Financial Literacy Classes Help Clients Manage Money

Situation:
Often young families learn the “hard way” how to manage their money. As young adults, they may not have had good role models to teach them money management skills or did not take any classes in school to learn them. According to a Money Magazine Poll, 28% of workers indicated that they were one setback away from financial disaster. These young families struggle with credit problems and major changes in their lives. (Divorce, medical bills, loss of income/jobs.)

Response:
ISED offers the “Iowa Saves” program in Des Moines which helps young families accomplish their dreams of buying a home, finishing their education, or starting a business by setting up IDA accounts for saving. ISU Extension contracts with ISED to teach the Financial Literacy classes. At least 4 or 5 twelve hour classes are taught yearly. A pre and post questionnaire is done for each class.

Results:
A twelve hour class was taught in October, 2005 and January 2006. A total of 19 participated in the two classes. There were 12 female and 7 males. Eleven of the participants were Black/African American /Sudanese, 5 white, 2 Asian, 1 Hispanic.

At the beginning of the classes, the majority of the students indicated that they “almost never” tracked their expenses. All but one of the participants tracked their expenses during the weeks of the class. All agreed they had learned much about their spending habits from tracking their spending and at least 6 of them indicated that they would keep tracking their spending after the class was finished.

Five of the nineteen participants indicated that they had a small savings account when they started the class ($1,000 or less). After the class, 10 indicated that they had opened up some type of savings account for emergencies. Two of the participants had set up appointments through their HR offices at work to find out more information about their retirement plans or 401K’s.

Approximately 11 of the participants indicated that credit had been a problem for them in the past and they looked at credit as a Very Bad Experience. During the class at least 14 of them sent for a free credit report. One indicated that she had been avoiding checking hers because she knew she had medical bills and did not want to see the picture. After receiving her report she discovered that several of her medical bills had been written off and she was going to be able to tackle and repair her credit history much easier than she had ever expected. “Thank goodness you encouraged me to check my credit. Now I am motivated to move ahead and try to accomplish my dream of buying my own home.” Said Latisha.

Comments written by participants included: “This class really impacted my financial future. The information is down on a level I can understand. I am more knowledgeable about interest rates, CD’s, money market and banking terms, and retirement accounts. This class really woke me up financially.” “I believe that this class is awesome; this should be taught early in life. (High School). I learned a lot and would recommend it to everyone.” “This class helped my husband and I communicate about our family spending plan and problems we have had with money. We really want to save now to buy our own house. And, hopefully better our family living situation.”

Additional comment: Jose and Maria who took these classes approximately two years ago have now started a part time lawn/snow business to bring in extra income for their family of five. After moving here from California 5 years ago, they have now purchased their own home and Maria is taking classes to further her education to eventually become a teacher and earn more income than at her present job.

Contact:
Margaret VanGinkel
Family Resource Management Specialist
10861 Douglas, Ste. B
Urbandale, Ia. 50322
Phone 515-727-0656
E-mail vangin@iastate.edu

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