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Increasing Family Income and Wealth Family Goals

Jobs Are Not Enough Financial Counseling and Income Supports Help Families Turn the Corner 1/19/2012. Increasing Family Income and Wealth Family Goals. Sufficient family income Transferable job skills Manageable expenses Smart debt Post-secondary education plan

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Increasing Family Income and Wealth Family Goals

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  1. Jobs Are Not EnoughFinancial Counseling and Income Supports Help Families Turn the Corner1/19/2012

  2. Increasing Family Income and WealthFamily Goals • Sufficient family income • Transferable job skills • Manageable expenses • Smart debt • Post-secondary education plan • Real opportunity for retirement @ 65

  3. Expenses: $31,980 Finance charge: $1,809 Income from job: $19,006 Check cashing: $380 Child support: $2,436 $21,442 Payday loans: $596 $34,765 Many working families have negative net income Expenses exceed income by $13,321 Household scenario adapted from Aspen Institute report

  4. Financial Opportunity Center Overview • Employment Placement & Career Advancement • Soft-skills training • Job placement/advancement • Educational attainment • Financial counseling & coaching • Financial management workshops • One-on-one coaching & counseling • Better priced financial services • Income supports • Public benefits • Tax credits

  5. Goal: Balanced budget – or better Expenses: $26,463 Finance charges: $70 Income from job: $25,344 Check cashing: $60 Child support: $2,436 Payday loans: $85 Tax credits: $3,478 $26,678 $31,258 INCOME UP: Better pay and tax credits EXPENSES DOWN: Via utility assistance, child care subsidies, credit improvement

  6. Outcomes Net income All income- all expenses (monthly) Credit report/score improvement Net worth- positive changes Assets - Liabilities Employment placement & retention 3, 6, 12 & 24 month Career/wage advancement Debt reduction Budget implementation Receipt/bundling of 3 core services

  7. Abt Analysis • 40% of clients improved their credit score • Over past two years- the debt accumulated for living expenses went down and debt accumulated for asset expenses went up • “Bundlers” are 3 to 4x’s more likely to achieve a major economic outcome than non-bundlers

  8. LISC Chicago Preliminary Data • 72% recorded gains in net income • 43% show long-term job retention of at least six months • 42% show increases in credit scores • 43% increased net worth

  9. Three services better than one Number of clients with improvements in past 12 months 366 330 Net income 283 Credit score 161 177 Net worth 70 • Clients engaged on two or more services are: • 4 times more likely to improve credit • 14 times more likely to improve net income • 11 times more likely to improve net worth

  10. Findings • Positive net income matters most to long term client engagement • Positive monthly cash flow leads to job retention and work on personal finances • Employment programs (short-term) cannot raise income enough make cash flow positive • Credit scores matter to daily living expenses & improvements indicate financial behavior • Composite outcomes are more complex to track, but lead to improvements in program service delivery and client outcomes

  11. LISC Financial Opportunity Centers Duluth 1 center Toledo 2 centers Milwaukee 1 center Michigan Statewide 4 centers Twin Cities 5 centers Chicago 11 centers Detroit 7 centers Boston Rhode Island 4 centers Newark 1 center San Francisco Bay - 3 centers Philadelphia Cincinnati 4 centers San Diego 5 centers Indianapolis 6 centers Houston 6 centers

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