The 1,2,3’s of Financial Literacy

Imagine a life where you had no access to money. You have no access to a checking or savings account and no credit cards. Your partner doesn’t let you work and gives you an “allowance” to pay for groceries and other necessities. Of course, you must account for where the money went. 

Now imagine that you are no longer with that person. You have no job, no income, no credit and no bank account. This is the plight of many survivors of domestic violence. The issue becomes a bit more complex, because not only do they not have money, they often have no concept of how to handle money.  The answer: A financial literacy training for the RISE Program clients at Caring for the Hungry & Homeless of Peekskill (CHHOP). Rehousing in Supportive Environments (RISE) is a 24-month collaborative program focused on helping survivors of domestic violence and their families move forward from the trauma, isolation, and financial instability arising out of domestic violence. 

“Many of our RISE clients have experienced financial abuse,” explains LaRon Getter, RISE, Program Manager. “It’s a way for the abuser to take control of someone’s life. They are not allowed to work or have access to money. It’s a control and power dynamic. ”

Financial Education

In September 2020, CHHOP entered into a partnership with Mid-Hudson Valley Federal Credit Union (MHVFCU) to start a financial literacy program for RISE Program clients. Many of the survivors of domestic abuse have no clue about handling finances. Sometimes they come from a socio-economic background where they weren’t taught about finances to begin with. They don’t understand budgets, or credit or what it takes to buy a home. “Finances are often the farthest thought from the minds of domestic abuse survivors. They are in survival mode. They are focused on putting food on the table, paying rent and keeping the lights on. They are only thinking about their survival needs in the moment,” says Getter.

“One of our guiding principles is our commitment to financial education through life’s journey to empower people to build a better financial foundation,” comments Michael Mattone, vice-president of community impact, MHVFC. “We’re more than just products and services. We want to guide people so that they feel comfortable and confident with their financial decisions.”

Mattone notes that everybody has a unique set of financial circumstances, needs and goals. 

With around 98 percent of RISE program participants reporting financial abuse the question became how can we help them get back on their feet financially? MHVFC and CHHOP collaborated to develop a plan to meet the specific needs of RISE clients. The six hour-long sessions cover banking, building a budget, understanding credit, debt management, first time home buyer and a live question and answer segment with a bi-lingual branch manager. 

Organizing Finances

Many of the strategies taught in the Financial Literacy program can be used by anyone. Getter and Mattone offer the following pointers for getting and keeping your financial house in order. 

“Everyone needs to assess their own situation to see what they need,” says Mattone. 

• Assess your financial condition and decide what your needs are and what you want from your financial situation. Do you want to develop credit, pay off debt or build a savings account?

• Create openness around your financial life. People can be embarrassed about their finances, but Mattone says you don’t have to be perfect, just aware.

• Understand that reaching financial goals is a process, it won’t be a quick fix. You have to take a long-term approach to building financial stability.

• Have a budget. Understand your budget and stay within it, advises Getter, who observes that people aren’t always conscious of what they are spending. Mattone agrees, and notes that when you have a budget in place you see all aspects of your financial puzzle and it gives you your full financial picture. 

• Keep the plan for your budget in one, easily accessible place where you can see everything at once, advises Mattone. 

• How do you make a budget? A basic budget will include everything --- rent, food, the $5 coffee that you have every day. Look not only at your cable bill, but also at your subscriptions such as Netflix. 

• Do not overspend. Getter emphasizes that you should not spend more than you have, especially on credit cards. You do not want to incur credit card debt.

• Use your bank when you withdraw money so you aren’t subjected to extra fees, advises Getter.

• Save. People often forget to save. A huge part of a budget is paying yourself and making sure that you have an emergency account, says Mattone, who adds that the amount can be small, but it must be in the budget. 

After RISE clients complete the program, Getter says that clients have a new way of looking at finances. “They understand budgeting and what it means. They understand the importance of credit — a high credit score can take you farther than cash,” concludes Getter. “They learn what you have to do to buy a home. They realize that it may be beneficial to buy a home rather than rent. They recognize the overall importance of financial planning.”