New & Next: Changing the Money Conversation through Collaboration

Denver has consistently ranked in the top 10 growing cities in the U.S. for nearly a decade. According to the U.S. Census Bureau, the population rose by 101,000 between August 2014 and July 2015. Naturally, this growth brings some positive impacts such as new businesses, new jobs and new investment into the Denver community. With a strengthening economy that has seen unemployment drop to 3.5 percent as of Dec. 2015, Denver is consistently ranked as one of the top economies in the United States.  

While these numbers signal good things for the economies of Denver and the surrounding Metro Area, there is still a population struggling to make a living, in part because the current rate of growth has priced them out of housing. In the most basic terms, some people that work in Denver cannot afford to live there.

At mpowered, we believe that another contributing factor leading to the struggle is the lack of solid money management skills among average citizens, regardless of education or income. In 2013, a Gallup poll suggested that two thirds of Americans don't use a budget to manage their money. Compare that with the fact that nearly 70 percent of American households have credit cards, and the potential for trouble is evident. This is where mpowered strives to change the conversation.

Founded in 2001, mpowered exists to empower individuals and families to think, act and feel differently about their money so that they make better financial decisions and create a thriving, self-sufficient lifestyle. Our 12 coaches provide unlimited one-on-one financial coaching sessions throughout the Denver metro area, with 90 percent of our clients falling into the low- to moderate-income category.

A good portion of the families we serve represent the population of Denver and Colorado that find themselves unable to participate meaningfully in the existing financial system due to their current circumstances. Credit-related issues underlie a lot of their financial hardship, stemming from a misunderstanding of what credit is, how to use credit, or youthful exuberance manifested in spending that must be dealt with later on when the creditors come knocking. The biggest challenge facing these individuals and families isn't just one single issue, but rather these issues' ability to start a vicious cycle for these families and individuals.

The cycle can go a little something like this: Financial stress leads to emotional stress leads to physical sickness leads to taking sick days at work leads to potentially losing the job leads to no money leads to can't pay pills leads to bad credit leads to using high-interest oe predatory financial products leads to more debt leads to lifetime of digging out and potential bankruptcy leads to bad credit leads to less access to traditional banking products leads to all the money from a new job going to past debts leads to no economic mobility leads to limited asset building leads to financial stress and the cycle repeats itself.

In some cases, this cycle leads to individuals being unable to get a bank account due to their credit or being underbanked by their current financial institution. According to CFED's 2015 Assets and Opportunities Scorecard, 9 percent of Denver's population is unbanked, while another 18.8 percent is underbanked.

Luckily for mpowered, we are not alone in our quest to fight against this cycle and enlighten the Metro Area about the virtues of sound money management. mpowered has been lucky enough over the last three years to collaborate with various nonprofit agencies by integrating our financial coaching services into their programs. Through mpowered's work at the Financial Empowerment Centers, a program of the Denver Office of Strategic partnerships for the past three years, funded by Bloomberg Phillanthropies and now housed in the newly formed Denver Office of Financial Empowerment, debt has been reduced by over $2 million and led to over $500,000 in new savings. This is in addition to the over $30 million that mpowered has helped reduce since 2001.

What makes the model so effective is that mpowered's coaches are truly integrated into the sites where they meet with clients. This amounts to true collaboration that leverages existing resources to "meet clients where they are," both figuratively and literally. Financial coaching is centered on the clients and the goals and action plans they develop to achieve financial wellness are as unique as they are. In some ways, financial coaching is innovative in itself simply by allowing the clients the ability to define what success is for them instead of dictating what financial wellness should look like, or what financial products they should use.

Combine that with strong partnerships in the metro area with organizations in the government, nonprofit and private sectors and mpowered has been able to cross barriers and break down personal financial walls with clients regardless of income, demographics or geography. We at mpowered considers it a shining example of how a nonprofit can grow and expand its reach by leaning on its partners through mutually beneficial collaboration and seamless integration. The result is a valuable experience that anyone in Denver can take to the bank.

Benjamin Weeda is business development director at mpowered.