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Budget lessons target youth
Ryan Chandler, 20, of Collinsville, and Demarquis Gilbert, 20, of Martinsville, recently graduated from the Youth Money Management Mentoring Program started by United Way to help 18- to 22-year-olds learn how to become more financially stable. Shown above are Chandler (from left); Joanie Davis, community initiatives director with the United Way of Henry County and Martinsville; Felisa King, youth case manager with the Workforce Development Center; Gilbert; and Kara Koger, insurance clerk at Martinsville Dupont Credit Union and mentor for the program. (Bulletin photo by Ashley Jackson)
Thursday, July 19, 2012
By ASHLEY JACKSON - Bulletin Staff Writer
The 20- to 29-year-old age group is the most financially illiterate, according to research conducted by the National Endowment for Financial Education (NEFE), said Joanie Davis, community initiatives director with the United Way of Henry County and Martinsville.
Armed with that research, the United Way began a program this year called the Youth Money Management Mentoring Program. It is designed to help 18- to 22-year-olds learn how to become more financially stable and to instill good financial habits so that the young adults can be better prepared for the future, Davis said.
The younger a person can start saving money, “the better they’re going to be,” she said.
According to a PNC financial independence survey, the average credit card debt for those aged 20-29 is $1,800; the unemployment rate for those 18-29 is 12.4 percent (BLS data); and 60 percent of 18- to 34 year-olds are not keeping a budget (NFCC financial literacy survey).
Recently, Ryan Chandler, 20, of Collinsville, and Demarquis Gilbert, 20, of Martinsville, graduated from the program and opened savings accounts at the Martinsville Dupont Credit Union.
The program was a partnership between the United Way of Henry County and Martinsville’s HOPE (Helping Others Progress Economically) initiative and financial capability coalition; the Workforce Development Center; Pittsylvania County Community Action; and Martinsville Dupont Credit Union, according to Davis.
There were a total of six participants in the program this spring, but only two completed it, according to Davis. In the winter, five youths graduated from the program, Davis added.
Davis said that the partners are trying to attract more youth to participate in the program.
During the five sessions of the program facilitated by United Way, the participants developed personal budgets and savings plans, saved all extra money to put into the savings accounts, established short- and long-term goals for money management, understood banking concepts and learned of resources available in the community to assist them with their personal finances, according to Davis.
Through the Workforce Development Center, the young men had occupational skills training, took money management courses and attended leadership workshops on career opportunities and life skills, said Felisa King, youth case manager with the Workforce Development Center.
Even after the completion of the program, the work force development center allows the participants to continue taking the workshops to help build on their careers, King said. “We push them to be successful,” she added.
King will continually work with companies to help the young men find jobs, she said. The program also offered paid internships. After an internship at Nelson Ford, Chandler received a job, she added.
Before the program, Chandler did not know how to fill out a job application or résumé correctly or how to present himself professionally, he said.
The program was beneficial to Chandler because he has a child he has to provide for, so he must budget his money accordingly to be able to afford to buy food and diapers, he said.
By making a budget, he can see where every dollar is going, which allows him to prioritize what he buys and keep himself from overdrawing as well, he added.
A major aspect of the program was getting the participants to think about their attitudes, because once they have a positive attitude, they are inspired to better themselves, Davis said.
Chandler said that he now knows not to settle for less and to instead “strive for the best ... and don’t let obstacles stop you.”
Gilbert realized how much stress affects how a person spends money. “The more you stress, the more you spend,” he said.
Stress management also was part of the lessons included in the program, Davis said.
Having completed the program, Gilbert feels more prepared for the future and more knowledgeable about finances, he said.
Until the program, Gilbert didn’t realize how many ways a person can save money. A person can either open a savings account, invest or put money into a certificate of deposit (CD), he said.
Gilbert is still seeking employment, but once he does receive a job, he now knows the importance of putting half of one’s paycheck in savings and using the other half for bills, he said.
Before, Gilbert’s mindset was that one had to spend money to get by; now he sees that “you have to save money to get by, not spend it,” Gilbert said, adding that he now thinks about his future finances instead of the present finances.
By working with a younger age group, it was important to have the positive influences from the mentors with the program who tapped into the participants’ motivations, Davis said.
During the sessions, the participants had to write down their expenses each week to be conscious of what they are spending; and each week, the mentors followed up with them to see how much they had saved, Davis said.
At the end of the program, Chandler had saved about $45 and Gilbert saved about $35; the program matched those amounts so that the participants were able to put even more into their savings accounts, Davis said, adding that the men also were given a $50 incentive to join the program.
Due to the partnership with the program, the Martinsville Dupont Credit Union waived the $5 membership fee to open a savings account, Davis said.
“Financial education is an imperative issue facing youth .... Martinsville Dupont Credit Union is very proud to support the financial education that the United Way provides for youth,” said Andrew Reynolds, MDCU investment officer.
“We hope to see more youth like them (the participants) take the initiative to improve their financial education and understanding of important issues,” Reynolds added.
The program was funded by the Workforce Development Center at a cost of $5,500, according to Davis.
The United Way received a grant in the amount of $179,846 from the Harvest Foundation in 2010 to form the financial capability coalition and train mentors to provide 100 families with financial education per year, Davis said.
While the three-year grant from the Harvest Foundation didn’t fund the youth program, the program was designed to strengthen the efforts of the financial capability coalition and be an extension of the financial courses that the United Way has already been providing to the public, she added.