Improving Family Financial Health Presented by: Lauren Leimbach June 2010

CFR’s Mission Research, develop, and promote low-cost consumer friendly financial product and services Build the capacity of community-based organizations to provide asset-building strategies to their constituents. Establish best practice standards for other financial services providers. CFR is a non-profit organization. Serve consumers, CBOs, and Partner with financial service providers. Particularly want to build the capacity of CDFIs.

Examples of CFR’s Work To-date Low-cost high value prepaid debit card Emergency loan program Financial service kiosks Behavior based financial education programs Technical assistance to economic empowerment programs VITA sites, SEIU, UNITE-HERE card programs. Alternatives to payday lending. Alternative ways to deliver banking services Product based financial education Bank on programs Active member of Alameda-Contra Costa-Marin county asset-building coalitions. Health organizations, e.g. CC and AlaCo Public Health started coming to the asset-building coalition meeting

The Health-Wealth Connection Recognizing the relationship Chronic stress of poverty and inequality creates health disparities Family financial security : positive health outcomes Requires a programmatic approach Financial empowerment is a therapeutic paradigm Health organizations had already made this connection—Lifecourse Perspective

Assets create opportunity. Assets over Income Assets Drive Positive Family Outcomes Financial holdings: savings, real estate, investments, a business Knowledge and skills: an education Social bonds and community relations: the ability to influence decisions that affect their lives Assets create opportunity. CFR started doing the research

The Effects of Asset Accumulation Economic Well-Being Social Well-Being & Civic Engagement Child Well-Being Health & Psychological Well-Being Asset Accumulation -Financial -Tangible -Social Study by Lerman and McKernan published in 2008

Assets and Child Well-Being Enhanced Family Stability Parental Modeling of Asset Accumulation Reduced Child Stress Educational Savings Improved Education Outcomes Improved Health Enhanced Residential Stability Access to Jobs Improvements across generations Civic Engagement

What is Family Financial Health Financial security, Financial stability, and Financial Capability Meeting Basic Needs to live in safety and dignity Withstanding an interruption of income Knowledge to make informed choices Capability to move up the economic continuum Pass benefits to the next generation Inter-generation wealth and opportunity Black-White wealth gap has quadrupled in the last 23 years.

Health Programs as a Delivery Channel An Important Touchpoint Going out to the people Scale The Power of Trust A Respected Source of Information Discrete Goals Identify client financial issues Connect clients to appropriate resources WIC in each county sees over 20,000 people a month

First Step: Staff Buy-in Training on the Health-Wealth Connection Improving family financial capabilities will improve health outcomes Acknowledging personal financial issues Providing tools Collaboratively designing interventions

Our Societal Pathology: Money Myths Myth: Acquiring things make you happy. Reality: Personal happiness comes from connections to family and friends AND helping others. Myth: It’s good to use credit and spend money you don’t have. Reality: Credit/ Debt will make you poorer unless the money is invested in something that creates wealth, e.g. education, house, business, job tools.

Money Myths (cont.) Myth: Consumption is good. Reality: Economic sustainability requires balanced resource management. Myth: It is OK that some can accumulate vast amounts of wealth while others are poor. Reality: Wealth disparity de-stabilizes societies and lowers everyone’s quality of life. Can we focus on consuming without being concerned about producing or replenishing resources? Poor=no legally mandated living wage, basic needs are not being met.

Assessment Tools Family Economic Security Interview Financial Knowledge Checklist Assessing Financial Fitness Asking questions

Identifying Client Financial Issues Clients may request specific help --Is there something else that should be addressed? Observing client’s life situation Client disclosures Starting the discussion Asking clarifying questions Active Listening

Basic Financial Interventions What Improves Family Financial Stability? Tracking Inflows and Outflows (Budgeting) Being “Banked”—avoiding predatory financial schemes (Asset Preservation) Safety-net Savings (Asset Development) What are the Basic Financial Interventions—you might be able to offer. Let’s start by looking at the Research that says that the 3 most important components of a financial stability strategy for low-income households are……

Goal: Connecting Clients to Resources Income Supports Financial Products & Services Financial Education Employment Asset Building Local Resources: AC CAN Resource Directory BEST Resource Guide 2-1-1 FESP and AC CAN Members

Creating a Financial Action Plan Acknowledge client’s financial strengths Address the financial vulnerabilities Establish concrete next steps Use an effective referral protocol Create a follow-up structure Harnessing the learnings of Behavioral economics to help people make beneficial behavior change

Financial Action Step: CFR Card Banking Services an issue for your client? Use Talking Points hand-out and brochure to explore the card option Facilitate card enrollment Encourage immediate action Follow-up

For More Information Lauren Leimbach Phone: 510-559-8638 Email: Lauren@CommunityFinancialResources.net Website: www.CommunityFinancialResources.net