The financial stress of Americans has never been so evident. In fact, 56% of Americans can’t cover a $1,000 expense with savings (yikes!) The need for increased financial literacy is of utmost importance. Thankfully, Financial Empowerment Centers (FECs) provide assistance that helps families stay on track with their financial goals. Let’s talk about what they are and how they can help set you on the right financial path.
What Is a Financial Empowerment Center (FEC)?
In 2013, Financial Empowerment Centers (FECs) were introduced to municipal governments by The Cities for Financial Empowerment (CFE) Fund as an opportunity to educate and counsel individuals on money management. Highly trained financial counselors work to provide free, one-on-one consultations with individuals on budgeting, paying off their debt, credit counseling, managing their financial responsibilities, and opening affordable accounts with credit unions. Individuals are allowed to meet with the counselors as often as they need, regardless of income or immigration status, and all consultations are completely confidential.
The initiative is backed by Bloomberg Philanthropies and was kicked off in just five U.S. cities. Now, the initiative is expanding to include additional cities, with opportunities for more municipal governments to get on board.
How Do FECs Work?
FEC planning partners work closely with municipal governments to start their own FEC. They’re responsible for training counselors according to the training standards put in place by the CFE Fund. Once the training is completed, the financial counselors are set up to fulfill the core tenets of the model: to help clients achieve their financial goals and deal with any complex financial challenges through one-on-one financial counseling at no cost. This helps clients make better financial decisions, be better prepared for debt management, and improve their overall credit scores.
Local governments can utilize the FEC Academy to plan and launch the FEC model for its local residents. Through this resource, municipalities can receive the technical assistance they need to get started, access the resources and information they need to function as a legitimate FEC, and receive training for potential counselors.
Do FECs Help Improve Your Finances?
In short, yes!
Since 2013, over two dozen FECs have worked with more than 130,000 clients to help them reduce their debt by more than $190 million and increase their savings by over $35 million. That’s quite a milestone! Currently, at least thirty-four municipalities are expected to launch this initiative, with remote services implemented since COVID-19.
How To Get Started With FECs
Municipalities are now jumping on board with securing the funding to launch FECs for its residents. Centers have been launched in or are expected to be launched in cities in CA, CO, CT, HI, IA, IL, KY, LA, MI, MD, NJ, NY, OH, PA, SC, TN, TX, WI, and VA. If you’re interested in your city or county joining the FEC movement, you can enroll in the next FEC Academy. Here are the steps below:
- Local governments should respond to the CFE Fund request for applications.
- Partners will help identify strategies for your municipality to launch its own FEC program.
- Your municipality will receive access to the resources it needs to successfully impact the lives of its residents.
The Bottom Line
The financial health of Americans is at risk as it gets harder for individuals and families to reach their financial goals. Thankfully, FECs are a fresh new way to teach more people the ways to achieve the financial freedom they’re looking for, with no strings attached. This is a free service with no limitations on eligibility! It’s truly an opportunity for local governments to go further than ever to positively impact more households. Ultimately, this initiative gets many people much closer to achieving the American dream. So don’t wait: learn more about FECs now!