The challenge 

Once taught at elementary, high school and college levels, classes in financial education were drastically reduced between 1970 and 1990. Today, many Americans lack the basic skills they need to make sound financial decisions.  

• Research suggests most individuals know little about managing personal finances, and their choices reflect this lack of knowledge.

• In the St. Louis metro area, 7.5% of households do not have a bank account; 31% of African-American households do not have a bank account.

• Without a banking relationship, people often turn to alternative financial service providers, such as payday lenders, check cashing centers, pawn shops and rent-to-own operations, which often charge higher fees.

United Way is helping 

Financial education can encourage families to use reputable financial services, accumulate savings and assets, avoid excessive debt, prevent discrimination and avoid predatory lending.

In 1998, United Way formed a partnership of six agencies to fund and manage Individual Development Accounts, matched savings accounts for low- to moderate-income working families. In 2006, a specialized program was created for youth aging out of foster care.

IDAs are used to acquire assets such as purchasing a first home, paying for post-secondary education, buying a car or funding a small business. Regular saving and financial education provided by the collaborative are conditions for participation. 

So far, more than 675 adults and 75 youth aging out of foster care have successfully completed the IDA program, collectively saving more than $1 million to purchase assets needed to move toward financial stability and independence.