A couple of months ago, we (the MagnifyMoney team) watched the moving HBO documentary Paycheck to Paycheck: The Life and Times of Katrina Gilbert. The film follows a struggling single mother as she tries to better her financial situation, only to be constantly knocked down by circumstances largely outside of her control.
In a sea of financial battles, Katrina had one safe harbor: The Chambliss Center for Children.
The Chambliss Center, located in Chattanooga, Tennessee, offers 24/7 extended childcare and early childhood education for children ranging in age from six weeks to 12 years old. Parents are charged a fee on a sliding scale at a substantially reduced rate compared to the typical cost of childcare. Chambliss also provides a residential program for children who have been removed from their homes and are in custody of the State of Tennessee. Some children are placed in foster care, while others live onsite at the Chambliss Center.
Inspired by Katrina’s story, we contacted the Chambliss Center to see if we could help.
Last week, we headed down to Chattanooga to host financial seminars and provide one-on-one sessions to speak with both the Chambliss Center staff and parents who, like Katrina, often deal with immense pressure to make ends meet each month and dig out of debt.
We drove up to the Chambliss Center and were greeted by the sounds of children laughing and gleefully yelling on one of the Center’s many playgrounds. Chambliss’ Vice President of Development and Administration welcomed us with a grand tour of the Center’s extensive facilities including nurseries, classrooms, basketball courts, and a swimming pool. Nearly two, hug-filled, hours later, we settled into a conference room and prepared to give our two lunch seminars for the Chambliss staff.
MagnifyMoney co-founder, Nick, spent an hour overviewing our A,B,C’s and the foundation for financial health.
A – Ask the tough questions (How much debt do I have? Am I consistently going overdraft? Do I have anything in collections? What’s impacting my credit score?)
B – Break up with your bank (Don’t stay in a toxic relationship with a bank, switch to an Internet-only bank or a credit union)
C – Commit to a long-term plan
The attentive participants asked questions about credit scores, balance transfers, overdraft fees and handling their debt.
Nick reiterated over-and-over that one needn’t be rich in order to have a strong credit score; it’s based on responsibility. Prompt by this comment, one listener raised her hand and commented about her shock that her credit score sat in the high 700s even though she had debt.
“Do you pay your bills on time?” asked Nick
“Yes,” she responded.
“Do you max out your cards?” he followed up
“Not anymore,” she said with a half-hearted laugh.
“Well, the credit bureaus see you as responsible. It isn’t about how much money you have, it’s about how responsible you act with your credit,” Nick explained. “You don’t need to be rich to have a good credit score, but a good credit score can save you a lot of money.”
A short time later, the three of us sat in front of two seventeen-year-old boys from the Chambliss Center’s residential program. At the tender age of 18, these young men will age out of the foster care system and be required to live independently.
In an effort to prepare them for their eighteenth birthday, the three of us spoke with the young men basic personal finance, building credit history and why it’s imperative to stay away from predatory lending like title loans, pay day lenders and overdraft fees.
One of the young men, who will turn 18 in four months time, lobbed us question after question about handling his finances including the astute inquiry, “I once heard no credit is as bad as bad credit, is that true?” We answered his questions and gave him our business cards, asking he keep in touch and reach out about any questions when he was handling his own financial affairs.
The next two days were spent in one-on-one meetings with members of the Chambliss staff and parents.
We spent 45 minutes blocks of time sitting down with individuals and discussing their financial situations. Some were concerned with improving their credit scores while others weren’t sure about how to battle overdraft fees and most wondered if they could dig themselves out of debt. We kept our talks conversational and educational before exploring if we could help each individual save some money. We consistently had people tell us they wanted to as much as they could about money to keep their children from repeating their mistakes. One woman went so far as to say, “In my family, bad money habits have been passed down from generation to generation. It will end with me.”
In a few cases, we were able to make a sizable dent in people’s debt and help them learn how to handle future emergencies without turning to title loans or pay day lenders. But those stories will be shared later this week.
The Chambliss Center stands as a pillar of hope for men and women struggling to raise their children while they need to work, or go back to school and often times serve as the single parent. We felt fortunate to speak with their inspiring staff and the parents who work so diligently to ensure their children are provided with excellent care and education.