Increasing Financial Capability in Young People:

Engaging approaches that build financial, social, and personal assets

Developed by: Inger Giuffrida

August 5, 2014 from 10:45 a.m. to 12:30 p.m.

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Opener

• Group 1: What experiences do young people have with money or financial issues?

• Group 2: What resources do they have?• Group 3: What emotions do they have around

money and financial issues?• Group 4: What do they want to get out of financial

capability work?• Group 5: Where do we as staff and practitioners

serving young people want them to get?

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Session Objectives• Explain the relationships among financial, social, and personal assets using

a balanced portfolio model.

• Describe specific strategies and systems for building financial capability that lead to financial, social, and personal asset development.

• Use specific tools, information, and techniques to engage and support young people in financial capability.

• Describe ways to make financial information contextually relevant using the materials developed by the Jim Casey Youth Opportunities Initiative (Keys to Your Financial Future).

• Explain the roles adults can play that can support and provide opportunities for young people to increase their financial capability and develop financial, social, and personal assets.

• Use one activity to introduce credit scoring.

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Financial Capability

• What is financial capability?

• How is it different from other approaches?

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Financial Capability

Knowledge & Skills

Experiences

Ability to Use K, S, and E

Access to Products,

Services, and Support

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Increasing Financial

Capability of Youth

Involvement of youth in the

planning, design and implementation

of financial capability

Peer-based financial education

Financial coaching and counseling

Experiences— ”normal”, risk-

taking opportunities with money and

consequences

Ongoing access to information,

products, services, and support

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“Financial Independence” Means . . .• “Being stable with your money”• “Learning; learning is most valuable—

learning what brings happiness”• “Being independent and self-

sufficient; having an emergency fund”• “Understanding components so you

know what you’re working with; having overall knowledge of financial components”

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Biggest Obstacles• College loans and college debt• Not having a place to “fall back to” as a

young person from care• Systems like having to have deposits for

things; “we don’t have anything to back us up”; no support

• Not having education or a career path—need degrees

• Not having money and income to reach goals; having money or income comes first

• Not having one-on-one help with a plan

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Most Important Topics

• Finding money to save in my budget—50%• Ways to save and invest—33%• Understanding taxes—why I pay them, how

to avoid paying too much, how the money is used, etc.—33%

• Reading a credit report and improving credit history—33%

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Most Important Topics

• Understanding lease agreements and rights are a renter –17%

• Finding financial aid including loans for post-secondary education and training—17%

• Understanding how my beliefs and attitudes about money influence my relationship with money—17%

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Most Preferred Way to Build Financial Capability

• Which approach to building financial capability do youth tend to prefer?

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Most Preferred Way to Build Financial Capability

• One-on-one sessions with a financial coach or mentor—86%

• Financial education in a training session with my peers—14%

• Through social media or technological applications (Facebook, MySpace, Blogs, Texts) —0

• Using online financial literacy curriculum (working independently with a computer based curriculum that includes simple games, quizzes, short video clips, etc.) —0

• Playing online or IRL games—0

Participant’s Workbook

Modules 1-7

Keys to Your Financial Future:Products

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• Module 1: Asset Building: Unlocking the door to long-term benefits building

• Module 2: Good Credit: Your score in the game of life

• Module 3: Money Management: Cashing in on financial success

Keys to Your Financial Future: Modules

Core Modules

Prior to enrollment in Opportunity Passport™

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• Module 4: Education and Training: The power of knowledge for work and college

• Module 5: Housing: Reality in realty

• Module 6: Transportation: Enjoy the ride

• Module 7: Saving and Investing: Making the change by keeping it

About the Module NamesThe module names were developed by the 2012 Jim Casey Youth Opportunities Initiative Youth Leadership Institute through a collaborative brainstorming session.

Keys to Your Financial Future: Modules

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• Competencies addressed contextually in multiple sessions for the purposes of reinforcement.– Setting goals– Building assets– Contingency planning– Protecting assets (including your identity)– Operating as a savvy consumer– Making decisions/evaluating the risks and returns of a product,

service or situation– Making and keeping a budget– Managing cash flow– Fixing or improving credit and/or managing and reducing debt

Keys to Your Financial Future: Repeating Competencies

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Asset-Building Framework

• Asset– something that you own that has

value.

– you must own it, be able to control it, and be able to make decisions about it.

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Balanced Asset Building Portfolio

Financial Assets

Social Capital

Productive Assets

Physical Assets

Portfolio = a grouping of assets.

Your asset building portfolio is basically the assets you have and are working towards.

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Why Credit Reports & Scores ARE Important

• A bank or credit union may use them to decide whether to give you a loan.

• A credit card company may use them to decide whether to give you a credit card.

• A landlord may use them to determine whether to rent an apartment to you.

• An insurance company may use them to determine whether to give you insurance coverage and the rates you will pay for coverage.

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Why Credit Reports & Scores ARE Important

• A utility company may use them to figure out how much deposit you must pay before they will turn on your electric or gas.

• A cell phone provider may use them to determine what plans you may be eligible for and the rates you will pay.

• A potential employer may use reports to determine whether you will get a job.

• Credit scores are completely based on information in your credit reports.

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The Credit Reporting Agencies

• Equifax• Experian May have different• TransUnion information. Must check all 3.

– If over 18, order from website, call them or write to them.

– Use www.annualcreditreport.com for annual free report.– May not be useable if you have been the victim of

identity theft.

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Can You Have a Credit Report if You are Under 18?

• You cannot have credit report if you are under 18 unless:– You are an emancipated minor– You are an authorized user on someone’s credit

card– You have student loans– You live in a state where you can be younger

than 18 to enter into a financial contract – Your identity has been stolen and used by

someone else to get credit or services

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• Calculate your final credit score using the 15 cards.

• Start with the first card, and go through them in order.

• Notice which actions make your score go UP, go DOWN and those that have no affect.

Exercise in Pairs

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FICO Score Distribution

Payment History; 35%

Amounts Owed & Credit Utilization Rate; 30%

Length of Credit History; 15%

New Credit; 15%

Types of Credit Used; 10%

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Roles for AdultsRole for Youth

Financial Capability

Knowledge & Skills

ExperiencesAbility to

Use K, S, and E

Access to Products,

Services, and Support

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Thank you for participating

• Inger Giuffrida, Financial Educator and Asset Building Consultant

• Email: inger.giuffrida@gmail.com• Phone and text: 405-819-7039