Teaching someone to fish
There’s a proverb that dates back to the 19th century. In various forms it says, “Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.” In a sense, one could apply that thinking to financial literacy. Giving a teenager money for lunch isn’t a bad thing but if you teach a teenager the basics of money management, they’ll eventually be able to buy you dinner. Give teens a foundation of financial savvy and they’ll be able to handle a marketplace rife with advertising aimed directly at them, as well as predatory lenders ready to indulge them. Teens can be taught to be responsible with credit and develop good saving habits. SCE Credit Union founded the Center for Financial Empowerment (CFE) in 2005. For 18 years the nonprofit 501(c) (3) has made financial literacy available to underserved students and communities. For nearly two decades, the CFE has been part of our Credit Union’s efforts to Create Good.
How we got here
A 2021 survey by Annuity.org tells us baby boomers are the most knowledgeable about financial basics. That demographic came of age at a time when financial literacy was included in required courses. Gen Z is at the back of the pack, which makes sense. They were born during a time when financial literacy instruction was dropped from high school curriculums across the country. In the 90s, many school districts and communities decided that delivering students to college doorsteps was the main goal. That inspired budget cutting. Courses not considered college prep, including instruction on financial matters, were victims of those cuts. Before the Great Recession in 2008, money seemed to be growing on trees, and many in the financial industry were blowing up a housing bubble. There was a surprisingly misguided notion that learning how to manage money wasn’t necessary because it was easy to just make more money. And then that bubble burst and our economy nearly collapsed. Gradually and suddenly, financial basics were back in vogue, but resources were still rare. In Southern California, and then in Southern Nevada, the CFE helped to fill the void.
Evolution of empowerment
In 2003, as the importance of teaching financial literacy first began to resurface, our Credit Union received a grant, organized a workshop, and got its feet wet in the waters of financial education. In what was considered a pioneering move for a credit union at the time, SCE Credit Union founded the nonprofit now known as the CFE, Current CFE Director Abby Ulm explains. “We actually started out as the Southern California Credit Union Foundation, changed our name to SCE FCU Foundation in 2008, and in 2013 we became the Center for Financial Empowerment.”
The CFE itself would evolve. Thirteen years ago, the nonprofit began to focus exclusively on disadvantaged high school age students. There are two main programs: a four-year program for high schools, which was piloted recently in partnership with an academy in Henderson and is ready to expand to other schools, and Mad City Money.
A simulating situation
Mad City Money is a two-hour simulation for ages 14 through 18. Participants get their own profile, assigned occupation, income and obligations. They make their way through vendor stations to make purchases, like housing, food and transportation. They pay taxes, pay for medical coverage and have family members to take care of. Adult volunteers play the vendor roles. It’s an incredibly effective way for kids to experience real life budgeting without real-life consequences.
Breaking the Cycle of Poverty
The CFE’s ambitious mission is to “break the cycle of generational poverty and create stable communities through youth financial education.” The need, especially in underserved communities, is crucial. Last year the CFE rebounded and brought its contribution to financial education back to pre-pandemic levels. This year is also going well, and the future is filled with opportunity.
Director Ulm points out the CFE not only provides the training needed but also put the tools in a student’s hands. “That’s because of SCE Credit Union. We teach students about the need to save, but then we help make Teen Checking and Youth Savings accounts available. SCE Credit Union products are trusted. That symbiotic relationship we have with SCE Credit Union is our superpower,” she says smiling.
At its core, the CFE is about foundation. It provides underserved teens with fundamentals they can build on. It adds to their confidence and, in a real sense, helps them reel in a better future.
To learn more, donate or volunteer go to center4fe.org