Detroiters are no strangers to fluctuating economic landscapes. The city once known for its low cost of living and high homeownership rate has recently transitioned to a majority-renter city. And that shift has younger generations of Detroiters looking for financial education services to turn this trend around.
Financial education, sometimes referred to as financial literacy, is the process of gaining skills to better manage your household budget, manage and pay off debts, and invest in your future.
Financial education has been offered in Detroit for years, but not many have taken advantage of the services.
Why is getting financial education important for Detroiters?
According to 2021 Census data, the median household income in Detroit is $32,498 a year, more than $23,000 lower than the metropolitan area median income (AMI).
The rental listing site Rentcafe puts Detroit’s housing costs at 30 percent higher than the state average. This means that the average Detroiter is spending more money on housing than most people in the state, with significantly lower monthly income.
A Detroit Future City report found that over half of people in the city are cost-burdened. A household is considered cost burdened if they spend more than 30% of their income on housing costs.
Gail Perry Mason is founder and director of Money Matters for Youth. She says living in poverty can become self-perpetuating, because people miss out on opportunities that wealth can provide.
“ And we need opportunities to have the credit to buy the home. You need opportunities to have a down payment. And so … the only way we're going to do it is we come together and share resources and learn about the down payment programs and learn about so many different programs out here. It needs to be in every household and that's going to come through legacy and generational wealth.”
Jhalisha Foster is a realtor at Fathom Realty. She urges her clients to talk to mortgage professionals early in their financial education journey to ensure a smoother path forward in the process.
“Mortgage professionals can put them in a position where, you know, even if you're looking to purchase, let's just say 2023, 2024. Talking to a mortgage professional even right now will help them be in position to do it properly.”
Where can Detroiters get financial education services?
There are organizations across Detroit and Wayne County that offer free financial education courses to folks of all ages.
Wayne Metropolitan Community Action Agency offers financial counseling to individuals and families through their Empowerment Center. Wayne Metro also offers financial guidance for folks specifically looking to start on the homeownership journey through their HOST program. This program connects you with a HUD-certified housing coach that will help you map out your best path forward in preparing to become a first-time home buyer.
Carlos Santiago is a financial manager for the Wayne Metro Financial Empowerment Center. He helps individuals and families in Detroit gain a better understanding of their finances and map out a plan forward for their future.
“As far as financial education with housing goes, it's definitely knowing when to live within your means. What we've noticed from clients is a lot of them have that idea that they need to have a certain car, they need to live in a certain neighborhood or dress a certain way. What we like to just instill in our clients is the only person that you should be really worrying about is yourself because at the end of the day, other people aren't paying your bills.”
Wayne Metro offers a monthly class on the Foundations of Wealth Building. This workshop “covers topics such as budgeting and credit, landlord-tenant rights, the entire home buying process from first thought to the closing table, mortgage intervention strategies and how to navigate servicing requirements, as well as how to maintain your purchase including basic home maintenance, financial recovery, and home repair tips and techniques.”
Some other organizations offering financial education and counseling in Detroit are Central Detroit Christian, LISC Financial Opportunity Centers, Southwest Solutions, and DetroitPAL. Their information can be found in the flier below.
