Detroit, a city known for its resilience and determination, has witnessed a significant shift in its housing landscape, transitioning from a predominantly homeowner city to a renter-majority city. This transformation has sparked a growing interest among younger generations in seeking financial education resources to navigate the complexities of personal finance and homeownership.
Financial literacy, often referred to as financial education, is the process of acquiring knowledge and skills to better manage household budgets, manage and pay off debts, and invest in one’s future. While financial education services have been available in Detroit for years, many residents have yet to take full advantage of these valuable resources.
The Importance of Financial Education for Detroiters
According to 2021 Census data, the median household income in Detroit stands at $32,498 annually, a staggering $23,000 lower than the metropolitan area median income (AMI). Compounding this challenge, the rental listing site RentCafe reports that Detroit’s housing costs are 30% higher than the state average. This means that the average Detroiter is spending a disproportionately larger portion of their income on housing compared to most Michiganders, despite significantly lower monthly earnings.
A Detroit Future City report revealed that over half of the city’s residents are cost-burdened, meaning they spend more than 30% of their income on housing costs. Gail Perry Mason, the founder and director of Money Matters for Youth, emphasizes the cyclical nature of poverty, where individuals miss out on opportunities for wealth accumulation, further perpetuating financial challenges.
“And we need opportunities to have the credit to buy the home. You need opportunities to have a down payment. And so… the only way we’re going to do it is we come together and share resources and learn about the down payment programs and learn about so many different programs out here. It needs to be in every household, and that’s going to come through legacy and generational wealth,” Mason explains.
Jhalisha Foster, a realtor at Fathom Realty, underscores the importance of early engagement with mortgage professionals during the financial education journey. “Mortgage professionals can put them in a position where, you know, even if you’re looking to purchase, let’s just say 2023, 2024. Talking to a mortgage professional even right now will help them be in position to do it properly,” she advises.
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Where to Find Financial Education Services in Detroit
Detroit and Wayne County offer a wealth of organizations dedicated to providing free financial education courses and resources to individuals and families of all ages.
Wayne Metropolitan Community Action Agency (Wayne Metro): Wayne Metro’s Financial Empowerment Center offers financial counseling services to individuals and families. Additionally, their HOST program connects aspiring homeowners with HUD-certified housing coaches who guide them through the homeownership journey, from preparation to closing.
Carlos Santiago, a financial manager at the Wayne Metro Financial Empowerment Center, emphasizes the importance of living within one’s means. “As far as financial education with housing goes, it’s definitely knowing when to live within your means. What we’ve noticed from clients is a lot of them have that idea that they need to have a certain car, they need to live in a certain neighborhood or dress a certain way. What we like to just instill in our clients is the only person that you should be really worrying about is yourself because at the end of the day, other people aren’t paying your bills.”
Wayne Metro offers a monthly class on the Foundations of Wealth Building, covering topics such as budgeting, credit, landlord-tenant rights, the home buying process, mortgage intervention strategies, home maintenance, financial recovery, and home repair tips.
Central Detroit Christian: Central Detroit Christian provides financial education and counseling services to Detroit residents, empowering them to make informed decisions about their finances.
LISC Financial Opportunity Centers: The LISC Financial Opportunity Centers offer a range of financial education programs and resources to help individuals and families achieve their financial goals.
Southwest Solutions: Southwest Solutions is dedicated to promoting economic self-sufficiency and homeownership through financial education and counseling services tailored to the needs of Detroit residents.
DetroitPAL: DetroitPAL, a nonprofit organization, offers financial literacy programs and resources to youth and families in Detroit, equipping them with the knowledge and skills necessary for long-term financial success.
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Conclusion
Detroit’s transition to a majority-renter city has highlighted the importance of financial education for its residents. By leveraging the numerous free resources available throughout the city and Wayne County, Detroiters can gain invaluable knowledge and skills to manage their finances effectively, reduce debt, build credit, and ultimately achieve homeownership goals.
Organizations such as the Wayne Metropolitan Community Action Agency, Central Detroit Christian, LISC Financial Opportunity Centers, Southwest Solutions, and DetroitPAL offer a range of financial education programs and counseling services tailored to the diverse needs of individuals and families.
Empowering oneself with financial literacy is a crucial step towards achieving long-term financial stability and unlocking the dream of homeownership. By taking advantage of these resources, Detroiters can pave the way for a brighter financial future and contribute to the revitalization of their beloved city.
Frequently Asked Questions (FAQs)
Q: How many times can I meet with a financial counselor?
A: You can meet with financial counselors as many times as needed. Typically, appointments are scheduled every two weeks, but the timeline is based on your individual needs.
Q: Does the Financial Empowerment Center offer group financial classes?
A: The Detroit Financial Empowerment Center counselors provide individual, one-on-one counseling sessions. The initial session lasts approximately one hour, and sessions are not conducted in a group setting.
Q: Are the financial counselors licensed or certified?
A: Counselors are trained and certified through the Cities for Financial Empowerment (CFE) Fund curriculum. They are required to complete the training course and pass certification exams.
Q: Can the Financial Empowerment Center provide offsite presentations?
A: Yes, representatives from the Detroit Financial Empowerment Center can conduct presentations to groups interested in learning more about the counseling process. Contact Chelsea Neblett, Financial Empowerment Manager, at neblettc@detroitmi.gov for more information.
Q: Will counselors come to my home for sessions?
A: Counseling sessions are typically conducted at FEC centers. However, counselors can conduct phone sessions if necessary, provided that signatures on the required disclosures are obtained before the initial session.
Q: How long are the counseling sessions?
A: The first session lasts between one and one-and-a-half hours. Subsequent sessions can range from 30 minutes to one hour, depending on your specific needs.
Q: What documents do I need to bring to the first session?
A: While it is not required to bring any documentation for the first session, providing relevant financial documents such as your ID, paystubs, account statements, and bills can be helpful for the counselor to better understand your financial situation.
Q: What types of financial issues can financial counselors assist with?
A: Financial counselors can help you with any financial situation you may be facing. They will work with you to develop a budget, create an action plan based on your needs, follow up on your progress, and provide referrals when necessary. The main focus areas include decreasing debt, increasing savings, repairing credit, and accessing safe and affordable banking products.
Q: Is there a fee to obtain my credit report and score?
A: No, all services provided by the Financial Empowerment Center are completely free. Counselors will review your credit report and score, along with your current financial situation, at no cost to you.
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