Financial literacy

Moderated by Rick Badie

It’s a new year — time, perhaps, for a financial resolution or two. Today, executives for two nonprofit organizations write about the need to achieve and manage personal finances. And a client of a national credit score improvement program offered at Ebenezer Baptist Church shares her success story. To comment, go to: http://blogs.ajc.com/atlanta-forward/

Financial literacy a must for all

By John Hope Bryant

With 40 million unbanked and underbanked people across the nation, America reflects a tale of two nations: the haves and have-nots. In Atlanta, that disparity is particularly acute.

You have the most promising city for African-American entrepreneurship and small-business ownership in the nation. You also have areas such as Vine City which, according to the FDIC, is the fifth-most unbanked area in America. Given that 47 percent of all employers now pull a credit report, one could argue the question now is not whether you have a public record, but what’s the status of your credit.

I see the unbanked and financial illiteracy issue as the civil rights issue of this generation. This time the issue is class, not race. Today, more people don’t have a bank account than didn’t have the right to vote in 1962 (26 million). There are more poor whites in America than poor anyone else. To quote civil rights icon Andrew Young, “To live in a system of free enterprise, and to not understand the rules of free enterprise, is the very definition of slavery.”

Increasingly, whether you are black, white, red, brown or yellow, all anyone wants to see is more green. When you deal with the issue of class, you get race for free. One is wrapped up and incorporated within the other.

The lack of having 40 million Americans fully vested and invested in the broader economic system means America is holding back its own national economic prosperity. It’s Atlanta’s problem, too.

In low-wealth urban and rural neighborhoods and even outside military installations, we find check cashers, next to payday lenders, next to rent-to-own stores, next to title lenders, next to liquor stores. All feed on low levels of hope and financial IQ. I used to believe this targeting of the poor and low-wealth population was based on some form of discrimination. Now I know it’s not. It simply target marketing. These businesses are targeting a 500-credit-score customer.

My vision is simple: Rob them of their customers.

At Operation HOPE, and at HOPE Inside at Ebenezer Baptist Church, we are moving people’s credit scores an average of 120 points over an 18-month period. Take Eboni Brown Robinson, who came into our offices with a credit score in the low 500s and walked out 10 months later with a score 74 points higher.

Young and I believe everyone should receive an electronic, debit-card-accessed bank account at birth, which would radically improve financial security, help the environment, create a direct government pipeline for federal, state and local benefit transfers, and single-handedly rock the nearly $500 billion alternative financial services industry back on its heels.

Finally, post-Great Recession in America, every child should receive mandatory financial literacy education in school — kindergarten through college. We can move Atlanta and our nation forward, building on the strong and positive legacy of civil rights justice, and into a new reality of silver rights empowerment for all.

John Hope Bryant is founder, chairman and CEO of Operation Hope, a nonprofit that teaches financial literacy.

Nonprofit teaches finance game plan

By Eboni Brown Robinson

I applied to participate in the 700 Credit Score Community after having been denied my dream job. The reason behind that denial was due to my credit score. It was too low, and I had too many items in collection.

Doubtful that I would get accepted because my score was so far from 700, I was overwhelmed with joy and so excited when I received the email saying that I had been accepted into the program, which is offered at Ebenezer Baptist Church as part of Operation Hope, a nonprofit that teaches financial literacy.

This would be the opportunity I needed to receive guidance and motivation as well as a game plan to get my overwhelming debt and falling credit score under control. After attending the first session, I was elated to see that I was not the only person having debt issues, and that I would be in a cohort of like-minded individuals ready to get their finances in order.

During my tenure in the 700 Credit Score Community, I have learned several things. The first and, I believe, most important was that you can’t change your credit score overnight. It takes time and patience and the practice of one day at a time.

I learned also to evaluate my life style. I needed to determine the root of the problem. Was I was living a caviar and champagne life with a Wendy’s and Coca-Cola budget? Was it the mistakes I made in my young adult life that were now catching up to me? Did I just not make enough money?

In all honesty, it was a combination of all of the above. So based on the principles I have learned thus far in the class, I began to budget my money, which forced me to live within my means. I put aside the thoughts that I would never become debt free and have a great score and filled my mind with more positive thoughts.

After adjusting to my new lifestyle and mindset, I was very anxious for my second counseling session to report to my coach all the things that I had put into place, and to receive her feedback. During that session, I learned that due to the work I had done within a three-month time frame, I had increased my score 52 points. To date, I have increased my score a total of 78 points.

I continue to apply the concepts I learned from the program, and I look forward to learning more. I am excited to cross the finish line and attain a 700-plus credit score. All things are possible!

Eboni Brown Robinson lives in metro Atlanta.

It may be easier to get financial counseling

By Chris Honenberger

Many Georgians will begin 2014 with a new year’s resolution to improve their finances. Some will scrimp and save to pay down debt, while others will try to build wealth and financial stability. While some will succeed at achieving these goals, others will fall short. What actions will determine who succeeds and who fails?

The keys to success are a combination of a strong will, a good action plan and help from a trusted and knowledgeable financial education partner. Finding a reliable, third-party mentor to help an individual stay on track can often make the difference between failure and success.

Despite the emerging economic recovery, many people still struggle financially. Metro Atlanta remains one of the country’s few urban centers with an unemployment rate over 7 percent. According to a recent Equifax report, credit card debt rose 1.3 percent to $10.6 billion in the third quarter of 2013. And despite an improving housing market, more than 51,000 foreclosure notices were filed in the 13-county metro Atlanta area last year.

A nonprofit credit counseling agency can be the financial lifeline to success. These organizations work with creditors to help individuals reduce the interest rates and monthly payments of their current obligations and to set up manageable debt repayment plans. For many people, this is a hopeful path out of crushing financial commitments, as it is not uncommon for individuals to be burdened with tens of thousands of dollars in unsecured debt.

It will be easier for Georgians to obtain help in 2014. Recently, Atlanta-based CredAbility merged with ClearPoint Credit Counseling Solutions of Richmond to form the second-largest nonprofit credit counseling agency in the nation. The new organization will take the ClearPoint name, but will continue to have its headquarters and a majority of its operations in Atlanta. Combined, our two agencies have helped consumers eliminate more than $1 billion in debt over the past five years.

In addition, ClearPoint will soon start a financial education service that will help moderate-income families make the leap to financial stability. Since many families cannot afford to hire a financial professional to help them save to buy a home, fund their child’s college education or put away money for retirement, ClearPoint will assist them. (Editor’s note: The price of the service has not been finalized, but it is supposed to be affordable for low- and moderate-income families.)

The new year, and our merger, provide an opportunity for new and different solutions to immediate and long-term financial challenges. With ClearPoint’s commitment to provide quality financial education services to our community, I affirm today that ClearPoint will remain on the forefront of the important mission of supporting consumer health through financial education. We thank our community partners for their commitment to share in this mission and our community’s future.

Chris Honenberger is chief executive officer of Atlanta-based ClearPoint Credit Counseling Solutions.

3 comments Add your comment

Chuck Shrader

January 8th, 2014
10:07 pm

It is really sad that all of these authors think that raising your credit score is measure of financial success. Teaching people to chase credit scores is setting them up for a life of financial mediocrity (at best). Instead they should be teaching them to stop borrowing money and use their income to build wealth.

John Hope Bryant

January 8th, 2014
12:44 pm

Thanks for your comment T. Sandin. Your comment was so powerful, I thought I should comment myself, as I am the author of the radical idea you reference.

To be clear, the bank account is not about government anything, at all. It’s about just the opposite actually. Giving every person a natural window into the mainstream free enterprise system, versus check cashers and payday lenders. But, not having even the government cutting down trees to print and send paper checks, is also a good thing, saving the environment and reducing the cost of government in the same breath. By the way — social security checks (think mainstream, retired workers) are also government transfer checks.

Question: You would not want all of these to come to every retired American electronically, and direct to say your parent’s bank account?

We must stop thinking government, or ‘government transfer,’ and automatically think ‘poor people on the dole.’ Respectfully submitted, and thanks for your passion for America.

T Sandin

January 8th, 2014
11:44 am

I am blown away by Mr. Bryant’s suggesion that new babies come with an electronic bank account and debit card which would “radically improve financial security, help the environment, create a direct government pipeline for federal, state and local benefit transfers, and single-handedly rock the nearly $500 billion alternative financial services industry back on its heels.” I can only hope that the opinion page author didn’t give much thought to his idea. Really who wants a child to grow up waiting for their government benefit transfers? How about raising children to be self sufficient?