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Financial Security for All - Personal Finance (Bernalillo County)

Plan Goal

Financial security is important to individuals, families and communities. Financial literacy is important for all income levels. It is especially critical for limited resource families. The fewer the resources the less room to make financial errors or dea

Situation Statement

Financial security is important to individuals, families and communities. Financial literacy is important for all income levels. It is especially critical for limited resource families. The fewer the resources the less room to make financial errors or deal with emergencies such as medical, dental, loss of job or death of a wage earner. The household assets of communities are an indicator of a region's economic stability and prosperity.

The 2011 per capita income in New Mexico was $34,575 which ranks 43th in the nation. Of the 2.1 million people in New Mexico (2010), 20.4% of them live below the poverty level compared to 15.3% nationally. Although the 6.5% unemployment rate in New Mexico for August is lower than the 7.8% nationwide, New Mexico is one of the states with the highest percentage of working families at poverty level at 41.2% (ranked 48th), compared to 31.2 nationally. New Mexico also ranks among the worst five states in the US for low-income working families with parent without health insurance (50%, 4th), children in low-income working families (47.1%, 3rd, and adults with no high school degree or GED (16.2%, 5th).

The low per capita income is related to low education attainment. About 17.3% of adults age 25 or older in New Mexico do not have high school degree or its equivalent. This figure is even larger for Hispanic and Native Americans in the state, at 30.0% and 27.8% respectively. It is estimated that at least 20% adults in New Mexico are illiterate 46% of adults in New Mexico are functionally illiterate, which refers to the inability to adequately deal with simple daily demands. Given the complex nature of personal finance, the proportion of functionally financial illiterate in New Mexico is expected to be more than 50%. The area of personal finance itself covers a wide array of fields such as budgeting, savings, spending, investments, retirement planning, credit, mortgage, financing, frauds, scams, and taxes.

Residential real estate is the biggest holding of wealth for most households. Credit problems and lack of savings can make it difficult for families to become home-owners. The home-ownership rate for New Mexico families in 2010 was 68.6% which is comparable to the national average at 66.9%. But the recent economic downturn is likely to put homeowners into difficulty in maintaining their house, physically and financially.

Many of our young adults do not know how to manage their finances and many college students graduate with a high debt load due to student loans and overuse of credit cards. The average credit card debt for 2011 is over $6,820, which is higher than national average at $6,576.

Target Audience and Actions

High School Students and teachers who teach financial literacy, young adults and other adults who request information or programs on financial topics

Short-Term Objectives

Short-Term Objectives
1. Over 50% of youths who participate in youth a personal finance program (e.g. High School Financial Planning Program) reported an increase in overall knowledge in budgeting, savings, credit card use, and other credit-related issues.
2. Among youths who participate in a youth personal finance program, 40% of teens will increase knowledge about credit card costs.
3. Among youths who participate in a youth personal finance program, 40% of teens will plan to start saving
4. Following a personal finance course for college underclassmen, 70% of students who took the course will improve their comprehension on basic budgeting skills, debt management, and credit cards.
5. Following a personal finance course for college upperclassmen, 50% of students who took the course will improve their comprehension on home and car financing, life insurance, investment, and retirement planning.
6. After the completion of personal finance program for adults, 70% of participants will have improved understanding on basic personal finance issues such as budgeting, savings, retirement planning, and credit card use.
7. After the completion of personal finance program for adults, 70% of participants will recognize the importance of personal records, a valid will, durable power of attorney and other estate planning documents as a result of the legal education program.

Medium-Term Objectives

Medium-Term Objectives
1. Among adults who participated in a personal finance program but had not requested for a credit report in the last 12 months, 50% of participants will have obtained their credit reports after one month.
2. Among adults who participated in a personal finance program, 40 % of participants will have made one financial change after three months which includes opening a bank account, diversify investment plan, discarding unnecessary credit cards, paying off debt on consistent basis, and/or consulting a debt counselor.
3. Three months after completing a personal finance program, over half of youth participants will employ at least one new healthy financial habit which includes opening a savings account, consistent savings plan, making a budget, reducing spending on wants, and/or paying off debts.
4. Three months after completing a personal finance program, over half of students who took a personal finance course will take on new at least one healthy financial habit which includes making a budgeting skills, having debt elimination plan, opening a savings account, developing reading habit on personal finance matters, and reducing unnecessary spending.
5. Six months after completing personal finance program for adults, 50% of participants reported will employ healthy personal finance habits such as budgeting, savings, retirement planning, and credit card use.

Long-Term Objectives

Long-Term Objectives
1. Among home economics county agents (or their representatives) who participated in home economist's financial education program, 75% of these agents will understand the basics of personal finance such as budgeting, credit cards, debt payments, home purchasing, savings, and investments.
2. Family resource management extension specialist will conduct projects or lead a grant writing group at least once a year.
3. Among those who participated in personal finance program, 30% of participants will have increased savings after two years.
4. Among those who participated in personal finance program, 20% will have employed a solid retirement planning in the process after three years

Evaluation Plan

Written evaluations will be done at end of class or program.