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Adalberto Jaimes paul mccartney us tour offers his clients personalized financial planning. Like private bankers and wealth managers, he helps people set their financial priorities and goals. He picks up the phone to negotiate deals and helps them take care of the paperwork.
Instead of working in a sleek Midtown bank, however, Jaimes' office is a cubicle in the back of the Northern Manhattan Improvement paul mccartney us tour Corporation in Washington Heights, where people can get services ranging from legal representation in eviction cases to asthma management. Jaimes, a native of Colombia, helps clients facing arrears in their rent, mountains of credit card debt, and credit scores paul mccartney us tour that prevent them from renting apartments or getting jobs.
His services paul mccartney us tour are free to clients. Jaimes is employed by Neighborhood Trust , a nonprofit that provides financial advice to low-income New Yorkers. Neighborhood Trust is the largest operator of New York City's Financial Empowerment Centers , which were established in June, 2008. Jonathan paul mccartney us tour Mintz, the commissioner of the Department of Consumer Affairs, said the centers were established to "take a look at the whole picture. How do you walk out of here not just literally with reduced debt, which is great, of course, but with your arms around your finances?"
Currently there are more than 30 centers lodged in neighborhood organizations paul mccartney us tour around the city, offering counseling in multiple languages. paul mccartney us tour Bloomberg Philanthropies , the mayor's personal charity, is now providing grants to Living Cities' Cities for Financial Empowerment Fund to replicate and customize the model in Philadelphia, Nashville, Denver, San Antonio and Lansing, Mich., — places that won out over 45 others for these grants. The first centers will open in March.
If the rich need personalized financial advice and hands-on-help, poor people need it more. When there is no cushion, one small mistake can be catastrophic — if you rely on a car to get to work, for example, missing a car payment can result in the loss of a job.
Personalized advice, moreover, adds more value for the poor. Wealthy people could manage their own money if they chose to spend the time, and tend to have the clout and confidence to negotiate paul mccartney us tour favorable terms. But most poor people have no idea about their options. They may not be aware that they can get financial aid for college or tax credits for child care. "I didn't know what was on my credit card statement," said Ruben Felix, a tailor who has been Jaimes' client since September, 2011. "Only the due date."
"As consumers, people have rights — but they don't know about them," said Iran Lisser, a Financial Empowerment Center counselor who works at Staten Island Legal Services in St. George and El Centro del Inmigrante in Port Richmond. Lisser's clients living on Social Security, veterans' and other federal benefits are relieved to find out that creditors cannot legally freeze or garnish that income. While many clients come in asking paul mccartney us tour her to get them a lower interest rate on a credit card, they usually do not know that they could also reduce the fees companies pile on, and the amount of debt itself. paul mccartney us tour "Anything is negotiable," she said. "Anything. It's all about negotiating."
Jaimes and Lisser, who was born in Honduras, said that clients are often people who were financially responsible until losing a job or suffering an illness. paul mccartney us tour Some have compounded their problems by resorting to commercial debt settlement companies, which charge an upfront fee and then tell clients to play chicken by not talking to or paying creditors. "One or two percent of the time it's effective," said Mintz. "But overwhelmingly, creditors sue them, seize their accounts and destroy their credit rating."
Jaimes said that most of his clients come to their first meeting with a stack of collection letters paul mccartney us tour — unopened. "Can I open these envelopes for you? We have to deal with them,"' Jaimes tells them. At the first meeting, he tries to get a complete picture of income, debts and expenses, and draws up a budget, suggesting paul mccartney us tour where to cut costs. "Going out, clothing, taxis. People take a lot of taxis — I don't know why. People spend a lot of money on lunch. I show them what I do — I bring my lunch," he said, reaching down next to his desk and pulling out a bag. "Maybe this month they will bring lunch to work two times, next month three times, then four. That's how you start a new behavior — and the goal is to change behavior."
Lisser begins by addressing clients' stress, step by step: "You will feel relieved after you settle the first one," she says. She leads them through opening the debt notices, calling the collections agencies and beginning negotiations. When the client takes over making paul mccartney us tour the calls, she will coach by scribbling notes.
James Blow, a Staten Island firefighter, and his wife, India, came to see Lisser about 18 months ago because they needed to save. They were falling behind on their utility paul mccartney us tour bills and in arrears paul mccartney us tour on their mortgage. The couple had been rejected for a Mortgage Assistance Program loan — a zero interest loan from the Center for New York City Neighborhoods . One requirement was to demonstrate financial responsibility, and they had no savings.
paul mccartney us tour Lisser began by asking them to write down everything they bought for a month. paul mccartney us tour "These were eye-opening exercises," said James. They realized they could cut spending on clothing for their two children and on groceries — India loves to cook. They stopped paul mccartney us tour going to Starbucks. Lisser pointed out that by paying the monthly minimum on their credit cards they were piling up fees. She showed them how to call the companies and to pay off the bills and close the accounts.
The Blows separated James's paycheck into three different bank accounts: money for bills, savings and household expenses now sit in three different pots. "It separates paul mccartney us tour it in my mind and helps us to see this is what we have to work with," India said. They have so far saved $10,000 – and got their MAP loan.
Results not typical, as the ads warn. Most of the centers paul mccartney us tour s victories are more modest. Their counselors have so far worked with about 20,000 clients, most in multiple visits. The median income of their clients is $13,200, and the median debt they walk in with is $10,162. Return clients (those who come in more than once) enrolled in a debt plan reduced their debt by an average of $730. And the average return client enrolled paul mccartney us tour in a savings plan increased savings by $531.
These numbers, of course, chart the program's impact on successful clients — there is no real study of their effectiveness paul mccartney us tour that takes into account clients who don't improve. paul mccartney us tour But there is evidence from similar programs of the value of personalized, hands-on counseling.
One interesting paul mccartney us tour study comes from an unusual source: the tax prep firm H R Block. The study had tax preparers fill out a FAFSA college financial aid form for interested clients — the information is largely the same required for tax forms. The preparers also calculated how much aid the student could get, and provided figures for tuition costs at nearby colleges. Triple the number of people applied for financial aid as in the control group that got the same personalized information but was handed a FAFSA form to fill out at home. Those who had the expert do the form were also more likely to go to college and stay in college: 29 percent more likely to attend for two consecutive years. The information-only group fared the same as a third group that was merely given some general brochures about the importance of college.
Other studies have shown the utility of hands-on help.  A group of behavioral economists tested (pdf, p 138) this at workshops in Chicago designed to help low-income people paul mccartney us tour dependent on check-cashers to open bank accounts. Among people given a referral letter to a bank and instructions on how to open an account, 90 percent had thought they would follow through — but only 50 percent did. But when a bank representative attended the workshop and helped people fill out the forms, uptake rose.
The power of hands-on help reveals how seemingly paul mccartney us tour trivial factors can have a big impact:  denial, plain old forgetting, fear of forms.  "People say,  'we simplified – it's a three-page form,'" said Sendhil Mullainathan, a Harvard behavioral economist. "But a three-page form is complicated. Procrastination follows from complexity."
Coaching helps with all of these.  It can also build confidence among people who are routinely trampled by financial paul mccartney us tour institutions. For a startling illustration of the importance of confidence, look at this small study done in a soup kitchen in Trenton, N.J. The idea was to increase paul mccartney us tour the rate at which people filed taxes (and got the large rebates they were entitled to under the Earned Income Tax Credit.) Soup kitchen paul mccartney us tour patrons were asked to spend a few minutes either describing an experience that had made them feel successful and proud, or describing what they ate in a typical day. On the way out of the kitchen, each participant was offered a brochure about the EITC. Of those who talked about their eating habits, 36 percent took a brochure. But 79 percent of those who talked about a successful experience took one.
Ideally, the coach can help clients set up systems that keep them on track: automatic savings, automatic bill payment, automatic reminders by text. "Distress is an economic state but also a psychological paul mccartney us tour state," said Mullainathan. "The remedies have to address both."
The centers counselors can't help everyone — Jaimes said he has some fixed-income clients paul mccartney us tour who simply can't pay anything, and all he can do is write cease-and-desist letters to collection agencies. But both Jaimes and Lisser said that they also have many clients who become, well, financially empowered. Over the course of five