Based on data from the American Community Survey by the U.S. Census Bureau, in 2017 there were 77,154 households in the City of Tempe, and like any large city, these houses face the economic distress of generational poverty impacted by a cycle of financial illiteracy.
A 2017 a research report titled Escaping Poverty, Predictors of Persistently Poor Children’s Economic Success by the Urban institute, stated that more than one in 10 U.S. children grow up in persistently poor families— spending at least half their childhood living in poverty. In turn, these children are significantly less likely to succeed economically in their adult life than their non-poor and less-poor counterparts.
In an attempt to combat the perpetuation of these cycles, the city of Tempe is newly home to the Financial Opportunity Center, a Tempe Community Action Agency (TCAA) initiative developed in partnership with Local Initiative Support Corp. (LISC).
The center aims to help low- to moderate-income individuals develop effective money habits and strengthen their financial status with the help of coaches, according to the city of Tempe website.
Deborah Arteaga, executive director for TCAA, said the financial opportunity center model was developed by LISC, a concept she said is most effective in combating a cycle of poverty when financial coaching is paired with employment assistance and income support.
“We adopted that model and implemented that at our agency because a lot of our services are designed around emergency and basic needs, and we wanted to go beyond that and also help families become more economically stable to avoid a crisis in the future,” she said.
Atreaga said she quickly realized there was a large need for these services after the pilot phase of the program, which lasted Oct. – Nov. of 2018 before fully launching in 2019. She said that although they hope to continue to expand, the services are currently limited to those who have been receiving emergency services thus far, totaling 150 households.
“The first population that we’re focusing on are those that are already in need of emergency services to try to help them become more financially stable,” Arteaga said. “We hope to be able to expand that, As we work, there will be evolving openings in the program as other families are finishing the program.”
Jill Buschbacher, economic development program manager for the city of Tempe, said she feels the program elevates the city as a whole.
“we’re happy to have it in our community and feelings it’s a bonus that it’s available to our residents,” Buschbacher said.
Arteaga said that since the program’s implementation, she has seen many changes, and hopes the team of coaches reshape their approach as they come to learn more about each participant and their needs.
“I think that part of the strategy is very much an individualized approach,” she said. “One of the approaches that we take with that is helping people understand the role that money plays in their life. What values do they have about spending and saving? Is it homeownership for example, or is it sending kids to college, or saving for a car,” she said.
Arteaga said coaches start with setting personal goals, and then branch off to help participants understand every step in obtaining those personalized milestones as well as the role that managing money plays.
“I think that really makes it very personalized because it is client driven, it’s focusing on their goal, and helping them figure out how to how to meet those financial goals,” she said.
Domonic Braham, program manager for LISC, said the only drawback he noted during the pilot phase of the program was the coach’s inability to differ between case management and breaking away to understand the individual’s basic needs from a human perspective.
“It really is key … always going back to making sure that coaches can go through the lens of understanding the client, not just giving the answers, but listening to them and gaining a relationship before diving into budgeting and their goals,” Braham said.
Arteaga said the program has seen faces from all different backgrounds, and accommodating for a cultural disconnect can be an entirely different feat, especially for immigrant families.
According to the Lutheran Immigration and Refugee Service, while immigrants often arrive in the U.S. fluent in several languages and quickly learn to use English to survive, it takes more time and diligent study to acquire the advanced literacy skills needed for more complex written communication. Moreover, these basic skills usually emerge 12 to 18 months after arrival, but often require five years of regular English communication and practice to fully acquire more advanced literacy skills.
Braham said coaches must be open minded in understanding the different backgrounds that participants may come from and how that may affect the way they handle money.
“Financial freedom looks differently to anybody from other countries, no matter who you are; and so it’s the coach’s job to help guide that and understand if someone is from another country, what success looks like in their eyes,” Braham said. “Not everyone wants to find a job and work for a boss— they may want to have their own business. No matter what your goals are, no matter where you are, the coaches will be open minded.”
A study by the Lutheran Immigration and Refugee Service stated that 43 percent of Latino workers describe their personal knowledge of investing or saving for retirement as “knowing nothing” compared to 12 percent for all workers.
A lack of resources for these workers can trickle down to their child’s development and begin to create the barrier between their household, and one that places the value of budgeting at its core.
In order to break away from that socioeconomic disparity, the child must then receive outside education to supplement their grasp of finances, a resource that students often first encounter in college.
The City of Tempe is home to Arizona State University’s main campus, therefore representing a wide range of ethnicities and household incomes.
Amidst attempts to help students navigate university finances and break away from the cycle of generational poverty stands Earn to Learn, a collaborative effort between the Arizona Board of Regents, Arizona State University, Northern Arizona University, the University of Arizona and Pima Community College.
Michelle Rios, a success coach and enrollment specialist for Earn to Learn, said higher education is the first taste of financial independence for a lot of students, and can be especially tricky for immigrants or those with immigrant parents.
Rios said her parents are both Mexican immigrants, and that as the first to graduate college, she had to learn to navigate a new system on her own.
“I think a lot of a lot of immigrant and first-generation students strive to be self resilient and try to come up with come up with solutions on their own when that’s not always the case,” Rios said. “There’s resources for them and there’s people that are rooting for them to be successful.”
Maria Laughner, economic development program manager for the city of Tempe said she is excited to see the Financial Opportunity Center become a staple resource for its diverse population.
“I think that everyone should have the ability to get to become literate in financial awareness and I’m really happy that Tempe has the center right within our urban core now with one of our most trusted agencies which is TCA; I think it was a match made in heaven,” she said.
