More than 50 percent of those coming through their door “never budgeted and never saved money in their whole life,” according to a nonprofit providing financial literacy education in Springfield.
After a turbulent year-and-a-half pandemic, the importance of budgeting for hard times has never been greater.
“You hear it out there that you need to have three months or six months of savings put away in order to be able to manage in case of some type of major catastrophe, and I think with the pandemic we sort of saw that... if you didn't have any anything to back up your income, you're going to be in danger of possibly experiencing homelessness and losing your house,” said CPO Vice President of Community & Neighborhood Development Patricia Deck.
Free to the public and open to those of any income level, CPO’s Making Sense of Money series can give those in Springfield the tools to understand their relationship to money.
“It's about helping participants to understand how they feel about money — how their emotions are really attached to their habits, their spending and savings habits,” Deck said. “Looking at that can help them better to understand maybe what's important to them. And what's maybe not so important anymore.”
In overseeing the basic budgeting class, Deck said many participants would be surprised at how much they spent. She recalled one participant who realized after tracking every penny, she was spending more than $20 a week for “fancy coffees.”
“And so that really opens your eyes to like to look at, ‘why did I do that, why is that so important to me?’ And she realized it really wasn't as important to her as her financial future.”
That was certainly true for Cynthia Campbell, who is a graduate of Making Sense of Money.
“You have to really kind of ask yourself, ‘Do I really need a pair of white shoes right now, or do I have a pair in my closet that would equally work?’ And it became almost like a new skill set for me to try to differentiate between these wants and needs and see how frugal I could be.”
Campbell is a retired solid waste and recycling facility manager and said she made “good money” at points in her career before losing “most of it” in the stock market and with bad habits. Since her retirement, she’s had to learn to live with a lot less.
“I'm going on 70 and I really hadn't done much with budgeting. All I ever did was get money and spend it, get money and spend it. I just lived month to month. I really didn't think about where the money was going. I knew how much I had and when the money was gone, it was gone. This class was a real eye opener. I don't want to live paycheck to paycheck anymore.”
Stephen Garmon is also a former student of the program but now facilitates it as well. Garmon works in financial aid at MSU and took the class three years ago to bone up on budgeting before buying a house.
“I know that it helped me. I know that it helped others in the class, when I took it. And so, I wanted to do the same for others,” he said.
According to Garmon, the course takes place over four weeks. The first week, students learn about how “our emotions on money drive our actions.” The assignment for that week is to track your own spending habits, which Garmon said was often the biggest hurdle for those trying to budget for the first time.
“Awareness is the biggest issue we see — just not being aware where their money is being spent and how their money is being spent. And that's really the first step in financial budgeting success. Without knowing where your money's going or what your spending habits are, it's going to be a tough lesson.”
The next week is focused on the want versus need distinction, while the third week is about how to build a budget.
In the last week of the program, CPO brings in community partners from banks and other financial institutions to answer questions and set students up with savings accounts if they need them. The goal is for each participant to have a working budget by the end of the program.
“Each student will build a creative budget that really fits their monthly income. And so when they walk out of that class after four weeks, they are going to be walking out with some great habits,” Deck said.
To incentivize savings, CPO offers to match students up to $100 if they agree to leave money in a savings account for at least three months after the class.
Campbell called this incentive a “win-win" and said it encouraged her to follow through with the lessons she had learned. Because of her newfound savings, she is looking forward to paying off her car soon.
While CPO's primary focus is on “low-to-moderate income” residents, Deck emphasized that their Making Sense of Money courses were open to all in the community.
“I hope we help folks get a handle on their finances so they can remain stable, be housed and all those things that go with financial wellness,” she said. “But what we've realized and what we have learned is that even folks that could be making hundreds of thousands of dollars a year still need a budget, and many people don't know how to how to budget even at those income levels.”
Because of this, CPO has taken these classes to professional workplaces across Springfield.
"We partnered with Cox,” she said as an example. “Because Cox was seeing that many employees weren't even living paycheck to paycheck and were actually withdrawing from their retirement plans. The students that we had in that class had a relatively high income, but they had gotten themselves into about eight or nine different loan situations because of all their schooling. And they weren't certain how to navigate and didn’t have time to figure it out.”
Because of their busy work schedules, CPO conducted these workshops in Cox hospitals and clinics, which set aside time for their employees to get the training.
Cox employee Cheryl Dozier said that program helped her get through a difficult period of her life.
“I'm going through some hard financial times, and just in the last few years rebuilding my life financially. I lost a house and so my credit is not the best. Cox allowed me to take this course and it really helped with my budgeting. It motivated me to get things under control financially.”
Before the class, Dozier often felt “overwhelmed” whenever thinking about her financial issues, which “just leaves you frozen with fear, and you don't do anything about it and your credit just keeps getting worse.”
She added that she probably would not have gone out on her own to get help if not for Cox’s intervention.
“I’m just grateful I no longer feel that fear and even though I still have a lot of problems financially, I feel like I can actually manage them now.”
Interested readers can go to cpozarks.org to find out more about their classes.
Financial education is especially important for those escaping abusive relationships, according to one domestic violence shelter in Springfield.
“Financial abuse is a huge problem, and it can appear in a lot of different ways,” said Sarah Spillman, Harmony House shelter education and services coordinator. “So maybe an abuser doesn't let someone work, or an abuser might not work themselves, and therefore might force the survivor to use all their money on the household. The abuser uses money as a control tactic, doling out money as they see fit rather than working in a partnership to run the household.”
Harmony House is a Springfield non-profit that “provides services like housing and education... to women, men and children who are survivors of domestic violence.”
Since financial abuse is “the one type of abuse that binds all survivors,” Spillman said it was important to provide education to those who come through their doors.
“Most survivors of domestic violence are also survivors of financial abuse. It is extremely common... But I think that one of the positive outcomes that we see pretty frequently is people learning to trust themselves,” she said.
“It takes a lot to leave an abusive relationship, and you know folks come in questioning the decisions they've made in the past, and we are able to see them start to rebuild their lives and part of that is often rebuilding their credit, opening a bank account, getting a job for the first time, being able to save towards the goal that they've set themselves.”
Spillman added that the way Harmony House has gone about providing this financial education has changed over the years. They used to provide classes like many other non-profits providing education about financial literacy. But they found that approach did not meet the needs of the survivors they serviced.
“What different studies have found is that completing a course doesn't necessarily mean that a student will have greater financial success in the long run. And that is largely due to the fact that generalized information is not necessarily what a student in one of those classes needs.”
Instead, Harmony House provides individual coaching, which often is easier for domestic abuse survivors to connect with.
“Residents are coming into shelter and trying to start a new life independent of their abuser or anyone who is in control of their finances. So that's definitely an area we want to make sure they feel comfortable and confident in. And we want to help in any way we can. And after we started doing individual education, we saw that comfort.”
Interested readers can go to myharmonyhouse.org to find out more about their services.
One of the biggest financial commitments one can make is buying a house, and for Habitat for Humanity, ensuring their clients make good financial decisions is crucial to their success.
Habitat for Humanity is a worldwide non-profit allowing prospective homeowners to build their home along with volunteers to make buying more affordable. Springfield Habitat for Humanity Program Director Nancy Williams said that “financial education” has been a core component for the non-profit since its founding.
“People seem to have a lot of fear about things like paying off large debts or saving for retirement or planning for their kids’ further education. And they get stuck. A lot of people get scared planning for that. So, you know, you see them gain confidence when they form a plan, which can make them more... successful once they’ve built and bought a home,” Williams said.
For the past 10 years, Habitat for Humanity Springfield has offered “Tools for Life” with year-round classes concerning financial literacy and other topics. While some of these classes are specifically geared toward those buying homes through their non-profit, most are open and free to the public.
“It’s not necessarily a one-size-fits-all situation. People at our program come to us on all different walks of life and levels, so some people might want more information on reaching a very specific and immediate goal,” she said.
Joshua Wilmoth and his family just moved into their new home after working with Habitat for Humanity for several years to build and buy the house. The Wilmoths have eight children, which made buying a home to fit their needs difficult.
“It's hard to find a place to live when you have that many kids. It's hard to find a place that's affordable and going to work for the dynamics that you have in a family,” he said.
To go through the Habitat for Humanity process, the couple completed 350 hours of work, many of which included financial training.
Despite the couple’s high level of education, neither realized how their student debt could prevent them from a housing loan until taking these classes.
“We both went to university; my wife has a master's degree as well. And it was pretty much all through student loans," Wilmoth said. "And you're making for a long time barely above minimum wage, raising kids and having bills and everything else that comes along with living life. You can't ever really get ahead with paying down that student loan debt. So, it just keeps sitting there, and slowly growing and then... it starts to look like a house payment.
“So, most loaning organizations don't want to give you another house payment on top of the one you already have. We didn't really understand how our own debt-to-income ratio at the time was such a huge obstacle until it became one.”
Through classes taken at Habitat for Humanity, the two learned how best to manage their debt to qualify for a home loan. Their family moved into their newly built house in North Springfield earlier this month.
“Our kids, many of them came from foster care and then adoption. They've experienced lots of trauma, and so it's important for us to get into something permanent, so that it would be there forever for them. We have that now.”
Wilmoth added he recommended Habitat’s classes for anyone in Springfield.
“Their tools are fantastic for pretty much anybody in the community, not just for Habitat owners or Habitat partners. Pretty much anybody can participate in most of their classes and they're all valuable lessons and valuable resources on how to better manage life,” he said.
Those interested can learn more at habitatspringfieldmo.org.