In Real Life Blog Series: Mentors Support Young Men of Color in Financial Planning
Guest Author: Dan Horgan, MENTOR: The National Mentoring Partnership
April 30th, 2016
Posted In: In Real Life
April is National Financial Literacy Month. Research has shown that American teens rank below half of their peers in other developed economies when it comes to financial literacy. Mentors can play an important role in helping young people develop and maintain healthy financial habits – habits that are essential to their future success.
MENTOR: The National Mentoring Partnership (MENTOR) has chosen to recognize those who have demonstrated a deep commitment to delivering critical connections to our nation’s young people in this way, to aid them in achieving success at home, school and ultimately in the workforce. This blog series focuses on individual and group commitments to youth mentoring and the powerful impact it has had for young people in real life.
Sponsored by JPMorgan Chase – The Fellowship Initiative
By some estimates, less than 30% of Americans [i]feel like they are in control of their finances. For young people preparing to transition to adulthood, most of whom do not have a steady source of income, these challenges are far more daunting, especially when combined with other barriers they often face.
Tackling this issue head-on is The Fellowship Initiative (TFI), a JPMorgan Chase initiative that engages young men of color in comprehensive academic, socio-emotional, college access, and career readiness supports. One of the core elements of the TFI model are JPMorgan Chase employee mentors that are matched one-on-one with each Fellow and provide regular guidance about academic issues, college planning, financial aid and career pathways.
The support that mentors can provide young men of color in navigating the financial aid system to persist through and complete college is critical to them securing a quality job and achieving long-term financial security. The John W. Gardner Center for Youth and Their Communities issued a report in August 2014, “College Access and Completion among Boys and Young Men of Color,” that states, “Many African American young men drop out of college because they are not able to pay for tuition and related costs; others do not graduate within six years because they are busy working off-campus jobs to finance their education.”
JPMorgan Chase’s employee, Imani Farley says that”before talking to young people about their finances, mentors need to develop trusting relationships. Trust is achieved when both the mentor and Fellow practice empathy and avoid making assumptions about each other.”
TFI mentor, Nikki Merkerson, shared her strategy for supporting TFI Fellow William, “Meet Fellows where they are. Take the time to understand who influences them, how they define success, and what specific financial goals that they have. It is also important to establish a relationship with parents so that discussions on finances are reinforced and supported in the home.”
The following are tangible ways in which mentors can support young men of color on their path to achieving financial self-sufficiency:
- Talk about money. In order to establish a healthy relationship with money, we must view money as a tool to leverage for our personal and professional learning and growth.
- Have your mentee keep a money diary for a week outlining all of their expenses, revenue, and savings. Discuss with your mentee their spending decisions and savings goals as well as opportunities to both cut expenses and increase revenue.
- Have your mentee take the Spending Challenge to explore motivations behind spending decisions and the impact of using cash versus credit.
- Together, play SPENT which is an online simulation where players must make difficult decisions to live one month within a budget of $1000. Debrief the experience by examining the impact of our job choices, life’s unexpected expenses, and the importance of establishing an emergency savings fund.
- Strengthen positive money management habits. As we get more comfortable talking about money, it is important to translate our money management goals into action.
- Create a monthly budget that outlines revenue goals, anticipated expenses and targeted savings. Keep track of actual revenue, expenses and savings versus what was budgeted, and discuss how decisions and life circumstances impacted actual performance.
- Explore a credit profile to increase understanding of how our money management decisions impact our credit and purchasing power.
- Develop short and long-term savings goals, and celebrate milestones towards achieving the goals to reinforce the habit of saving.
- Examine ways to reinvest our personal profits in our growth and development such as training programs, networking practices / membership organizations, certifications, etc. Investing in skill building or increasing our social capital often expands our economic opportunities.
- Increase access to financial aid. The financial aid system can be intimidating and confusing for students and their parents. Increasing our knowledge of the system and having support throughout the process of accessing financial aid can significantly impact a young person’s persistence through and completion of college.
- Work through the completion of the FAFSA form together and clearly review financial aid eligibility. A 2009 research study with H&R Block concluded that “students and families who received both help filling out the FAFSA form and information about financial aid eligibility were significantly more likely to complete and submit the FAFSA form, enroll in college in the fall and receive more financial assistance.” (Source: “College Access and Completion among Boys and Young Men of Color”)
- Take advantage of financial aid workshops and counseling made available through financial aid offices on college campuses, local churches, employment centers, community-based organizations, and financial institutions.
- Seek out and take advantage of youth employment opportunities tied to money management skill building and coaching. Mentors can assist mentees in examining their paychecks to better understand gross versus net pay along with withholdings. Mentors can also assist mentees in setting up a basic checking and college savings account.
- Identify scholarships as a viable financial aid strategy in recognition of academic achievements, athletic performance, community/school leadership, volunteer service commitments, etc. Mentors can help mentees search for relevant opportunities and support mentees in completing scholarship applications.
9 million young people in America are in need of a trusted adult in their lives to guide them in moments big and small. Join the In Real Life movement and become an advocate, make a donation or become a volunteer.