A Wealth of Opportunity

At her six-month review, Claudia got the kind of news recent hires often look forward to hearing: “You’re getting a raise,” her boss said, congratulating her. But Claudia wasn’t excited, she was nervous. As a human services representative with Hennepin County, the single mom earned about $35,000 a year—a salary that, when combined with her partner’s, still qualified her to receive childcare assistance from the county. A jump in pay meant she would no longer be eligible for that benefit, yet her new salary wouldn’t come close to covering the full cost of daycare without it. Claudia faced a difficult decision: Either take the raise, lose her childcare support, and jeopardize her financial security; or turn down the raise and risk upper management questioning whether or not she was committed to her job. 

“In that moment where you’re left to make a decision and you don’t have enough knowledge, you could lose a lot,” says May Xiong, the vice president of employment readiness at Project for Pride in Living (PPL), a Minneapolis nonprofit.

The staff at PPL’s Financial Opportunity Center (FOC) help people navigate tricky situations like Claudia’s. Financial coaching programs are usually separate from those that focus on job training, but that’s where PPL—and the nearly 90 other organizations across the country with FOC programs—are different. They blend the two together, showing people how money management skills are intricately tied with their ability to get and keep a job, and build long-term financial stability. 

Every year, PPL enrolls nearly 250 students like Claudia in its job training programs, preparing low- to medium-income individuals for careers in fields like healthcare, the public sector and banking. Throughout the program and for a year after, those same students take financial literacy classes and meet with a financial coach to learn about money management, budgeting, credit scores and benefits they’re eligible for through the county or their employer. It’s information like this that gets students thinking about what comes next after getting hired.

“When we started doing this work, some students were really excited to get their first paycheck,” says May. “But the first thing they did was buy items they couldn’t afford.”

What went forgotten were less flashy necessities like rent, food or gas to get to work. More often than not, a stable paycheck alone doesn’t lead to long-term financial security; it’s knowing how to budget your money to cover basic needs that keeps you afloat. Unexpected expenses—like a car that breaks down—can derail people from showing up for a job if they can’t afford to fix their vehicle and haven’t planned ahead.

That’s why financial coaching has become such an integral part of a successful workforce strategy for PPL, and so far, the numbers support the organization’s approach. According to a study from the Economic Mobility Corporation, FOC participants are more likely to hold a job year round, reduce their debt and build positive credit histories than individuals who participate in other workforce programs. Despite encouraging data, PPL says it’s still difficult to find funding for work like this. 

“When you’re investing in a program, you want immediate results,” says May. “That doesn’t happen with this work. It takes time. A credit score doesn’t happen overnight.”

Today, there are seven FOCs—including PPL’s—operating in the Twin Cities, and dozens more across the U.S. Each center is funded in part by the Local Initiatives Support Corporation (LISC), a national organization with offices in more than 35 cities throughout the country, including the Twin Cities.

“LISC is ahead of the game,” says May. “Funders often subsidize a program for a year or two. If they don't see success, they stop.

It took about five years of trial and error before PPL figured out how to successfully integrate the FOC model into its work. Now that it has, the organization is seeing the effects of the program ripple out to it’s students and the community. For May, Claudia’s challenge with childcare is just one example that demonstrates the importance of PPL’s long-term approach when it comes to helping people stay in jobs over time. The single mom’s experience ended up being one factor that sparked a larger conversation at Hennepin County about how to support employees better in the workplace. “For everyone to be successful, sometimes it also requires employers to do something differently during their on boarding process, too,” says May. Ultimately, the county decided to hire a new liaison position on staff—a person that Hennepin County employees could turn to when they wanted to talk about difficult circumstances, like Claudia’s, that might put their job at risk.

As for Claudia, she decided to take the raise her boss offered her. She lost her childcare support, but the county connected her to a new daycare provider that offered sliding scale fees. With a little budgeting help from her financial coach at PPL, Claudia found a way to make the provider affordable on her new salary.

“Many of our students don’t have a strong support system, so we fill that role,” says May. “This was a real life situation—and it’s probably one a lot of our students face—but people don’t talk about it. Our job is to help students see the whole picture, and in the process make the decisions they determine are best for them.”