General Treasurer Gina Raimondo spent her first year in office tackling retirement security for public sector employees. This year, her focus has shifted, and she’s ready to take on financial security for all Rhode Islanders.
“When I took office, I set as a priority, financial empowerment. It is enabling people to make smart financial choices so they can be financially secure,” Raimondo said. “In order to have a strong Rhode Island, every person needs to be financially secure.”
Empower RI is a financial literacy initiative that empowers individuals and families to get a handle on their personal finances. That empowerment is possible through the Financial Coaching Corps, an army of volunteers that Raimondo is building to provide free, confidential one-on-one financial counseling to people in every income bracket.
The goal, Raimondo says, is to educate consumers and stop them from making the bad financial choices or investments that can turn their lives upside down.
“If you take out a mortgage, which you can’t afford, you’re stuck in it for 20 or 30 years. This program will help them be smarter about their money,” she said.
Sixty-seven percent of Rhode Islanders say they have difficulty covering expenses and paying bills. Only 36 percent have emergency funds set aside and more than 30 percent have no retirement plans.
“They’re one health care bill or broken down care away from a real problem,” Raimondo said.
Empower RI was rolled out at a press conference Tuesday at the Buttonwoods Community Center in Warwick. Community action agencies across the state are joining in the efforts, promoting financial literacy to their clients. Joanne McGunagle, executive director of the Comprehensive Community Action Program (CCAP) in Cranston, said financial literacy is the “key to self-sufficiency.”
CCAP runs their GED and job-training programs out of the Buttonwoods center, and Raimondo is hopeful that young people will join the fray of those tapping into the Financial Coaching Corps. Already, the treasurer’s office offers Everfy, an online financial literacy program for high school students that launched more than one year ago. Everfy was in 19 schools last year, and is in more than 40 this year.
The program is free to schools, thanks to the sponsorship of banks and credit unions.
“I don’t want to recreate the wheel. I treat tax dollars like I treat my own money,” Raimondo said.
Empower RI is not solely for young people or low-income families already served by CAP agencies.
“This is an everybody issue,” Raimondo says. “If you are in poverty or if you’re living on the edge, which a lot of Rhode Islanders are, we’re there to help. Everybody could use a hand.”
In fact, Andy Posner, executive director and co-founder of Empower RI partner the Capital Good Fund, says that many of the people who are at-risk for bad investments are members of the middle class.
“The average income of a payday borrower is $50,000,” he said.
Volunteers come from financial backgrounds, and will be trained in counseling techniques through the Capital Good Fund, a Providence-based non-profit that has been offering financial literacy programs since 2009. Capital Good Fund has issued nearly a quarter million dollars in micro loans in that time, and has a detailed training program for financial literacy counselors. Their three-hour training curriculum covers credit, debt and personal budgeting. It takes roughly an hour and a half to cover the major financial issues, and then volunteers make a follow-up phone call two weeks later to ensure that individuals are making the changes discussed.
“It really holds people accountable,” Posner said.
Raimondo does not anticipate a problem in finding more finance professionals who are willing to help. Capital Good Fund hopes to have a coaching corps of 500-strong by the end of next year.
“Everywhere I go, people are asking, ‘How can I help?’ If we’re going to turn Rhode Island around, everyone has to do their part,” she said.
Raimondo is confident that a one-on-one approach is the most effective method of reaching Rhode Islanders. Coaches will meet individuals in their communities, where they feel comfortable, and all of the information shared will be confidential.
During a counseling session, individuals will bring all of their pertinent financial documents, from student loans and credit card bills to their checkbook and a personal budget. Counselors will provide advice and guidance that can get them on the right track. To date, Capital Good Fund has been able to save an average of $1,100 annually for the people they serve.
“Our goal is to have every client have six months of their expenses in savings,” Posner said, explaining that one unexpected bump, like a layoff, can set off a chain reaction that destroys an individual’s finances. “Literally millions fell into poverty from the middle class because of that. If they had had that buffer, that would not have happened.”
Another component to Empower RI is the employee benefit. Employers can provide more extensive financial counseling services for $300 per employee per year. Each employee receives more than 10 hours of counseling, with three to six in-person visits, and counselors can tailor the training to the company.
Groov-Pin, a Smithfield-based manufacturer, is piloting the employer-based benefit program, and has 20 employees ready to participate over the next year.
“As a company, our first impression was that this was wellness training for finance, and it could be an important employee benefit,” said Scot Jones, Groov-Pin CEO.
Two of his employees attended Tuesday’s press conference to share those benefits they have experienced.
“It has really made me rethink my own finances,” said Warwick resident Jean Lemieux, who learned how to read a credit report and better budget for her household.
Both Lemieux and her colleague Charlie Martin were skeptical to start, but thanked Raimondo and her team Tuesday for making Empower RI accessible. Martin also thanked Jones, and urged other employers to follow suit.
“I encourage other employers to do the same. An un-stressed, happy employee is a more productive employee,” he said.
Raimondo says these stories will multiply as more employers and Rhode Islanders take advantage of the Empower RI services.
“The research shows that employees are more productive if they’re not stressed out. It’s good for everyone to have Rhode Islanders and employees that are in financially sound circumstances,” she said. “Who couldn’t use a hand from a financial coach?”
To learn more about Empower RI, visit treasury.ri.gov/empower-ri. For more information on the Capital Good Fund, or to make a donation, visit www.capitalgoodfund.org. To sign up to become a Financial Coaching Corps member, call Kate Lyons at 866-584-3651 ext. 103 or visit www.fccorps.org.