CDAC Spotlight: Hands-On Commitment to Financial Education

October 01, 2014
By  Ben Joergens

You’re never too old or too young to learn. This is certainly the case when it comes to financial education. This area is a significant focus for Old National Bank’s (ONB) community engagement efforts, and we are now beginning to see numerous financial institutions devote more time and talent to help raise financial education efforts in the communities we serve.

With my role as ONB’s Financial Empowerment Officer, education is a daily focus as we attempt to help as many people as possible become more financially literate. In my particular role, I work daily to cultivate partnerships, research and develop curricula, and teach classes on personal financial management to children and adults of all ages.

Unfortunately, personal finance is a subject most schools aren’t fitting into their curriculum. Banks continue to work with state legislators to encourage the addition of personal finance as a required course in school systems, especially in high school. Students continue to make choices that are detrimental to their credit score before their “adult life” even begins. The concepts of savings, budgeting and understanding credit, unless taught by parents, can be nonexistent in young students’ minds. That’s why it’s so important to partner with organizations like Junior Achievement, Girl Scouts and others to bring programs to students that introduce them to money management as well as global economics.

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Recently, ONB partnered with a local detention center to bring a financial literacy program to female inmates who have been incarcerated for substance abuse-related crimes. The program encompasses a variety of important personal finance topics, including the basics of banking, understanding and rebuilding credit, creating a budget, slashing expenses, identity theft and much more.

The goal of the detention center’s program is to rehabilitate the whole person, and financial education is an important component of that goal. This program helps these women learn about money management in a comfortable and safe environment. Learning and understanding the basics brings them hope and empowers them to break the cycle.

In this 12-week program, participants meet weekly for an hour and a half. At the end of the program, a post-test is administered, consisting of 60+ questions related to the topics that have been covered. The inmates are asked a variety of questions, including calculating compound interest and determining how long it will take their money to grow, based on how much interest they are earning.

When this program began, the inmates were not extremely interested and were unsure of how it would benefit them. As we got deeper into the program, we built up a great amount of trust, shared personal examples, and coached participants on how to empower others to help solve financial issues that may come up. By the end of the 12 weeks, those women who completed the program in its entirety had an average test score above 80 percent, and 6 inmates scored above 90 percent!

While the test results were better than expected, more exciting still were some of the participants’ personal stories. One inmate took what she learned during class, pulled her credit and found out that someone had stolen her identity while she was incarcerated. Using the lessons she learned in class, she was able to call those companies where credit was opened, explain what happened and place fraud alerts on her account. Now, when her sentence has been served and she is released, she will have a much better start on improving her financial situation.

Another inmate who completed the program and was just released from jail called me recently. She had such an enlightening tone to her voice that day; I will never forget this call. She shared that since she was released from jail, she reunited with her daughter and had already accomplished many things. She opened a second-chance bank account. She landed a new job, found out where her previous 401(k) plan was located and rolled it over into her new plan. Last but not least, she established a 529 Child Savings Account (CSA) for her daughter and committed to an automatic transfer from her checking account into the CSA so she wouldn’t miss the money coming out of her paycheck. She quoted something she learned from one of the classes in the program: “When you don’t see it, you don’t miss it!”

It’s stories like these that reinforce the positive impact that financial institutions can have if they take their employees’ expertise and share the knowledge with those less fortunate who haven’t been introduced to financial education. Working together with community partners, schools and other organizations, we can all make a difference in people’s lives, and encourage them to empower others around them!

Bridges is a regular review of regional community and economic development issues. Views expressed are not necessarily those of the St. Louis Fed or Federal Reserve System.

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