Financial empowerment centers are city-managed programs that offer free, professional, one-on-one financial counseling to help residents address their financial needs and plan for their financial futures. The need for such services is real — in 2016, the Federal Reserve reported that nearly half of Americans would not be able to come up with $400 in savings for an emergency expense. Cities seeking to help residents build wealth and financial security may establish financial empowerment centers to offer training and services for money management, budgeting, reducing debt, establishing and improving credit, connecting to safe and affordable banking services, and building savings.
Through financial empowerment centers, residents can access resources and support to build savings to weather financial emergencies, invest in their futures, avoid predatory financial products that can entrap them in cycles of debt, and increase their financial acumen. Implementing a financial empowerment center requires upfront investments determined by its structure, the services it delivers, and the costs of specific programs and incentives (e.g., matched savings accounts). But because these centers can be integrated into other public services — including housing and foreclosure prevention services, workforce development, prisoner reentry, benefits access, and domestic violence prevention — they can actually save cities money. Research shows that financial insecurity can strain city budgets, while people with stable finances need fewer ongoing support services.
For more resources on financial empowerment centers, see the Cities for Financial Empowerment Fund.