Youth Perspectives on
Their Financial Lives and Saving
in Opportunity PassportTM Accounts
Clark Peters, PhD, University of Missouri
Margaret Sherraden, PhD, University of
Missouri – St. Louis
Ann Marie Kuchinski, MA, Research Assistant,
University of Missouri
1
Key goals of the project
» Gain insight into the financial lives of youths
transitioning out of foster care into adulthood
» Understand youths’ experience in the Opportunity
PassportTM program from their own perspectives
2
Outline of the presentation
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Existing research
Project protocol
Sample selection and demographics
Findings
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Financial services
Financial management
Factors that affect savings
Unmatched withdrawals
Program effects
3
Insights from existing research on transition
from foster care to adulthood
» Having few financial resources, former foster
youths likely to face difficulty transitioning to
financial independence
» They tend to rely increasingly on biological family
connections
» Tenuous and troubled nature of adult support is
likely to compound financial difficulties
4
Questions emerging from a review of the
relevant literature
» What are the financial experiences young adults
exiting foster care?
» What are the roles that kin and other influential
adults play in the financial lives of these young
people?
5
Project protocol
» Reviewed literature
»Interviews in four sites
Pilot: January 2011
Three sites: April – May 2011
» Developed instrument
» Analyzed program data
» Transcribed and analyzed
interviews
» Worked with sites to
prepare for visits,
identified respondents
» Receive feedback on key
findings
» Final report
6
Respondent sample
» Staff: 8 interviews
» Participants: 38 interviews
» Participant demographics
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Average age 21.3 years old (18 – 23 years old)
Mostly female (79%)
Black (47%), White (37%), Multiracial (16%)
27 (71%) had 3 or fewer foster care placements
11 (29%) are married or living with partner
» Participants: A diverse group, developmentally and in
terms of life experiences
7
Findings: Financial services
» Checking and savings accounts at mainstream institutions
(Bank/CU accounts, checking, debit, ATM, online)
» Check cashing and money orders at alternative financial
institutions (CCOs, retail grocery stores)
» Prepaid card services (e.g., Green Dot)
» Credit: Credit cards, RALs, payday lenders, pawnshops
» Cash
» Tax services: commercial (e.g., H&R Block) and non-profit
(VITA sites)
» Rent-to-own
8
Findings: Financial management
» Using of simple rules of thumb for paying bills
» Seeking efficiency
» Set aside small amounts to cover unanticipated
expenses
» Identifying strategies for shortfalls
› Asking for an payment extensions, getting emergency
grants, moving in with a relative
» Most are worried about accumulating debt
» Troublesome high cost expenses
› Mobile phone, transportation, and medical emergencies
9
Findings: Individual factors that affect saving
» Income (e.g., job, state stipends)
» Availability of tax refund or credit
» Low expenses (efficiency, sharing expenses)
» Access to transportation
» Willingness to remain engaged with CW services
» Self control and “ignoring” savings
» Triggers to save
» Role models and partners
» Level of trust in financial institutions
10
Findings: Program features that affect saving
» Guidance and encouragement by staff
» Financial education
» Savings match
» Opportunity PassportTM participation stipends
» Savings target as goal
» Saving strategies
» “Whenever possible”
» “Ignore it”
» Automatic/direct deposit
» Lump sum deposits
» Restrictions on withdrawals
11
Findings: Unmatched withdrawals
» Some youth are resentful that they cannot readily
withdraw their own savings
» Some youth understand the reason for rules
discouraging unmatched withdrawals
» For some youth, restrictions act to inhibit deposits
» The unintended consequence of restricting access to
personal savings
12
Conclusions: Opportunity PassportTM program
operations
» More rules may confuse rather than encourage
savings
» Simplicity and appeal of 1:1 match seems to be a
key feature
» Efforts to instill a “savings habit” may not work
» “Door openers” reach few
» Financial emergencies create a challenge for
participants and the program
13
Findings: Opportunity PassportTM program effects
» Matched Opportunity PassportTM savings withdrawals
» Introduction to traditional financial services
» Financial counseling and planning
» Chance to learn from experience
» Peer and adult support
» Enhanced educational opportunities
» Intergenerational effects
14
Conclusion: Financial services
» Barriers to using traditional financial institutions
leads many to other means of savings and
financial tools
» Not all alternative financial services are alike:
participants use some that are sensible (e.g.,
inexpensive check cashing) as well as some that
are ill-advised (e.g., rent-to-own)
» Checking accounts of limited use
15
Conclusion: Overall outcomes
» Youth seem to have a greater connection to mainstream
financial services, but are also enmeshed in alternative
services (e.g., money orders, check cashing).
» Youth have gained financial management skills, but it’s
difficult to disentangle program effects from maturation.
» As youth emerge from foster care services, Opportunity
PassportTM may be viewed as simply another opportunity to
obtain resources; they may not associate Opportunity
PassportTM as a bridge to a distinct phase of life.
» Some youth credit the program with being a critical
component of their effort to successfully transition to
adulthood.
16
Implications for program and practice
» Is there a way to integrate support from peers and kin in
encouraging good financial management and saving?
» How can the developmental stage of participants be
identified and matched to Opportunity PassportTM
possibilities?
» Are there ways to explore how to encourage more savings at
tax refund/credit “windfalls”?
» How to balance the paternalism of limited account access
with the need to address the often dire needs of young
adults?
» How to optimize the array of financial products for each
participant?
17
Future research
» Experimental research to sort out independent
contributions on saving performance of financial
education, match, targets, program support, and
other program components. . .
» . . . and to disentangle development of financial
management skills from “natural” maturation.
» In-depth research to better understand use of
financial services and the role of triggers to save.
18
Youth Perspectives on
Their Financial Lives and Saving
in Opportunity PassportTM Accounts
THANK YOU
19
Findings: Financial management
20
Using rules of thumb
Participants projecting their regular income sources
and allocating them first to necessities, such as paying
rent and food, and then allocating surplus to other
expenses.
“So I do my bills first. Whatever I have left I shop with. I make
sure my money lasts me until I get another check, so I can
budget out for like the whole two weeks. I get paid every two
weeks. I do it like that.” (Shondra, 19)
“The only person that get their money on the first is the
rent.” (Monica, 22)
21
Seeking efficiency
Participants share costs with someone else, use budget
payment plans, bundle communications expenses,
avoid using a car, buy at discount stores, eat at home,
and avoid frivolous expenses.
“Yeah, we [roommates] share pretty much everything, the
costs for everything, all the way down to, if we buy a $5.00
movie, we split it half and half.” (Rachel, 21)
“It’s easy to get caught up in spending when you get excited
about something, especially my daughter like at birthday
time and stuff like that.” (April, 21)
22
Seeking efficiency, continued
Efficiency includes evaluating the necessity of a purchase.
“Before I make a financial decision, I debate on what else I
could have used the money for and what like might be more
important. So if this might be like something that's real
frivolous that I could just live without, go like months and
months without, then I won't spend my money towards like
deciding I need something within two days or I need it now. I’d
rather pay for something that I may need or will need instead
of paying for something that's frivolous that I’m going to forgot
about.” (Kiara, 20)
23
Worry about accumulating too much debt
Of recurring concern are medical and educational debt.
“I mean. . . just the word debt scares the crap out of me. You
know what I mean? . . . . The whole world is in debt. . . [I pay]
bills first and not be so much in debt that we can’t handle it.
I’m telling you, debt is my number one motivation. No debt.”
(Nicole, 22)
24
Findings: Financial services
25
Using a variety of financial tools
“We use money order only for rent, I write checks from our bank
account for like electric and water and all that and I use cash or
a debit card for the car. Well, the car is cash. But for like the
Rent-A-Center stuff, either cash or card.” (Rebecca, 20)
26
Pawn shop
“Well, you know, it was when I was in [nearby city], when I had
no money. You know, I was trying to find a job and everything. I
wasn't really getting lucky, so pawned off some of my games for
my PS3 and my movies, all that good stuff, you know, made
some money.” (Mike, 19)
27
Relying on cash
“Yeah, I had a, what are those little lock boxes, I would keep it in
there in an envelope.” (Hannah, 21)
“I got bank accounts, but there’s no money on bank accounts.
I’ve been saving – I – it’s a little – I just started saving so I put it
in my little shoebox in my apartment.” (Tiffany, 20)
“[I store my money] somewhere like up in my room or
something like that. So let’s say maybe I’ll fold up – let’s see – a
$100 bill and then a 50 and then a couple 20s, and then fold that
up, and then that’s one bill.” (Daniel, 23)
28
Rent-to-own
“And then that income when I, it still ain’t going [to savings], it
going on the rent and the lights and the furniture rentals I got. Still
ain’t goin nowhere . . And then the furniture that I rent is a seven
piece plus the two screens and all that stuff that’s like give me a
total of four hundred and something so it’s really not really going
no where that’s just the check amount every month and the SSI.
(Kyle, 18)
I did that once. And I’ll never do it again, either . . . I got my coffee
table, my end tables. And oh my gosh . . . And over expensive.
Overly charge ya. It’s supposed to be a $300.00 set. I think we paid
like 600 for it. . . . That was when I was in the trailer. Young
thing again. Never happen again. [Laughter] (Darla, 23)
29
Findings: Individual factors that affect saving
30
Regular income for saving: Jobs and state
stipends
“We put money in. We put a lot of money in. . . . I think it was
like $100 a week when we were both working. [But now without
jobs,] We can't really [save], at this point. We're basically living
paycheck-to-paycheck.” (Taylor, 20)
“. . . If every time you get some money, you gotta do all this stuff
with it. By the time I get the money and spend it, you know, they
don't be nothing left for me to put nothing in my account.”
(Yolanda, 22)
“As long as you were working and going to school, you got [the
state stipend of over $500] a month. At that time, that was just
coming to me and I was working on top of it.” (Amber, 22)
31
Tax returns for saving
“I usually, when I get paid, I usually cash my checks and it
turns around and goes right to a bill. So I mean, when I get
my taxes, that’s usually when I can save up a little more….
A little bit of a head start. Just a little bit.” (Darla, 23)
32
Transportation costs hinder saving
For some participants with student passes, public
transportation is low-cost or free, but for most,
travel is a considerable expense.
“[I prefer] doing online classes because getting there is
too difficult, and bus passes are outrageous.”(Allison, 20)
“I was missing [classes] too many days because I couldn’t
make it back and forth. . . I did have my own car at that
time, but I didn’t have the money for the gas and then
my car kept messing up.” (Hannah, 21)
33
Willingness to remain engaged with child
welfare services that help with saving
“Kind of being in and out of different homes and then the
last year being at this last one. It's not anything personal
toward anybody. It's just that I wasn't able to be a
teenager. I wasn't able to go out and hang with my
friends like I would be if you were with your parents
normally. . . I remember a couple of times that it was
almost like a déjà vu feeling but kind of like anxiety. I kind
of felt like, ‘Oh my gosh, I'm still here.’ I felt like I was in
prison, and I'd have these like, ‘This isn't my house, and
I'm still here.’” (Amy, 23)
34
Self control affects ability to find money to
save
“It’s just about control. Like you’ve got to think about the
stuff that you want, and the stuff that you need to get. . . .
I’m doing better now. Way better since I’m so much tighter
now. . . . So you’ve got to think about, have self-control over
yourself with your money. That’s all. If you can’t control it,
ain’t nobody else going to help you control it. They’re going
to help you spend it. So you’ve got to keep an eye on it.”
(Kiara, 20)
35
Self control through “ignoring” savings
“What makes it easier is if you just think about if you put this
money up and hold on to it and I add some more to it then be
like it can accumulate over time, it can accumulate to a nice
amount and you won't even – you not gone even lose any
sleep over the money. It's just building up and then when you
want to use it, it can be useful for that something that’s
worth it.” (Thomas, 21)
“I don’t even touch it . . . I like to keep it on the back burner . .
. . That’s how I do it. I’m like, ‘You do not have no money. You
are so broke. You have just the change at the bottom of your
purse’ . . . . I try to just forget all about it. Put it in the back
there and don’t even remember.” (Darla, 23)
36
Self control, continued
Single mothers seem to have a heightened sense of
importance of saving, but less means to do so.
It’s difficult not to spend:
“What makes it hard is like you just see something that
think you’ve got to have it and you just want or those
cravings.” (Thomas, 21)
37
Triggers to save help
“When I get my school check, that’s pretty much my
reminder [to make a savings deposit].” (Beth, 22)
38
Role models and partners can also remind
“Save money, save money, save money. That’s all he [partner]
does. He doesn’t spend anything, ever. Which is okay, cause at
least somebody can save in this relationship. [Laughter] I don’t
have the money to save. And I’m like, ‘Good. You save, so I can
spend your money.’ [Laughter] He’s pretty good about it. And my
grandparents, my dad’s parents, they’re very good about saving.
‘Did you get paid today? Well, you should probably put money in
the bank and put it in your account where you can’t touch it.’ My
grandma.” (Darla, 23)
39
Role models and partners, continued
“I figured it out on my own, with the help of my girlfriend
yelling at me. [Laughter] So, yeah, I just came to the
conclusion, like, yeah, so if someone says, “Hey, let’s go club
here,” I’m like, “Oh, okay. No, I’m fine. I’m going to save my
money.” (Christopher, 21)
And my grandmother helps, too. I give her something. Like if I
think it’s going to burn a hole in my pocket or I have a
tempting moment, I give it to my grandmother, and just tell
her to put it up for me, and don’t give it to me. And she won’t.
(Kiara, 20)
40
Role models and partners, more
Not all partners are positive influences, however:
“[My mother] thinks that I owe her something for choosing
to stay in care. And I do understand like yeah, it cost
money, but I’m not the reason we were placed in the care
in the first place, so and I mean, I’ve said that before and
so it just causes fight, so I don’t say it anymore, she knows
how I feel . . . She doesn’t let me forget it either, so I just-,
part of the reason I had to move out.” (Megan, 22)
41
Findings: Program features that affect saving
42
Staff guidance, education & encouragement
help youth to save
“Sometimes I had to be reminded by my DHS worker or –– or
my caseworkers at the time.” (Amber, 22)
“So they taught me to think twice about getting your money
[out]. Taught me a lot of stuff that helped me mature . . . they
really taught just to like always think fully. Don't make just a
slight decision, like, ‘Ooh, I want this,’ and just go. You’ve got
to think like double – think some things. You can't just be stuck
and go and all the time. Sometimes you’ve got to stop at the
red light and sometimes you’ve got to look both ways.”
(Christopher, 21)
43
Staff guidance, education & encouragement,
continued
“Staff, they help us decide our budgets and stuff about how
much we want us to put in there.” (Louise, 23)
Staff advice:
“. . . A worker had told me before, she was like “I used to save
. . . $10 a week” from when she was a certain age up to a
certain age. And I did the math with that and I was like
“Wow!” I’m like if I could do that – by the time I’m 30, I have
this much! So I try to look at it like that. Just putting a few
pennies away a day or whatever . . . it helps.” (Jasmine, 23)
44
Financial education also helps savings
“And we learned – like we went through this whole book of
everything from like credit cards to, you know, saving money and
just everything about it. So –Yeah, I remember it. I do. I think
still even have the book [Laughter]. But – so it was – after like
living, growing up in a family that didn’t pay attention to that or
didn’t pay their bills or didn’t have good credit, you know, now I
know what credit is. I didn’t then, but [laughter] – it was –
I liked the class. It was very interesting to me because I knew I
had to do it different, you know. . . So I really did learn a lot in
that class, and I took a lot of it with me.” (Nicole, 22)
45
Savings match is important
“I’m always thinking ‘double my money.’” (Jessica, 20)
“. . . If I put fifty in, they gonna put fifty in, that’s automatically
gonna be a hundred right there. So I keep doing it, it’s gonna
grow, grow. Go up a hundred every time I put fifty in. That’s why
I put fifty in.” (Justin, 18)
“I guess it really surprised me for like to put $1,000 in, they
matched $1,000, up to $1,000. It was just like – is this really for
real?” (Amber, 22)
46
Savings match, continued
“And they match whatever you put in your account, and that’s
huge, and that’s only for the big stuff, like the car and stuff. If
you just put money in there, they don’t match that, but if you’re
matching towards something, then that’s when they put the
money in there.” (Allison, 20)
“So we little bit closer to that car. You know when we was doing
it by ourself we probably goin’ two three four years, you know,
trying to get to the point where we can just put money in there
and they’ll match it and then they’re helping us out. . . .You
know so it’s a BIG help. It’s a big step.” (Kyle, 18)
47
Opportunity PassportTM participation stipends are a
regular source of savings
“I took my surveys – which they put $20 in my account every
time I take a survey. So that kind of built my little savings up a
little bit, and then . . . I started putting money in there myself.”
(Jessica, 22)
“Like when I do the surveys, I just leave the money and then let
it sit. Let me forget all about it. Let it come back to me a couple
of years later, and have built interest. And I’m like, ‘Okay. Cool.’
They put the money into the IDA. And I just don’t touch it. . . . I
let that stack ‘cause they’re giving it. They’re putting money in
my account every month, so I just let that money stay up.”
(Monica, 22)
48
Savings goals help focus on saving
“We have savings goals. We had paperwork. We had one of
these surveys that it was on paper, and they were saying like,
‘Three years from now, what would you do with your money?’
…I don’t know what I said because that was so long ago, I
probably had said like… ‘I'm gone get a house or I'm gone get a
car,’ but now if they were to say …like, ‘Three years from now,
how would you feel like you want your life to be?’, I would say,
‘Personally, I want to be in a mansion. I want to be with two nice
jobs that’s paying $14 an hour’ . . . because I'm by myself, I don’t
have no kids …So I feel that I should have more but I have to
keep my mind – I have to keep focus so I can get there. So, that’s
how, yeah.” (Karen, 21)
49
Savings goal, continued
“I need to find like a goal on what I wanna get, and then
once I get that goal in my head to where I wanna get,
then I’ll start saving more.” (Jessica, 22)
Often youth have several goals:
“I saved up for that and then used my IDA matching . . . .
to put a down payment on a car . . . . And then also, it
helped with my first like installment of insurance, which
was cool. I also saved up for a computer in the past.
Things like that.” (Megan, 22)
50
Savings target
Some set high aspirational goals, others low goals
that they viewed as achievable.
“So whenever I actually saved my 1000, I put it in the
bank and let it sit for like 3 months and then I was like,
‘Okay now I want my match.’ Then I realized, ‘Okay I can’t
get my match for anything that I want, so it’s like okay,
what do I need? And then I looked at all the categories
and I see all the things that I could get matched for.”
(Jessica, 20)
51
Program contributions/emergency grants
“I don’t know if it’s odd or God or whatever or people helping
out, but like that twenty bucks [for taking the survey] is gonna
get me ‘til Friday.” (Trent, 23)
52
Restrictions on withdrawals
“Yes. I like that. I need that discipline. I think that’s another thing
that I like about it is the discipline that you’re putting that
money there for that reason, you know. Leave it there. And they
kind of make you.” (Nicole, 22)
“So, the [Opportunity PassportTM] money, I can't touch it which is
good. It's like a savings bond.” (Louise, 23)
53
Findings: Unmatched withdrawals
54
For some, restrictions act to inhibit deposits
“I always hold onto [my money] until I’m ready to make a
match and I deposit it in there because I feel like what if
something happens and I need that money and I can’t get in
contact with them? Then what am I gonna do because? You
know, so I leave it – and wait and then I will deposit it in
there like the day that I want to go and make the match I will
bring it and put it into the account.” (Jasmine, 23)
55
Some youth understand the reason for rules
against unmatched withdrawals
“At first I was like, ‘Dang, I can’t . . . just get my money out when
I want to!’ I was like, ‘This is my money, why can’t I get it out?’ . .
. . Then I like realized, ‘Okay, this is for – to benefit me, like it’s
just not for me to just have my money sitting here or just spend
my money on like ridiculous things – ‘cause a teenager would.
Let’s say I save a thousand. I have another thousand. A teenager
with $2,000 is like ‘let’s go bonkers!’” (Jessica, 20)
56
Some youth are resentful that they cannot
readily withdraw their own savings
“The only thing I hate about that is being 22 [years old] and
having to go through somebody else to get my money out,
especially when I really need it. . . because I mean if I say, ‘I have
an emergency and really need my money that day,’ I still have to
wait for all the papers to be processed. . . and then finally get
back to me and say, ‘Your money’s ready to go’.” (Amber, 22)
“But say I want an unmatched – if I need money and it’s
unmatched, why should I have to explain it? It’s my money. Why
should I have to explain on a piece of paper why I need an
unmatched? I [can] see if it was matched, ‘cause you’re putting
in for me, but an unmatched, I don’t think I should have to
explain what I need money for.” (Amber, 22)
57
Unintended consequence of restrictions
Encourages lump sum deposits into the Opportunity
PassportTM account – instead of regular monthly savings.
Youth store and accumulate money at home or in other bank
accounts where they have easy access – then shift it to the
OPP account to draw a match for an approved purpose.
One staff person explained:
“. . . there may have been people who saved all their money
in another savings account till they got their money that they
wanted to match [then] they put it in their Opportunity
PassportTM account for one day, they match it the next
day and they take it out.”
58
Findings: OPP program effects
59
Matched Opportunity PassportTM savings
withdrawals
“I’d have saved like $50 out of a $200 paycheck and most of that
would be socked away – and I always had this sinking feeling,
like my wallet was being sucked dry, but I think I’m now for it,
because that money has been crucial for stuff all around, that
lord knows I never saw coming – everything from buying a car to
being able to afford that computer to just helping me out on a
pinch when it came to first month’s insurance for the car, or a
down payment on an apartment.” (Rachel, 21)
“So [it] actually benefited me in a lot of different ways like I
would save my money for something useful and something that
I can really do besides just spending it on unnecessary
things or things that I want at that time.” (Jessica, 20)
60
Opportunity PassportTM introducing first bank
account
“To be honest, the Opportunity PassportTM account was my first
account like saving in general so I kind of had no one to teach me
how to save until this came about. ‘Cause I remind you I was in
foster care so…” (Jessica, 20)
“[Without Opportunity PassportTM] I don’t know when I would
have started my first savings account I probably would have just
held my money until I decided to spend it I guess. I probably
wouldn’t have had a savings account until I got like 18, ‘cause no
one really talked to us about having savings or nothing like that so
probably [I] wouldn’t have (laughs) started saving or had a saving.”
(Jessica, 20)
61
Financial planning
“[The Opportunity PassportTM program] definitely was a push to
go into adulthood for me. . . . Let[s] you see where your
money’s going. ‘Cause a lot of times when you’re a teenager
you can just spend your whole paycheck and be like, ‘Where
did my money go?’ But when you actually . . . save your money
and you buy something that’s really worth something, you can
actually see where your money went – like a computer or my
first apartment or my car that I purchased with my IDA
account.” (Jessica, 20)
62
Opportunities for experiential lessons in
savings
Financial missteps have taught financial lessons
(e.g., overdrafts, exceeding credit limits, late
charges on late bills, lending untrustworthy
people money).
“… that big mess up that I did [going over credit card
limit] – it actually opened my eyes a little bit, so I’m
going to manage it a lot more better.” (Mike, 19)
63
Peer and adult support
“Because when I came to foster care I was scared. I didn’t talk to
nobody. I was scared. I kind of was like, you know, straight, ‘I
don’t want to deal with nobody.’ But now I’ve got these other
people [staff and other youth participants], and they’re my
family. That’s my family now.” (Kiara, 20)
“You know, just like we [other Opportunity PassportTM
participants] just hang out and…the situation comes up, and I’m
like, ‘Yeah, you know, I’ve been saving for a while. You know, I’m
planning on getting this and this and this.” (Mike, 19)
64
Peer and adult support, continued
“Yeah, they encourage me but it seems I always know I need to
save but. Yeah, I guess you could say other people. I already know
what I need to do. People don’t have to like tell me what I need to
do, but yeah, they can give you advice and stuff but I already
know what I need to do. It’s just sometimes stuff be hard for me
to do.” (Ashley, 19)
“Like we all – in the program – we all support each other or
whatever. You see, like I had a baby first, and then another girl had
a baby. All my stuff, brand new stuff, still I gave everything to her.
You know, they need the help. …We were like a family, basically.
We help each other out when we need it, you know. And …that’s
good ‘cause some of us didn’t have a family.” (Monica, 22)
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Enhanced educational opportunities
“When I purchased my first asset, it was a car. . . So that meant
that I didn’t have to ride the bus anymore, and it kind of made
college easier. I’ve been in college for quite a while. . . I used it
again for a laptop for school. . . And I still have that, and it’s been
really, really helpful in typing my papers and getting those in. . .
Because for a while, when I was taking the bus, for instance, I
had to go into school to use the computers there. And then the
printer there costs money. And so now that I have my own
computer and printer, I don’t have to worry about going and
paying money to print out – going to school and taking extra
time out of my schedule and extra money.” (Beth, 22)
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Intergenerational effects
“It’d be a lot harder [without Opportunity PassportTM] to buy
what I need for sure. I don’t think – I know we wouldn’t have got
the trailer. For sure. I know that wouldn’t of been good. I’m sure
that we would of gotten a few rounds and it wouldn’t of been
pretty. And I’m sure I would be livin’ somewhere I shouldn’t be
livin’ with somebody who knows. Tryin’ to get away from my
mom, bein’ rebellious, you know. And who knows if I would of
had custody of my kid then. So yeah. I think it’s such a domino
effect. If you hit one, they’re all gonna fall. So I think havin’ the
big piece, Opportunity PassportTM, to help me a lot was the big
thing. Yeah. It was the biggest step to do was to go to that and
then to realize, man, I do need to get out of my mom’s.
[Laughter]” (Darla, 23)
67
Findings: Problems with mainstream financial
services
» Bank fees
› Falling below minimum balance
› Checking overdrafts
»
»
»
»
Not secure
Identity theft
Inconvenience
Inhospitable and unfriendly
68
Bank fees
“Honestly, a bank is just out to get your money, and you know, if
you don’t give them what they want, then you know, you get an
overdraft or whatever. . . . We had a bank account, but they do
what they do best, and we still owe a lot of money that we
couldn’t pay over something stupid. . . . I went to use my debit
card at [convenience store], and I knew I didn’t have any money
on the card, but there was money going to go into the account,
so it kept bouncing back from [convenience store] to the bank,
so it ended up costing – was suppose to cost like $15 and ended
up costing $150 because they bounced it back and forth, back
and forth. . . . [It was] a complete overdraft ridiculous situation.
So I cut up my card and said yeah, I’m done.” (Allison, 20)
69
Bank fees, continued
“I had two savings account but [the bank] kind of – their
banking is kind of terrible. They take money out of your
account when they’re not suppose to. So they end up closing
my account up because I let them take it til it had zero
balance.” (Kiara, 20)
“I overdrafted it. It’s like 500 bucks. I went in there and paid it
off. I would have never done that before. Then I cut up the card
and said no thank you. I deal with cash. I’ll do cash. That’s all I
do. . . . cash.” (Trent, 23)
70
Bank fees, more
“Because I’ve overdrafted. I remember one time I overdrafted
like 30 cents . . . . Yeah, it was like $20 for an overdraft fee . . . . If
they would have told me I overdrafted 30 cents, I would have
just found some change in my couch. . . . That kind of upset me.”
(April, 21)
71
Traditional bank services not secure
Jasmine (age 23) uses prepaid card despite the fees: “because I
didn’t want [vendor] to have my [bank] account number, like my
real account number. . . I didn’t feel comfortable giving my debit
card number with other monies in there.”
72
Identity theft
“They opened accounts online . . . six with [designated bank]. I
asked [designated bank] how was I able to open up six accounts
through you guys? . . . She said well it looked like they did them
all online. So I’m like well, ‘How did y’all let them open up six
checking accounts?’. . . The lady from [designated bank], she
gave me the paperwork to fill out. Told me I had to make a
police report.” (Kiara, 20)
73
Inconvenience
Shondra, 19 cashes her checks at a local store, where they
charge $5 because her bank is “too far.” And she has “to catch
two buses to get there.”
Jade, 21 cashes her check at CCO “instead of running around, I
just go straight where I know they’ll cash it” because the fees
are low: “Some do two, three, four percent. You know, it
varies.”
Darla, 23 uses money orders “cause I don’t have a checking
account . . . I usually go pay in person most of my bills . . . A few
of them you can’t. I gotta mail them, so I do money orders.”
74
Inconvenience, continued
Amy, 23 keeps her money at home: “‘Cause I’d work and work
and work and I’d go to school and I’d be so busy and I’d have – I
remember one time I had like three paychecks sitting in my
dresser, or no, maybe like two . . . I didn’t have time – [to go to
the bank].” She was worried about someone stealing her checks
and cash.
“There was a point and time I was cashing my checks at a liquor
store but that was because my bank was . . . too far . . . I had to
cash my check at a store and he just charged us a few dollars so
it wasn’t too bad.” (Thomas, 21)
75
Traditional banks are inhospitable and
unfriendly
“You know, at my credit union, I know ‘em. They’re people in
my community. . . . We just know ‘em, you know. They’re – I
see ‘em at the restaurant when we go out to eat . . . Going like
to the credit union, I know people instead of, I don’t know, I
don’t want to say a stranger, but, I mean, you develop
relationships, and you trust those relationships. You base stuff
on those relationships and that trust. I never was trusted
before.” (Trent, 23)
76