National Perspective on Financial Literacy & Asset Development for People in Mental Health Recovery

1. National Perspective on Financial Literacy & Asset Development for People in Mental Health Recovery Judith A. Cook, PhD Professor & Director University of Illinois at Chicago, Department of Psychiatry Presented at NYAPRS 7th Annual Executive Seminar on Systems Transformation April 27, 2011, Albany, NY

2. A Word of Thanks to our Funders • U.S. Department of Education, National Institute on Disability & Rehabilitation Research • Substance Abuse & Mental Health Services Administration, Center for Mental Health Services

3. People in mental health recovery need to be on the road to economic security

4. Financial Literacy Financial literacy is the ability to understand money and how to manage one’s own personal finances through financial planning.

5. Low-Income People in Recovery May Feel Financial Planning is Futile “I just sat down the other day and wrote out checks with which to pay my bills and find out I’ve already spent my money before I even have it. There was no fat to trim, nothing to budget.” Woman in Chicago

6. A Fatalistic View Can Get in the Way of Planning “I think when I have money, ‘You know what? I may not be here tomorrow. Look at my friend who passed away suddenly.’ Then I don’t care about the end of the month.” Man from Georgia

7. UIC Financial Education Curriculum Lesson 1: What’s Important to You?values, needs vs wants; identifying financial goals, budgeting Lesson 2: Income vs. Expensesdifference between fixed vs. flexible expenses; developing a savings plan Lesson 3: Managing Your Debtcontrolling debt, how to increase your income, 101 ways to save $ Lesson 4: Understanding Creditunderstanding your credit report; managing credit/debt problems Lesson 5: Using Financial Institutionschecking & savings accounts, direct deposit, debit cards, using ATMs, online banking, bank loans Lesson 6: Building Consumer Skillssmart shopping, spending traps, spotting fraud, consumer rights

8. Financial Education Course Evaluation: Pre-Post Test Results Statistically significant increases (p<.10 by 2-tailed significance on paired-t-test) were observed on: How often do I... • Write down my financial goals. • Write out a spending plan that includes savings for goals and emergencies. • Use coupons. • Keep track of my spending. On a scale from 1=not comfortable to 5=very comfortable... • What is your comfort level with your knowledge of financial terms and concepts? • What is your comfort level with applying what you learned?

9. In Students’ Own Words… • “I am so aware now [about] what I am buying or what I am choosing not to buy. I use to go on sprees, now I am choosing not to waste money or overspend. I make mistakes sometimes but now I track expenses all the time. I am also more aware of credit card debt.” • “This course was a mirror and I’ve now begun to pay more attention to my spending.” • “I am saving in an envelope for vacation. And earned money by selling two things I don’t use.” • “I am now more motivated to address my debt, I’m working on agreements to pay off debt and I have a better understanding of my financial situation.”

10. You are like everyone else…

11. Asset Accumulation

12. Asset Accumulation has Documented Psychological Benefits • enhanced personal efficacy • greater personal control • feelings of empowerment • future orientation

13. Assets as Important as Income to Enhancing Quality of Life • Panel Study of Income Dynamics (Yadama and Sherraden, 1996) used simultaneous equation modeling • Found that assets had a positive effect on • expectations and confidence about the future • making specific plans with regard to work and family • more prudent and protective personal behaviors • more social connectedness with relatives, neighbors and organizations • Effects of assets in this analysis were found to be equal to those of income in their association with positive outcomes

14. Individual Development Account - IDA • Established by Assets for Independence Act • Run by U.S. Health & Human Services Office of Community Services under the Administration for Children & Families. • Save earned income for purchase of 1st home, small business capitalization, or post-secondary education • Participants must earn less than 200% of poverty level ($21,780/yr for family of 1) • Savings must be from earnings • Locked box accounts - emergency access only • SSI/SSDI & TANF recipients are eligible

15. IDAs - MATCHED Savings Accounts Federal Government Matches $20 Person Deposits $20 $20 + $20 + $20 = $60 Person Now Has $60 Local Bank or Philanthropic Organization Matches $20

16. IDA Programs – Savers with Psychiatric Disabilities http://www.cmhsrp.uic.edu/download/NRTC4.IDA%20Project%20Report.10.25.10.pdf

17. New Hampshire • Two programs: Dollars & Sense Credit Union Demonstration Project; Volunteer Income Tax Assistance & Financial Education Study • State universities coordinated the programs as part of research studies: U of NH; Southern NH University • 4 savers with psychiatric disabilities in each program • 3:1 match (Dollars & Sense), 4:1 match (VITA) • New Hampshire Community Loan Fund provided the match • Banks: Northeast Credit Union (Dollars & Sense), Citizens Bank (VITA) • 1 saver matched (Dollars & Sense) for a micro-enterprise, 2 matched (VITA) for post-secondary education & a micro-enterprise

18. New Jersey • Collaborative Support Programs of New Jersey • Based at a peer-run self-help center • 41 savers in MH recovery • 4:1 match for advanced education & micro-enterprise development; 2½:1 for home ownership • Local match from state MH authority & Wachovia Bank • Commerce Bank held IDA accounts • Outcomes: 19 savers matched, 3 homes, 9 degrees, & 7 micro-enterprises

19. Louisiana • Mental Health America of LA IDA Program • Based at a national mental health advocacy organization’s state affiliate • 10 savers • 2:1 match • Local match from State Office of Mental Health • Chase Bank • 9 savers matched, 1 micro-enterprise, 9 home repair purchases

20. Alaska • Cook Tribal Inlet Council IDA Program • Based at a social service agency for Alaska natives (in their Employment & Training Services Department) • 246 participants (savers with MH/SA disabilities & their family members) • 5:1 match • Local match from the Alaska Mental Health Trust Authority • Wells Fargo Bank • 107 savers matched, 53 home purchases, 44 post-secondary education, 10 micro-enterprises

21. Illinois • UIC/Thresholds IDA Program • Run by a state university research center & based at a community mental health center’s supported employment program • 5 savers • 2:1 match • Local match from the Rebecca Susan Buffett Foundation • Charter One Bank of Chicago • 3 savers matched, 1 micro-enterprise, 2 post-secondary education

22. California • CA Individual Self-Sufficiency Planning Project • Not IDAs but Independence Accounts through the SSA waiver program – people could save up to $8,000/year without penalty • 8 savers with psychiatric disabilities who were SSI beneficiaries • No match • Local banks held accounts • Matching not possible, savers purchased post-secondary education, moving expenses, transportation, vacations

23. Summary of Lessons Learned by Programs • Savers in MH recovery can save & match successfully • Many savers need ongoing social & emotional support, with peer support essential • Need for employment services to deal with job loss & work issues • Lack of affordable housing stock was a barrier • Multiple life issues impacted savers’ ability to match • SSA disability benefits issues remained problematic • Multiple collaborative relationships require administrative time & funding

24. Array of Services to Support Successful Saving • Employment Support • Ongoing Social & Emotional Support • Clinical Services • Financial Literacy Education • Asset-Specific Education • Benefits Planning Assistance

25. Which is the best approach? • Should we be mainstreaming people with disabilities into existing IDA programs? or • Should we be creating IDA programs that are tailored to the needs and circumstances of individuals with disabilities? (AFI, 2009)

26. Essential Administrative Partnerships • MH service delivery or advocacy organization, peer-run program, or nonprofit organization with MH expertise that serves as the program "home" • Program administrator funded directly by AFI to operate IDAs & draw down federal match • Bank or other financial institution that holds the IDA savings accounts • State or local government or tribal authority, community development fund, or philanthropic organization that provides local matching funds • Local organizations that promote financial literacy, offer asset-specific education & help, & provide financial services & supports

27. Thank You! UIC National Research & Training Center on Psychiatric Disability http://www.cmhsrp.uic.edu/nrtc/default.asp Financial Education Curriculum http://www.cmhsrp.uic.edu/nrtc/financial-education.asp Report on IDA Programs http://www.cmhsrp.uic.edu/download/NRTC4.IDA%20Project%20Report.10.25.10.pdf