Throughout America, an alarming number of households continue to live on the financial edge. In addition to low-income earners, people with moderate incomes also are struggling to juggle the rising costs of living. And when families cannot transfer assets to the next generation, the economic gap in their communities widens as people become trapped in poverty.

In response, some cities are using financial education to help improve residents' economic conditions. Phoenix, for example, began a Financial Education Program in 2004 based on the experiences of city caseworkers who identified that families are more likely to become self-sufficient when they learn how to budget, set goals, use credit wisely, maintain deposit accounts and develop assets.

Despite low attendance during the first pilot program, by 2005, all classes were full, and 100 percent of the 762 participants said they increased their ability to use credit wisely, budget and save money, claim tax benefits and prepare for home ownership.

As part of the Cities Helping Families Build Assets initiative hosted by the Washington-based National League of Cities, several cities recently traveled to Phoenix to learn about its Financial Education Program. Phoenix identified five ways to ensure high participation and results.

  1. Form community partnerships

    Phoenix relies heavily on financial institutions and community agencies that have money management expertise, a commitment to serving families without deposit accounts and credibility among local residents.

  2. Aim for a high return

    After weighing the program's potential outcomes against those of existing programs, city staff found a higher return on efforts, such as the Earned Income Tax Credit Campaign, that help residents build assets. The new program was created by shifting priorities and job duties, which did not require additional funding.

  3. Know the audience

    To promote the program, a trusted voice in the community may be more effective than glossy brochures or official spokespersons at city hall. In some communities, the support of a local pastor and block watch captain can be effective. Concepts should be easy to grasp and matched to participants' needs. Information also should be simple, concise and presented in a way the participants can understand.

  4. Provide incentives for attendance

    Although financial information is valued, it often does not offset the competing demands and busy lives of hard-working families. The Phoenix program provides immediate incentives to attract participation, including free meals, no-fee savings accounts, U.S. Savings Bonds and children's classes. The program also provides guides for how parents can talk with their children about money, financial activity books and coloring books, and information on credit, personal financial decisions and the correct way to buy a home.

  5. Focus on long-term success

    To sustain a program without depleting funds, cities should evaluate the outcomes of their programs and build community capacity. Determining and reporting the impact of the program can help build support within the community as leaders learn how to reach residents. In Phoenix, the goal is to reach more members of the community by building community capacity, not creating larger city programs.

The author is Community Initiatives Coordinator for the Phoenix Human Services Department.