Article Details

Research Database: Article Details

Citation:  Mary C. Tuominen & Eleanor L. Thompson (2015). “There Was No Money Left to Save”: Financial Literacy and the Lives of Low-Income People. Journal of Progressive Human Services, 26 (2), 148-165.
Title:  “There Was No Money Left to Save”: Financial Literacy and the Lives of Low-Income People
Authors:  Mary C. Tuominen & Eleanor L. Thompson
Year:  2015
Journal/Publication:  Journal of Progressive Human Services
Publisher:  Routledge
DOI:  https://doi.org/10.1080/10428232.2015.1018104
Full text: 
Peer-reviewed?  Yes
NIDILRR-funded?  Not reported

Structured abstract:

Background:  Financial literacy programs across the United States were implemented as a means of helping low-income individuals cope with financial problems. Ideally, these programs help individuals find a way out of poverty by teaching self-sufficiency, financial management, and saving. A variety of financial literacy programs exist and attempt to educate consumers in low income families. This study examines the financial coaching program Smart Money and the role it plays in participant’s lives.
Purpose:  Examining financial literacy programs for low-income families and determining the effectiveness or lack thereof of these programs to improve the lives of individuals. Using an ethnographic approach to the study, the researchers investigated the Smart Money program over an 18-month period, and its impact on low-income families.
Study sample:  192 mart Money clients in the initial study sample. Of that group, the researchers identified 43 who completed the program, and interviewed 18 of that number. The sample size was small due to the inability to contact the entire sample group.
Data collection and analysis:  The researchers established face-to-face interviews with 18 participants in the Smart Money program. Each participant was interviewed. Researchers explored client’s beliefs and behaviors prior to and after the completion of the Smart Money program. Each participant received a $15 gift card at completion of the interview process.
Findings:  Smart Money is a financial literacy program and the participants involved were already using some of the behaviors taught. For example, 60% of participants were using checking accounts, a key coaching approach for these individuals. Unemployment rates were high among the group and remained at about 53% of participants even after the coaching program was completed. Further, 87% of participants remained on public assistance after completing the Smart Money counseling. Clients remained in poverty despite in the education they received. Clients articulated ideas of hard-work and financial discipline as taught by the Smart Money program. Further, they commented on their ideas of individualism achievement and meritocracy in contrast to other people on public assistance. They saw themselves as different from other individuals in the same situation. All commented on breaking free from the cycle of poverty even though most remained in exactly the same situation they began the program in. These participants commented on the hegemonic factors that kept them in poverty like “the economy” while seeing themselves as “hard working” people. All talked about the economic recession as a factor in keeping them in poverty. Further, even though these individuals believed in the power of self-discipline, all remained in poverty and failed to achieve the named goal of financial freedom or self-sufficiency.
Conclusions:  Participants in the Smart Money program remained in poverty after the counseling sessions. At the same time, they supported the idea that individualism and hard work can lead to financial freedom. The tension between the lived experience and the hegemonic ideal of financial independence remains a question for policy makers and, specifically, social workers. Social workers have the unique opportunity to advocate for these individuals and help them negotiate the challenges of their particular situations. Using the knowledge gained from interviewing low-income families, social workers can help these families understand the limits of the financial education programs and help individuals avoid high risk, predatory lending and other financial scams.

Populations served:  Other
Interventions:  Other
Outcomes:  Employment acquisition