NextCity: Financial empowerment centers help city residents improve their fiscal health

NextCity, August 6, 2018: Financial empowerment centers help city residents improve their fiscal health

Kim Rogers works at Clarifi, a nonprofit agency whose mission is to help people manage money better so they can get ahead. In one of the workshops they run, called “Show Me the Money,” one of the first questions they ask is, “What do Nicolas Cage, Mike Tyson, MC Hammer, and Toni Braxton have in common?”

The answer? They’ve all declared some form of bankruptcy at some point.

“It’s not about how much you make, it’s about how you manage what you make,” says Rogers.

Of course, money-management challenges don’t affect everyone to the same degree. Selling off a yacht or a vacation home (or two) to settle bad debts is a far cry from going hungry or getting evicted. At the lower end of the economic ladder, people and families risk more than their homes, or losing hard-earned dollars to usurious interest payments or overdraft fees. The biggest cost of financial trouble for households with limited means may have nothing and everything to do with money — losing the sense that a better future is possible.

Research has shown that poor households typically report higher stress levels than higher-income households and that the kind of stress most associated with being poor also leads to an inability to plan ahead. For example, in Philadelphia, Rogers’ agency, Clarifi, was seeing many public-housing tenants or tenants with Section 8 rental-assistance vouchers miss out on the chance of a lifetime: moving into their own homes for the first time, through the Philadelphia Housing Authority’s Homeownership Program.

With this program, Section 8 families can convert their rental-assistance voucher into a mortgage-assistance voucher that lasts up to 15 years. As another option, they can obtain the equivalent of up to one year’s worth of rental assistance to use to cover down payment and closing costs. And public-housing residents who have been renting one of the housing authority’s scatter-site single-family homes would get the opportunity to purchase the home they’ve been renting. Clarifi partners with the Philadelphia Housing Authority (PHA) to provide homeowner counseling to participants of these programs.

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