In late 2004, eight Pittsburgh area financial institutions, from one of the smallest to a regional powerhouse, put aside their competitive rivalries and, working with NeighborWorks Western Pennsylvania, a leading housing counseling agency, forged a community-based alliance that has turned into a roaring success.
The idea?
Reach out to potentially vulnerable young people, 16 to 19 years old, in historically underserved neighborhoods across Pittsburgh and Allegheny County, PA, to instill the virtues of saving, budgeting, understanding credit, sorting out “needs” versus “wants” and help them develop permanent financial skills and habits so they can become successful homeowners and consumers.
The numerical goal adopted by the eight erstwhile rivals, later joined by a ninth, was ambitious: at least 200 at-risk young people who would graduate each year from a free, after-school gathering called My Money, My Life, meeting once a week for six weeks after the school day let out. The group committed to an initial five-year run of the curriculum ending in 2009, meaning at least 1,000 teens would be a big step closer to financial self-sufficiency than they were before the initiative took flight.
To encourage at-risk teens to participate, the decision was made to hold classes in neighborhood churches, community centers and other inviting forums convenient to local schools and homes; to provide a free dinner at each class; and—most significantly—to dangle a carrot in the form of a fee-free savings account containing an initial $100 deposit from a participating financial institution.
That’s not all. Parents, guardians and caregivers attending the graduation ceremony would receive a certificate to enroll in a financial literacy or homebuyers club or receive credit counseling at no cost. Finally, JobCorps would provide academic, vocational and skills training to the graduates at no charge, leveraging their newfound skills.
For the nine financial institutions now in the initiative, sharing the spotlight produces several key benefits:
• Individual overhead is greatly reduced.
• Counseling agency staff members take the lead in managing classes, with the banks in a supporting role.
• Each financial institution has the opportunity to teach a course within its respective footprint.
• Each institution is responsible for extending no-fee accounts only to those graduates of the classes they teach.
• An ongoing, low-cost promotional campaign raises awareness of the classes among potential attendees while emphasizing the role of the banks.
• Grants from several philanthropic organizations further defray expenses.
So, with nearly 80 percent of the five-year outreach program complete, how has My Money, My Life fared?
As in the first two years of the initiative, at year-end 2007, graduates displayed significantly enhanced understanding of financial concepts and skills based on self-evaluations conducted before and after classes. Students demonstrated:
• 132 percent increase in understanding the costs associated with
buying on credit;
• 113 percent increase in understanding costs associated with using payday lenders;
• 74 percent improvement in the use of a spending plan or budget;
• 46 percent step-up in setting aside money for the future;
• 36 percent increase in the practice of discussing money management with family members.
“My Money, My Life is a great investment for the future. It showed me ways to be more responsible with my money and spending. It is very helpful to my college life,” said Sequala Thomas, 19. Added Ennis Davis, 16: “This class taught me a lot and I will never forget the staff.”
Building on success
Encouraged by the success of a curriculum built around fundamentals, NeighborWorks and its nine classroom partners now conduct an advanced class for graduates of the starter course who want to deepen their knowledge. The advanced curriculum focuses on setting personal goals, buying versus renting, and elements of financing a car, using credit cards, and obtaining a small business loan. As the advanced class concludes, graduates enjoy cake and soft drinks and make arrangements to have another $150 added to their pre-existing savings accounts.
The nine Pittsburgh area financial institutions that remain committed to the success of My Money, My Life are: Dwelling House Savings & Loan Association, ESB Bank, First Commonwealth Bank, First National Bank of Pennsylvania, Huntington Bank, National City Bank, Northwest Savings Bank, PNC Bank and Sewickley Savings Bank, in some cases inheriting participation in the program from an acquired institution and sticking with it.
In 2009, these eight banks and one savings and loan will review the results of My Money, My Life and determine what can be done to build on the great success of this initiative. One thing is certain: For these bankers, their students and the community at large, much good has already been accomplished.
To learn more about the workings of My Money, My Life, contact Emily Keebler of NeighborWorks Western Pennsylvania at 412-281-9986.
