No, I don’t mean Wall Street literature, although perhaps someday I should blog on that topic. I mean financial literacy, a phrase that always sounds a bit off-kilter to me, as if financial skills were something everyone would have if only they had paid a bit more attention in elementary school.
Until just a few days ago we thought we had our financial literacy plans all worked out. We would offer classes for 10-12 people at a time, perhaps 4 groups per year, in 6-week sessions. From the first group of low-income participants starting in late May, we would choose 5 of the most motivated to be our initial IDA account-holders and receive matched savings accounts. After completing the financial literacy course, those 5 would continue to meet once a month as a “savings club” to receive further training and encouragement while they saved for the purchase of a first home. Easy, right.
All of this seemed logical to us until we made a visit to Franklin County Community Action to chat with the person in charge of their asset development program. She has run their program since it launched about 4 years ago, and she was kind enough to impart some hard-earned wisdom. She strongly advised us to re-consider our plan for the financial literacy classes. She didn’t come right out and say, “You’re nuts,” but she might as well have. She was concerned that it would be very awkward to train IDA participants and non-IDA participants with the same curriculum. IDA participants are motivated to go through a full 6-week course because it’s part of joining the IDA program and therefore it’s the only way they can receive the matched savings. But with no such motivation for the non-IDA participants, she was skeptical that we’d have any luck keeping people in a class for 6 weeks. She felt that a separate class for non-IDA participants would be lovely, but would have to be structured much differently, perhaps meeting only 2 or 3 times instead of weekly for 6 weeks.
This same concern had occurred to us 6 months ago, but somehow we had managed to banish it from our minds as we drew closer to the launch of the program. Now we’re just a month from starting classes and the question of whether to run a class just for IDA participants or for a mixed group has come screeching back into view. Running a class for only 5 IDA particpants seems like a less than ideal use of resources. And what if 1 or 2 drop out after we’re several weeks into the class. Then we won’t have our 5 IDA accounts.
We haven’t settled on an answer yet. Tune in next week to learn how our heroes extricate themselves from this thorny dilemma.