Remember when a loaf of bread cost less than a dollar? Obviously, much has changed since then. Times are tough for a lot of people, but especially the 50 million Americans currently living below the poverty line on $23,500 or less a year. The government calls them “the working poor.” Many of them work full-time jobs, and still have trouble keeping a roof over their head, and food on the table.
Blame low wages, rising costs of living, and wage inequality for some of it. However, skyrocketing consumer debt is another big contributor. We are a nation of debtors owing some $11.65 trillion in personal debt, a lot of it owed by low-income households who can least afford it:
According to recent statistics, 54 million American households collectively owe more than $800 billion in debt to credit card companies — and the average debt per consumer in the 20 largest US cities is between $24,000 and $27,000. Meanwhile, the services and support available to low-income residents are inconsistent at best and counterproductive at worst.
In 2008, then New York City mayor and billionaire philanthropist Michael Bloomberg launched his own war on poverty by establishing Financial Empowerment Centers (FECs) throughout New York City that provide free, professional, one-on-one financial counseling to help low-income families get out of debt and build savings.
The counseling and information Financial Empowerment Centers provide can be a path forward during tough times. And they have already helped thousands of families struggling with debt get back on solid financial footing and start building a future—Mayor Bloomberg
You can’t argue with success. In New York City alone FECs conducted more than 47,000 counseling sessions, helped low-income families reduce debt by more than $16.1 million and build more than $2.6 million in savings.
In 2013, with funding from Bloomberg Philanthropies and its partners, Living Cities and Cities for Financial Empowerment Fund, six other cities replicated NYC’s model and began operating their own FECs. And in 2014, another six cities received grants to set up FECs. Today, there are 13 cities providing financial counseling and debt reduction assistance to low-income residents. FECs now operate in New York, Denver, Lansing, Nashville, Philadelphia, San Antonio, Cleveland, Hawaii County, Hartford, Los Angeles, Miami, San Francisco and Seattle.
Professional money management and financial planning were once tools most often associated with the wealthy. With the rise of financial empowerment centers that is certainly no longer the case. FECs have put power back in the people’s hands.
Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime—a Chinese proverb