By Carol Klocek
YWCA Fort Worth and Tarrant County
“My family can save how much money each month by making that one change?”
This has become one of our favorite questions asked by women who participate in the YWCA Financial Empowerment Program at YWCA Fort Worth & Tarrant County. Modeled after the financial literacy program at YW Dallas, we began implementing our program in January of 2013, and we are already witnessing lives transform.
The Hernandez* family had their children in a daycare at one of our three Child Development Centers. Mrs. Hernandez works as a housekeeper, and Mr. Hernandez is in construction, so their income is inconsistent. They make too much money to qualify for subsidies, but too little to get ahead. The family had to drop out of YWCA services because they fell too far behind in payments, so our Center Director contacted them to tell them about the new Financial Empowerment Program to see if they might be interested in financial literacy classes about budgeting, banking, savings and debt management.
The parents signed up for an evening session with a coach certified in Financial Social Work, and for a class with a Wells Fargo banker. The entire family came to the session: parents, grandparents, and seven children. In the first session, the family learned that they could save more than $100 per month by using traditional banking services instead of pre-paid debit cards and check cashing services. Right in the middle of the class, the family hugged and shed a few tears – of joy, but of frustration too. “I didn’t realize how much we were being taken advantage of,” said the grandmother.
People living in poverty, who disproportionately are people of color, are the victims of many predatory financial products: payday loans, title loans, pre-paid debit cards with monthly fees and per-use fees. A recent study by the Pew Research Center indicates that it takes five months on average to pay back one payday loan. Some states and many municipalities restrict these practices, but not in Tarrant County, Texas. Traditional banks are less likely to be located in high-minority, low-income neighborhoods, but predatory lenders are densely-located, and are intentionally friendly to marginalized people in their business practices.
Giving the Hernandez family, and many others, access to information is the first step in our work. They have the opportunity to have an individualized assessment through the YW Self-Sufficiency Calculator, attend classes taught by one of our Financial Literacy banking partners, have individual coaching to create and work through a financial plan and they have access to matched savings through our Women’s Empowerment Fund. But in our community, there is a critical next step. Concerned volunteers and staff are building a coalition to address these predatory lending practices and financial products. We cannot stand in silence when people are lured into debt traps from which they cannot escape. We are obligated to raise the level of awareness and put pressure on our elected officials – who often receive financial support from these businesses – to limit or eliminate these practices.
The Hernandez children are back in our Child Development Center, preparing for success in school. The family is actively working in Financial Empowerment courses, preparing for success in life. YWCA Fort Worth & Tarrant County is actively working to improve our services for families, so that many more families will have the same opportunity for success.
*Names have been changed.
Carol Klocek is the Executive Director of YWCA Fort Worth & Tarrant County and currently serves on the Fort Worth Advisory Commission on Homelessness. Her passion focuses on social services, stopping the cycle of poverty and economic empowerment for women and their families. With a wealth of experience from leadership roles at social service organizations such as The Salvation Army, Catholic Charities, The Presbyterian Night Shelter in Fort Worth and The Italian Home for Children in Boston, Carol has dedicated her career to improving lives within the community.
She holds a Master of Social Work degree from University of Texas at Arlington, and an Executive MBA from Texas Christian University.