credit reports called the National Consumer Assistance Plan (NCAP).

On July 1, new credit reporting standards went into effect instituting a new minimum for identifying information on public records for credit reporting (it now needs to have a name, address, AND social security number and/or date of birth), plus a minimum frequency of courthouse visits to obtain newly filed and updated public records of at least every 90 days. About 12 million people are expected to see an improvement in their credit scores through the removal of most civil judgments and tax liens, with an average score increase of 10 points thanks to the new regulations.

The cumulative effect on the lives of low- to moderate-income Americans will go a long way towards achieving lasting financial security:

  1.  New Opportunities

Credit scores determine an individual’s eligibility for life-changing opportunities including housing, student loans, and in many states, employment. Stress around credit is far too common with our financial coaching customers: according to data collected through our web-based financial coaching platform, Change Machine, 22% of customers in 2016 came to a financial coach because of an issue with credit, including the 24% who were “credit invisible.” When having a place for a family to live is at stake, no one should face a rejection because of inaccurate or out-of-date information on their credit report.

  1.  Relief from the Dispute Process

The Clinic’s coaches experience the struggle of helping customers navigate the credit reporting dispute process firsthand when they find incorrect information. It is a lengthy, time consuming process to collect the necessary documents and fill out the correct paperwork. For someone working several jobs just to put food on the table, this onerous process can be a challenge to say the least. Then, as an FTC study found, most consumers (nearly 70 percent in their study) who complete the dispute process continue to see inaccurate information on their report. With the improved standards of data reported, there will be less inaccuracies to dispute, easing the burden of removing incorrect or questionable information.

  1. Looking Forward

The next phase of the NCAP takes effect on September 15, setting a 180-day waiting period for medical debt before including it on a credit report. It will also remove medical debt from consumers’ reports once it’s paid by an insurer. We all know how complicated health insurance is – the forthcoming changes to reporting medical debt will ensure disputes with insurers and delays in payment can be resolved without an individual’s credit score taking an unnecessary hit.

The Financial Clinic applauds these changes that place higher standards on the reporting of negative credit items of public records and medical debt. We believe that this will lead to fewer financial security hurdles for our customers and an easier dispute process for coaching around the country.

What challenges do your customers face because of their credit reports? Do the new standards alleviate these challenges or is there still room for improvement? Join the conversation on Change Machine’s SHARE community!

Want to learn more? Join the Clinic on August 22 for a virtual presentation on Pulling and Reviewing Credit Reports.

 

Why Repealing the Affordable Care Act Means Families Lose Homes

Adam Ciminello | Executive Coordinator | The Financial Clinic

Today, the Senate Majority Leader Mitch McConnell announced he was formally postponing the previously anticipated vote on a full repeal and replace of the Affordable Care Act (ACA), the signature legislation of the Obama Administration from which more than 22 million Americans gained health insurance coverage. While the ACA contained notable imperfections and its long-term goal of making Americans more healthy is still undetermined, it nonetheless represents the most transformative and ambitious attempt towards guaranteeing health insurance as a basic human right afforded to all American citizens. Now, as has been loudly and frequently promised for more than 7 years, the GOP seems poised to complete their stated mission of repealing and replacing the Affordable Care Act – perhaps now as soon as early July – gambling with the security and health of millions of low-to moderate-income Americans with little regard for their wellbeing. The new bill, the Better Care and Reconciliation Act, has undergone multiple iterations and a formal assessment from the nonpartisan Congressional Budget Office, but the conclusion remains the same: more than 20 million people would lose healthcare coverage by 2026. There is little faith to be had or reason to believe that this reality will suddenly change whenever it is put before a Senate vote.

Not only would a repeal of this scale be a mistake in terms of personal health, it also has the potential to weaken financial security for these groups of Americans, a topic our friends and colleagues at the Center for Social Development at the University of Washington St. Louis explored extensively in a recent study released last week. In the study, findings documented that low-income Americans who gained health insurance – the vast majority of which came from the insurance marketplace – were much more likely to make their rent and mortgage payments, with the rate of home delinquency for households without access to employer insurance falling in some cases by 31%. This is consistent with previous studies tracking similar outcomes: fewer Americans have struggled to pay medical bills and bills in collections when personal health care costs have declined, providing Americans with the security to know that they can brace for a crisis in their personal health and reserve their entire focus for a full recovery.

“Housing stability contributes in turn to community stability”

These studies represent a reality at The Financial Clinic that we are committed to confronting; all forms of social well-being are interconnected. When Professor Michael Sherraden, Founder and Director of the Center for Social Development, writes, “Housing stability contributes in turn to community stability,” it underscores a basic principle that we unequivocally support: you cannot address a single barrier to opportunity effectively without addressing (or, at least, attempting to address) ALL barriers to opportunity. We know this to be true because we also know the opposite to be true: health insecurity contributes in turn to financial insecurity, contributing in turn to community insecurity. We see this firsthand in our work at the Clinic and the communities we are committed to supporting, like Mary (pseudonym), a Clinic customer who lost her job because of a high-risk pregnancy that made her physically unable to work. Her husband had left her with nothing, and as her medical debts continued to increase, she could no longer pay any of her bills and her credit score dropped to 454, falling into one of the lowest credit score levels. Shortly after giving birth to her daughter, she was evicted. Mary and her newborn were left with no home and over $7,000 in debt. Mary, like all too many uninsured Americans, deserves more from her elected officials and her story illustrates the need to expand coverage and assistance for those unable to afford insurance, not the other way around.

While today Americans can breathe a sigh of relief that the bill has been postponed, similar to the corresponding House bill, it will inevitably be put before a vote. When that disappointing day arrives, this bill will not only have a catastrophic effect on the ability for low-to moderate-income Americans to obtain healthcare, it will also have a larger ripple effect on the economy and the financial security of ordinary Americans. With more than 22 million Americans expected to be uninsured and enormous cuts to Medicaid, the impact that this single piece of legislation will have on all forms of social services could be enormous: families facing a medical crisis and unable to afford the care they need out of pocket could experience an inability to make their rent, afford food, or go to work as a result. In the strongest terms possible, The Financial Clinic condemns the Senate’s likely vote to repeal and replace the Affordable Care Act and – echoing the work from Professor Sherraden as a reminder of the holistic consequences this bill will fundamentally have on low income communities – implores the Senate to work to improve the ACA instead of dismantling it entirely.

Stay up-to-date on the latest news!

3 Steps to Maximize Financial Coaching Success

Megan Kursik, Assistant Director of Partnership Management, and Kristen McGuire, Development and Communications Associate | The Financial Clinic

“The only thing to do with good advice is to pass it on. It is never of any use to oneself.” -Oscar Wilde

We are so grateful to the Center for Financial Security (CFS) and Asset Funders Network (AFN) for passing on their advice to the financial coaching field: Last week, they released the results of the second annual Financial Coaching Census, disseminating recommendations for quality improvements based on our collective national experience. It’s thrilling that our field has grown to a point where we can meaningfully reflect on how to make it even more impactful. Luckily, it seems clear we all want the same things! Here are three strategies we can help you to implement, all identified as important areas for growth by the Financial Coaching Census:

  1. LEVERAGE TECHNOLOGY TO ENHANCE FINANCIAL COACHING

Financial coaching requires a lot of moving pieces, with a strong emphasis on “A LOT.” The amount of paperwork can feel overwhelming, between printed information for and from customers and written notes to track progress and outcomes. And if you work at multiple sites, you find yourself becoming the local bag-lady/gentleman. The Clinic created its web-based financial coaching platform, Change Machine, to lighten the figurative and literal load of coaching, transforming a filing cabinet of binders into a dynamic system of resources to learn the latest financial security strategies, print tools and worksheets for customers, manage cases and appointments, and connect with fellow practitioners across the country. Plus, managers and funders get the hard evidence they need that a program is effective through organic data collection and reporting.

  1.  EXPAND TRAINING AND ONGOING DEVELOPMENT OPPORTUNITIES

So many strategies, so little time! Many who work in social services struggle to find the time and resources to train staff, and this can be an even harder feat for the 48% who reported having integrated coaching models. Through years of experience building the capacity of over 360 organizations in 30 states, the Clinic’s team has designed concise, interactive trainings that support frontline staff to use financial security building strategies. We help financial coaches practice soft and hard skills to juggle strong customer engagement with data collection and provide organizational development sessions for program managers to fully integrate and oversee the coaching work. In-person trainings are supplemented with follow-up technical assistance calls and a monthly series of virtual trainings on Change Machine to continuously increase knowledge and skills. And an exciting new release – a brand new Train the Trainer curriculum provides all the tools you need to train new staff for years to come.

  1.  INVEST IN TARGETED RESEARCH AND EVALUATION

Just as the Financial Coaching Census builds the case for improving the field as a whole by collecting and analyzing the right data, we need to do the same for our individual programs to maintain relevance and impact. One of our priorities in creating Change Machine was robust data collection and reporting capabilities. Through an intake survey coaches use in the first meeting to get to know new customers (featuring questions from the Center for Financial Security’s Financial Capability Scale), data is collected to paint a picture of customer populations, including demographics and presenting issues. As the coaching process progresses, customer retention, engagement, and outcomes are consistently tracked. Managers can easily pull reports to review coaching performance, customer needs, and overall program success. This not only allows for program optimization and quantitative proof for funding, but also highlights systemic barriers facing customers and organizations and provides the data to make the case for lasting change (check out the Clinic’s Refund529 win for proof!). Best of all, reports can be customized to meet the specific needs of your program.

Conclusion

The results of the 2016 Financial Coaching Census offer proof that financial coaching is an inspiring and crucial field. Of course it is not without its challenges. Even when we know what we need to improve, actually implementing it is a whole new beast. But as we discovered in an Evaluation’s Endgame, the results are worth it. When you’re feeling a void in effectiveness — in technology, training, or evaluation — we’re here to help. Together, we can see our collective influence rise.

To learn how you can engage with the Clinic, contact our Assistant Director of Partnership Management, Megan Kursik.

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A Note on Congress’s New Budget

Defunding a Pathway to the American Dream

Mae Watson Grote | Founder and CEO | The Financial Clinic

united-states-capital

We learned on Monday that Congress has approved a crucial government program that gives struggling low-income families the opportunity to achieve the American dream. As somebody who has spent her entire career working for economic justice and a more inclusive economy, I am struggling to find a way to describe my reaction to this news: Discouraged, dismayed, or devastating hardly seems to cover it.

Every day we see customers who are working hard — multiple jobs, low wages, volatile hours — and yet they struggle to pay the rent or feed their family, much less invest in their future. The sobering reality of their immediate economic needs often stifles their larger dreams of owning a house or starting a business because of the financial chasm that lies menacingly in front of them, impeding that first step towards saving for anything more than next month’s rent.

For nearly two decades, AFI has forged that gulf through matched savings accounts: Individual Development Accounts (IDAs). IDAs are a critical tool for working poor Americans to build financial security by matching earned income deposits dollar-for-dollar to use towards life-changing assets: purchasing a first home, capitalizing a business, or funding post-secondary education or training. The matching funds are accompanied by support services, like financial education, credit repair and counseling, and guidance in obtaining tax credits. IDAs are particularly powerful because they recognize and address the stark reality that average incomes for so many American families leaves a gaping hole in their ability to afford a home or college education, crucial assets for building financial security for generations to come.

Simply put, we know that the absence of assets in low-to-moderate income families represents a fundamental barrier to economic mobility. The evidence also points to the fact that AFI does extraordinary work in helping Americans build their future. Without the latter, the former’s ability to achieve this on their own has just been become unnecessarily more difficult.

The Clinic stands with the principles of AFI; we will strive to not lose hope in these far-too-often trying times. Despite this devastating news, our work continues because the communities who need us most will continue to depend on our support and advocacy. Financial security, economic mobility, and the pursuit of a more inclusive economy are basic human rights that cannot be ignored, regardless of whether our current Congressional leadership rightfully recognizes them as priorities.