Financial Peace of Mind
Name: James Burton HC ‘11, Haverford Microfinance Club
Institution: Haverford College
Project Location: Philadelphia, USA Partnership: Consumer Credit Counseling Service of Delaware Valley
Haverford Financial Literacy Course
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Background/Rationale
T h e w o rld c u rre n tly fin d s its e lf in o ne o f th e w o rst fin a n c ia l c ris e s o f o u r tim e . If th e re is o n e th in g th a t th is e c o n o m ic m e ltd o w n h a s ta u g h t u s , it is th a t s o u n d p e rs o n a l fin a n c e is c ru c ia l to th e fu nc tio n in g o f a sta b le w o rld e c o n o m y . T h e e ffe c ts o f u n e d u c a te d sp e n d in g a n d n a ïv e b o rro w in g h a v e p u t o u r e c o n o m y in to a ta ilsp in o f e p ic p ro p o rtio n s a n d its e ffe c ts a re b e in g fe lt w o rld w id e. It is s a id th a t w h e n th e d e v e lo p e d w o rld c a tc h e s th e c o ld , th e d e v e lo p in g w o rld g e ts th e flu . T h is c u rre n t d o w n tu rn is n o e x c e p tio n . It w ill ta k e a re b o u n d fro m th e b o tto m u p in b o th w o rld s to tru ly re s to re o rd e r to o u r d a m a g e d e c o n o m y a n d re g a in c o n fid e n c e in th e w o rld ’s c re d it m a rk e ts . In a n e ffo rt to g e t th e life b lo o d o f o u r e c o n o m y flo w in g o n c e a g a in , w e , th e H a v e rfo rd M ic ro fin a n c e C lu b, h o p e to u se H a v e rfo rd fu n d in g to sp re a d fin a n c ia l lite ra c y a n d e d u c a tio n a s fa r a n d w id e a s w e c a n re a c h . E a c h y e a r, H a v e rfo rd stu d e n ts s p e n d th e ir s u m m e rs in o v e r 4 0 d iffe re n t c o u n trie s a n d 4 0 d iffe re n t sta te s. T h is n a tu ra l n e tw o rk re p re s e n ts th e fa s te s t c o n d u it to s p re a d fis c a l re sp o n sib ility , c re d it c o u n s e lin g , a n d s a v in g s g ro w th. A n y p e rs o n p a rta k in g in th is p ro je c t m u st c o m m it to sit d o w n a n d te a c h th e c u rric u lu m w e p ro d u c e to a t le a st th re e o th e r p e o p le . E a c h o f th o s e th re e p e o p le m u s t c o m m it to a n o th e r th re e , a n d s o o n . T h is e x p o n e n tia l e x p a n sio n h a s th e p o te n tia l to re a c h th e m o st p e o p le in th e fa s te s t a n d m o st p ro fo u n d w a y fo r $ 1 0 ,0 0 0 .
The Big Issue
P o v e rty is a c u ra b le a ilm e n t. H o w e v e r, lik e m a n y c u ra b le d is e a s e s a ro u n d th e w o rld , m a n y p e o p le fin d th e m s e lv e s w ith o u t a c c e s s to th e re m e d ie s th a t e x is t. O n ly in th e p a s t 2 0 y e a rs h a v e th e p o o r fin a lly b e g u n to se e fin a n c ia l s e rv ic e s tric k le d o w n in to th e d e v e lo p in g w o rld . S in c e th e n , th e w o rld h a s w itn e s s e d a m a s s-m o v e m e n t to w a rd le n d in g to th e p o o r a fte r s e e in g th e s u c c e s s M u h a m m a d Y u n u s h a d in B a n g la d e s h. H o w e v e r, w e a re o b se rv in g tre n d s th a t in d ic a te a te rrib le d is se rv ic e to th e p o o r o n th e p a rt o f th e m ic ro-le n d in g in d u s try d u e to im p ru d e n t p ro fit in c e n tiv e s . M o re a n d m o re re p o rts a re e m e rg in g th a t s u g g e s t th a t m a n y m ic ro fin a n c e in stitu tio n s a re in c rea sin g ly m o tiv a te d to in c re a se th e n u m b e r o f c lie n ts th e y le n d to in ste a d o f fo c u sin g o n th e q u a lity o f se rv ic e th a t e a c h c lie n t re c e iv e s . In o th e r w o rd s , M F I’s a ro u n d th e w o rld a re s lid in g in to th e b u sin e ss o f s e llin g c re d it to th e p o o r a n d m o v in g o n in s tea d o f ta k in g th e tim e to w o rk w ith th e m to d e v e lo p th e ir fin a n c ia l s e c u rity a n d p ro m o te fin a n c ia l e d u c a tio n. O fte n , th is tra n s la te s in to liftin g th e p o o r o u t o f p o v e rty a n d stra ig h t in to d e b t. D o m e stic a lly , lo w -in c o m e b o rro w e rs fa c e th e sa m e stru g g le . H o w e v e r, u n lik e in th e d e v e lo p in g w o rld , la c k o f c re d it is n o t th e is s u e h e re in A m e ric a . B o rro w e rs o f a ll ty p e s h a v e h a d e a sy a c c e ss to m o n e y o v e r th e la s t d e c a d e , a n d th a t is p a rt o f th e re a so n th a t th e U .S . is in its c u rre n t p re d ic a m e n t. T h e re a re so m a n y w a y s to in d e b t o n e s e lf in th is c o u n try th a t it is n o t su rp risin g th a t s o m a n y A m e ric a n s a re liv in g b e y o n d th e ir m e a n s . S im ila r to th e p ro b le m s th a t e m e rg e d fro m m ic ro-le n d in g , th e sy s te m is rig g e d su c h th a t th e c re d it in d u s try o n ly c a re s a b o u t se llin g c re d it a n d m o v in g o n , b e c a u se it is n o t in th e ir b e st in te re s t to h a v e p e o p le p a y th e ir c re d it c a rd b a la n c e in fu ll e a c h m o n th . M o re d is tu rb in gly , w e s e e th a t p re d a to ry lo a n ta c tic s in th e U .S . a re b e c o m in g m o re p re v a le n t a s m o re lo w -in c o m e p o p u la tio n s stru g g le to m a k e e n d s m e e t a t w h a te v e r c o st.
Haverford Financial Literacy Course
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The Project
O u r F in a n c ia l lite ra c y in itia tiv e h o p e s to re v e rs e th is tre n d o f n e g lig e n c e a t h o m e a n d a b ro a d b y d e v e lo p in g a p e rso n a l fin a n c e c u rric u lu m , s u ite d fo r v a ry in g n e e d s , th a t c a n b e a c c e ss ed o n -lin e a n d ta u g h t in a o n e-o n -o n e s e ttin g. W e p ro p o s e to firs t g e t c e rtifie d th ro u g h o u r d o m e s tic p a rtn e rs h ip in o rd e r to te a c h o u r c o u rs e, a n d th e n sp re a d o u r k no w le d g e to o th e r H a v e rfo rd s tu d e n ts in a n e x tra c u rric u la r c la s s s e ttin g d u rin g th e s p rin g . T h e n , d u rin g th e s u m m e r, w e w ill c a rry o u t o u r P ro je c t in th e P h ila d e lp h ia a re a a n d a b ro a d . A g ro u p o f stu d e n ts fro m th e e x tra c u rric u la r c o u rs e a n d th e M ic ro fin a n c e C lu b w ill s e lf-d iv id e a n d g o o u t in to lo w -in c o m e p o p u la tio n s w ith th e s u p p o rt o f o u r d o m e stic n o n-p ro fit p a rtn e r a n d sp re a d p e rs o n a l fin a n c ia l e d u c a tio n to id e n tifie d in d iv id u a ls in n e e d. W h e th e r w o rk in g a t h o m e o r a b ro a d , w e w ill m a k e su re th a t w e c re a te a fle x ib le o n-lin e c u rric u lu m th a t c a n b e a d a p te d b y th e c o u n se lo r to fit a n y c lie n t’s n e e d s, w h e th e r h e o r sh e is a n e n tre p re n e u r ta k in g a m ic ro-c re d it lo a n , o r a h o u se h o ld c o n s u m e r m a n a g in g a fa m ily in c o m e .
The Domestic Partnership
T h e C o n su m e r C re d it C o u n se lin g S e rv ic e o f D e la w a re V a lle y (C C C S D V ) h a s b e e n se rv in g th e P h ila d e lp h ia a re a fo r o v e r 4 0 y e a rs . T h e y h a v e h e lp e d o v e r 5 0 0 ,0 0 0 in d iv id u a ls ta k e c o n tro l o f th e ir fin a n c e s a n d im p ro v e th e ir liv e s th ro u g h o n e-o n -o n e c re d it c o u n s e lin g a n d p e rso n a l fin a n c ia l m e n to rin g . T h e y a re a n a c c re d ite d m e m b e r o f th e N a tio n a l F o u n d a tio n fo r C re d it C o u n s e lin g a n d w e re c h o s e n in 2 0 0 3 to le a d th e fiv e-y e a r P h ila d e lp h ia S a v e s p ro g ra m , w h ic h h a s b e e n a g re a t su c c e ss th a n k s to th e e ffo rts o f C C C S D V to se c u re in s titu tio n a l p a rtn e rs lik e B a n k o f A m e ric a. T h e ir e ffo rts h e lp to sta b iliz e c o m m u n itie s a n d im p ro v e th e q u a lity o f life fo r in d iv id u a ls a n d th e ir fa m ilie s in th e P h ila d e lp h ia re g io n. T h e y d o s o b y im p ro v in g th e p e rso n a l fin a n c e stra te g ie s o f y o u th a n d a d u lts, re g a rd le s s o f in c o m e, a n d h e lp to c o m b a t th e ill a d v ic e o f p re d a to ry le n d e rs . O u r v isio n is to s p re a d th e ir w o rk w o rld w id e b y in c re a sin g th e a m o u n t o f fin a n c ia l c o u n se lo rs a v a ila b le to th e m ; so m e th in g th e y s a y is d e s p e ra te ly n e e d e d. O u r p a rtn e rsh ip w ill sta rt th is s p rin g w h e n C C C S D V c o m e s to H a v e rfo rd ’s c a m p u s a n d b e g in s th e firs t o f (h o p e fu lly ) m a n y c re d it c o u n se lin g w o rk sh o p s in te n d e d to h e lp th e M ic ro fin a n c e c lu b b e g in te a c h in g th e ir o w n e x tra c u rric u la r c o u rs e a n d b e c o m e fin a n c ia l c o u n s e lo rs th e m se lv e s.
Who We Are / Personal Motivations
The Haverford Microfinance Club creates awareness of economic development issues on campus, participates in local community development work, and networks with likeminded institutions around the world. Jeremy Golan HC’09 and I founded this club because we wanted to take it upon ourselves to educate more of the student body about microfinance and get students involved with economic development issues. We saw a void on campus, and wanted to give those students who have a passion for economics and social justice an outlet to create social value through the use of modern business practices. We see another void in our current economy, in which many people are simply not getting the financial education they deserve, and we believe we are qualified and motivated enough to fill that void. Over the past semester we have accumulated enough interest to maintain a club membership of over 20 students and we hope to encourage more support by receiving the opportunity to carry out this project.
Haverford Financial Literacy Course
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