And if they do go back to their biological family, it can be just as detrimental. “Those are the people they had to get away from in the first place,” says Eddye. “A lot of times they take advantage of you, and then you're also relying on their financial choices instead of learning how to manage money on your own.”Also, the lack of a bank account puts kids' savings at risk. “I know one girl who's a single mom, and she kept her money in a shoebox under the bed,” says Eddye. “She was robbed and basically had to start all over.” Eddye says that she knows quite a few people who stash money in shoeboxes and sock drawers because they don't have a bank account. So why isn't more being done to get kids ready to live on their own? Two reasons why foster kids aren't taught personal finance skills There are a couple of reasons this problem occurs. First, young people in foster care don't get much hands-on experience with money. “Foster parents are encouraged to give kids an allowance,” says Christine. “But the kids tell us that rarely happens.” That means that many of them enter the real world without any experience earning or saving money. Second, foster kids don't get much of a personal finance education. They don't have parents to show them how a checking account works or to teach them about the importance of saving. And it's difficult for kids in foster care to open and maintain a bank account when they're moving from place to place, with different guardians and different rules. And Christine says that “the last thing on a social worker's mind is a kid's personal finance education and opening a savings account.” There are just too many bigger, more pressing issues that social workers have to deal with.
So what can be done to give foster kids a solid personal finance foundation?Opportunity Passport bridges the gap Eddye's story isn't that of the typical kid aging out of the system. After she turned 18, her caseworker told her about a program called Opportunity Passport that would match every dollar she saved, up to $1,000 per year. All she had to do was complete some personal finance classes. “The classes didn't seem like a huge thing,” says Eddye. “But when I learned about the match, I thought, 'OK, I'm game.'” Eddye used matched funds to purchase a car and a laptop. She's also used her savings to pay for her Certified Nursing Assistant and Emergency Medical Technician licenses. The program has three main benefits for participants: First, the program gives foster kids experience in handling money. In a classroom, personal finance concepts are theoretical. But when there's real money in their hands, kids can better understand why it's important to make good financial decisions. “I knew what a budget was, but I thought it didn't pertain to me because I never had a large amount of money,” says Eddye. “But now, I see why it's important to track my spending. Without that, I would probably be in a lot of debt. My budget is my rock.” Her success has also made her feel more capable and confident: “I've been comfortable keeping a budget for three years, and I'm really proud of that.” Second, the program gives kids incentive to save. Like Eddye, many kids are initially drawn to the program's savings match. It's the catalyst to start saving money and it motivates kids to stick with it, resulting in a higher savings balance. And money in the bank means one emergency won't be a huge setback. “[When I bought my car] I didn't think about costs of maintenance,” says Eddye. “But the reality is that cars break down. I've learned the hard way that you need that cushion.” Third, the program provides education and support. Kids learn how to avoid debt, manage a bank account, and keep a budget, which are critical skills when you're on your own. Although Eddye initially felt overwhelmed and intimidated, she says, “Now I'm not afraid to ask questions and dig in and do the research,” she says. So how does the program work?
How Opportunity Passport gives kids a leg upOpportunity Passport, launched by the Jim Casey Youth Opportunities Initiative, provides personal finance classes for young people who were in foster care after the age of 14.