(Kansas City, Mo. May 24, 2000) Mothers Against Drink Drivers changed the way people think about driving while intoxicated. Anti-smoking advocates caused a radical change in acceptance of smoking in restaurants and public places. A new Kansas City group called Make Cents now hopes to bring about the same kind of change in the way people think about spending and saving money.
One of the coalition’s founders, Kansas City Neighborhood Alliance Executive Director Colleen Hernandez, says changes in attitudes about smoking and drinking changed when the public became more aware, more informed, and more conscious of choices. She says Make Cents hopes to encourage the same type of public understanding of financial issues.
“ Our hope for Make Cents is to change the common acceptance of living beyond a family’s means and using credit very aggressively – into a norm which promotes delayed gratification, smart and conscious choices, demanding real value for the dollar.”
The group is working on two levels: offering free financial education to Kansas City families and individuals; and advocating sounder public policy that will help residents save money and become financially healthy.
Make Cents goals include:
—Encouraging smarter financial choices through Personal Financial Empowerment workshops.
—Improving understanding of why “fringe banking” institutions like pawn shops and check cashing outlets are proliferating in Kansas City.
—Ascertaining what impact the financial services available in the central city have on the health of Kansas City neighborhoods.
Encouraging financial institutions to open or expand affordable services in the urban core.
—Advocating for changes in laws and regulations that will improve the financial health of Kansas City individuals and neighborhoods.
What’s Good for the Family is Good for the Neighborhood
The three founding members of Make Cents, the Kansas City Neighborhood Alliance, Brush Creek Community Partners, and Mazuma Credit Union, found they had similar interests in promoting financial health of both Kansas City residents, and Kansas City neighborhoods.
Hernandez says the Neighborhood Alliance has offered homeowner-training classes for the past ten years. The trainers often found people in their 30’s who had been collecting a paycheck for ten years or so, but not saving or building a strong credit history. When these people were ready to buy a house, they often had to spend several years repairing their credit and saving money, before they could hope to qualify for a home loan.
Hernandez says those classes proved there is a need for broader public education on financial issues. She hopes Make Cents can help Kansas City residents understand the need to make smart choices before its too late. “Our hope for Make Cents is to have average people know the rules of the money game, understand the consequences of their decisions, and make smart long term financial decisions,” Hernandez says.
At the same time, Mazuma Credit Union CEO Nancy Pierce was trying to figure out how to help people she saw coming into her institution with no savings and no history of managing their money wisely. She says it is hard for any financial institution to loan money to people when they have already gotten into trouble. “If people only come in to the credit union when they’re in crisis, it's hard for us to help them. The solution is to bring people in before they get into a crisis, and help them set up a budget. The secret is for people to start saving money to head off crisis.”
The third founding partner, Brush Creek Community Partners, is a non-profit organization that encourages healthy neighborhoods in the Brush Creek area. Executive Director Carol Grimaldi says she was constantly hearing concern about the growing number of payday loan, check cashing and pawn shop operations in the corridor. Also, residents were complaining that few banks were located east of Troost, which lead people to depend on fringe banking services in the area.
“ The presence of check cashing/pay day loan businesses and pawn shops sends a message the neighborhood could be healthier. Also, the people who rely on these services to meet their financial needs are dramatically reducing their resources that they could be using to buy or improve a house, go to school or make any other kind of long-term investment. If people are saving and ultimately investing in their community, it makes for stronger neighborhoods,” Grimaldi says.
Make Cents works on several levels
Other major community groups have joined Make Cents. They include the Concerned Clergy Coalition of Kansas City and the Local Investment Commission.
Make Cents offers a series of Personal Financial Empowerment seminars which have been popular with Kansas City residents. The workshops encourage participants to save for important goals like buying a home or going to school. The workshops began last fall and continue through this summer. Hernandez says many people who attend have never learned how to ensure their own financial health.
“ People are not getting basic information from school or from their upbringing about how to live within their means, establish sound credit and save for a “rainy day,” the three behaviors that will serve them best in being financially self-sufficient.”
Hernandez and other members of Make Cents believe any family or individual can learn to make small changes that will improve their financial security.
Make Cents is bringing John Caskey, the author of “Fringe Banking: Check -Cashing Outlets, Pawnshops and the Poor,” to Kansas City in April on April 28. Caskey will speak to policy makers and community leaders about the rise of what he calls fringe banks, and how changes in public policy could help make savings more accessible to Kansas City residents.
If the coalition is successful, Grimaldi says the evidence will show up in Kansas City neighborhoods. She says the signs will include, “more savings and personal investment in Kansas City’s urban core. Increased home ownership in areas that have a high rate of rentals and absentee landlords. A greater presence of banks and credit unions in the areas that are currently underserved. A broad range of affordable financial services that allow Kansas City residents to get access to cash and save money without paying excessive fees.”