Delaware Offers Free Financial Advice

In the wake of the 2008 global recession, this statewide empowerment program is teaching financial wellness one person at a time.

National Journal
Lucia Graves
Add to Briefcase
Lucia Graves
Jan. 23, 2014, 6:25 a.m.

Renita Patrick lives with her grown son and daugh­ter and four grandkids in a house in Wilm­ing­ton, Del. She emig­rated from Ja­maica 12 years ago, and for the last five years, she’s been work­ing at a nearby child-care learn­ing cen­ter, send­ing money back to her fam­ily and try­ing to help her grand­daugh­ter with minor school ex­penses.

Patrick is now in her 60s. Be­fore she found fin­an­cial well­ness coach Shay Frisby through the learn­ing cen­ter, she had no sav­ings. As much as she wanted to help her fam­ily fin­an­cially, Patrick real­ized she had to take care of her­self too, es­pe­cially as she got older. “I was do­ing people all around and I wasn’t do­ing me,” Patrick said of her fin­an­cial situ­ation.

Now that’s chan­ging. For the past six months, she’s been work­ing with Frisby to pay off her cred­it-card bills, con­sol­id­ate her debt, im­prove her cred­it score, and open a sav­ings ac­count with $100 at the Sun East Fed­er­al Cred­it Uni­on in Wilm­ing­ton. “I don’t have a lot of money in there, but it’s a start,” she said. “It made me feel so much bet­ter about my­self.”

If any­thing good has come from the fin­an­cial crisis, it’s that people are start­ing to wake up to the im­port­ance of help­ing people man­age their per­son­al fin­ances both at the na­tion­al level, with the form­a­tion of the Con­sumer Fin­an­cial Pro­tec­tion Bur­eau, and at the state level, with pro­grams like Stand By Me, a fin­an­cial em­power­ment pro­gram star­ted by Delaware Gov. Jack Mar­kell.

“There’s a lot of con­ver­sa­tion about eco­nom­ic mo­bil­ity and the like, and if we can provide some con­ver­sa­tion that em­powers people to take re­spons­ib­il­ity for their fin­an­cial lives and gives them the con­fid­ence they need to do that, I think that’s very power­ful,” Mar­kell said in an in­ter­view with Na­tion­al Journ­al.

The pro­gram, a joint ven­ture of the state of Delaware and the United Way of Delaware, lever­ages a small staff of just 18 full-time coaches to provide free per­son­al-fin­ance coun­sel­ing to more than 3,000 Delawareans. Al­though there are no in­come guidelines, the ma­jor­ity of par­ti­cipants are low- to mod­er­ate-in­come. Fifty-two per­cent of them are Afric­an-Amer­ic­an, and a sur­pris­ingly high num­ber of them — 72 per­cent — are wo­men. Fund­ing for the pro­gram, which costs about $1.3 mil­lion an­nu­ally, comes largely from the private sec­tor. Cor­por­a­tions and found­a­tions cov­er about 75 per­cent of the amount, while 25 per­cent comes from pub­lic sources, both state and fed­er­al.

Mary Dupont, the dir­ect­or of fin­an­cial em­power­ment for the De­part­ment of Health and So­cial Ser­vices, stresses the im­port­ance of hav­ing the state gov­ern­ment’s sup­port. “The most amaz­ing thing to me,” said Dupont, “is be­fore com­ing in­to gov­ern­ment I did work in the non­profit sec­tor, and this is not a job that the non­profit sec­tor can do alone. We have to have state gov­ern­ment in­volved in or­der to get real muscle be­hind this work.”

Part­ner­ing with state em­ploy­ers, non­profits, com­munity col­leges, high schools, and faith-based com­munit­ies, as well as child-care pro­viders around the state, the pro­gram of­fers per­son­al fin­an­cial coach­ing. What’s offered de­pends on the needs of the in­sti­tu­tion: With busi­nesses, the pro­gram is offered as an em­ploy­ee be­ne­fit. At com­munity col­leges, it is offered as a re­source to stu­dents and their fam­il­ies as well as to the staff. At high schools, it is offered as part of col­lege-ac­cess pro­grams. Areas that the pro­gram teaches in­clude budget plan­ning, debt man­age­ment, and help­ing people nav­ig­ate the fin­an­cial sys­tem with re­gard to ap­ply­ing to col­lege and pay­ing for it. The ap­proach is highly per­son­al.

That per­son­al touch is key, says Lauren Ly­ons Cole, a cer­ti­fied fin­an­cial plan­ner who has no af­fil­i­ation with the pro­gram. “Read­ing books or art­icles can be help­ful, but noth­ing beats get­ting per­son­al­ized ad­vice from someone who knows the de­tails of your spe­cif­ic situ­ation,” she says. “Hav­ing ex­pert guid­ance in cre­at­ing a plan can help re­lieve stress and put people on track to reach­ing their goals.”

The be­ne­fits go well bey­ond mon­et­ary con­cerns. Take, for in­stance, the dif­fi­culty of nav­ig­at­ing post­sec­ond­ary in­sti­tu­tions. “Those with a col­lege de­gree are ul­ti­mately go­ing to be able to get more,” Dupont says, “but get­ting it, ap­ply­ing for it, pay­ing for it, and get­ting fin­an­cial aid and stu­dent loan debt is com­plic­ated.”

Nav­ig­at­ing a com­plex fin­an­cial sys­tem comes with real costs. Stud­ies have shown that the stress of poverty im­pairs over­all cog­nit­ive func­tion­ing and hurts people’s abil­ity to do oth­er tasks. A full 53 per­cent of Stand By Me par­ti­cipants say they have little to no con­trol over their fin­ances, and 57 per­cent re­port be­ing ex­tremely to some­what wor­ried about their fin­ances. For them, fin­an­cial coach­ing means the op­por­tun­ity to go fur­ther in life.

Such find­ings are par­tic­u­larly mean­ing­ful giv­en in­equal­it­ies that ex­ist across race and class. The me­di­an na­tion­al in­come for whites is $57,000 a year, and in Delaware it’s $62,000. For Afric­an-Amer­ic­ans that num­ber drops to $33,000 per year, or $42,000 in Delaware; for His­pan­ics it’s $39,000, and $35,000 in the state. Ig­nor­ing the ef­fects of poverty on per­form­ance re­in­forces these dis­par­it­ies.

That Delaware is a small state makes co­ordin­a­tion of the pro­gram that much easi­er. Stand By Me has been able to con­tract with non­profits in every county, for in­stance, but there are only three counties to co­ordin­ate with. Im­ple­ment­a­tion in Cali­for­nia would be a bit more in­volved.

Stand By Me has re­cently com­pleted an 18-month pro­gram eval­u­ation, and the Na­tion­al Gov­ernors As­so­ci­ation is draft­ing a case study of the pro­gram to be dis­trib­uted to oth­er states. But for the most part, Dupont is keep­ing her fo­cus in state and in help­ing people like Patrick save and spend their money wisely.

What We're Following See More »
Republican Polling Shows Close Race
Roundup: National Polling Remains Inconsistent
8 hours ago

The national polls, once again, tell very different stories: Clinton leads by just one point in the IBD, Rasmussen, and LA Times tracking polls, while she shows a commanding 12 point lead in the ABC news poll and a smaller but sizable five point lead in the CNN poll. The Republican Remington Research Group released a slew of polls showing Trump up in Ohio, Nevada, and North Carolina, a tie in Florida, and Clinton leads in Pennsylvania, Wisconsin, and Virginia. However, an independent Siena poll shows Clinton up 7 in North Carolina, while a Monmouth poll shows Trump up one in Arizona

Colin Powell to Vote for Clinton
11 hours ago
Clinton Reaching Out to GOP Senators
16 hours ago

If you need a marker for how confident Hillary Clinton is at this point of the race, here's one: CNN's Jeff Zeleny reports "she's been talking to Republican senators, old allies and new, saying that she is willing to work with them and govern."

Trump Admits He’s Behind
16 hours ago
Ron Klain in Line to Be Clinton’s Chief of Staff?
16 hours ago

Sources tell CNN that longtime Democratic operative Ron Klain, who has been Vice President Biden's chief of staff, is "high on the list of prospects" to be chief of staff in a Clinton White House. "John Podesta, the campaign chairman, has signaled his interest in joining the Cabinet, perhaps as Energy secretary."


Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.