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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.
2
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: [email protected]• Phone and text: 405-819-7039