How Do You Manage Your Money When You’re Homeless?
They may be homeless, but they don’t all have to be hopeless.
You see them huddled in clusters in freeway underpasses and sleeping on park benches or sidewalks. They stand in food lines of churches and food banks, eagerly awaiting that week’s pantry pull.
They live in homeless shelters, tents, and shanty towns, and stow their meager possessions in shopping carts or in bags slung across their backs.
According to the Department of Housing and Urban Development, there are over 564,000 transient people living in America.
And as someone who has volunteered with organizations that feed the homeless – such as Food Not Bombs and the West L.A. Burrito Project – I oftentimes wonder what happens to them after a night chatting it up and serving them food.
The homeless situation here in Los Angeles is pretty severe. There are about 47,000 homeless people, and the population has spiked 11 percent in the last year.
One can imagine that it’s difficult enough to eke out an existence when you’re living day-to-day. Your greatest concerns are putting food in your stomach and having a roof over your head.
When a homeless person is ready to transition into society and open a bank account, the decks are often stacked against them – they may have bad credit or have resorted to payday loans. So what about managing any money that they have?
“The prioritization on basic needs and basic daily survival becomes the most important aspect of their lives,” explains Christine Achre, CEO of the Primo Center for Women and Children in Chicago.
“Long-term future planning that is important in becoming more financially literate feels out-of-reach. It’s just something they cannot relate to.”
Because the homeless population is so focused on daily survival, any money they come across is spent right away. “When they receive their limited funds, rather than saving those funds to sustain them in the future, they are only focused on the moment. They frequently spend their money on things for their children and themselves,” says Achre.
That said, what resources are available to help the homeless be more financially literate? Here are a few programs available for homeless to increase their financial literacy:
Money Management Programs
Some homeless shelters offer money management programs and workshops. These programs are intended to help the homeless better understand their money. They educate the homeless on financial basics such as saving, budgeting, and understanding credit.
“BUILDING FROM THESE SMALL SUCCESSES WILL THEN ALLOW THEM TO GAIN MORE CONFIDENCE…’
Some even have an agreement with a financial institution. In these cases, the homeless resident gives the money to a case worker or authorized shelter employee. They then put that money into a special account. That said, Emily Creecy, a former case manager in Los Angeles County, recommends that you don’t give money to a money management program that accepts fees.
Time banks are essentially collectives of people who barter their services. They’re geographically based, and services are traded for time. No money is involved with a time bank. The National Alliance to End Homelessness suggests this as a way that homeless people can learn how to understand their strengths and the value they bring to society. Even learning to bank hours can help them with basic money management.
How You Can Help
If you want to get involved, there are plenty of ways you can help the homeless with their money management. For starters, use VolunteerMatch or Idealist to look up organizations in your area that help transient populations and that you might like to help.
Some of these organizations may already have financial literacy programs in place. If not, see if you can work with them on developing one. If you’re financially savvy, you could teach a workshop on budgeting basics or about how credit works.
While resources for the homeless are available, Achre recommends a financial literacy program that focuses on actionable advice and short-term solutions. “Building from these small successes will then allow them to gain more confidence and better embrace the development of these long-term financial goals, which are necessary to becoming truly financially literate.”