The Americans with Disabilities Act (ADA) states, “…the Nation’s proper goals regarding individuals with disabilities are to assure equality of opportunity, full participation, independent living, and economic self-sufficiency for such individuals…” In Illinois, people with disabilities comprise 11 percent of the population and, according to the American Community Survey (ACS), the poverty rate among working-age individuals with disabilities is 19.1 percent. Disparities in employment and participation in the workforce exist and may be due to lower educational attainment, individual and systemic barriers to employment and discrimination.
National Disability Institute (NDI), with support from the Illinois Council on Developmental Disabilities (ICDD), recognizes the importance of financial inclusion and capability and the need to empower individuals to understand and manage their finances through education and training.
Financial inclusion, according to the Center for Financial Inclusion, ACCION, “is the ability to have access to a full range of useful and affordable financial products, programs and services that meet an individual’s need to achieve financial well-being.” Financial capability is the combination of knowledge and skills to inform financial decisions and behaviors, identify opportunities to improve financial wellness and manage financial resources effectively.
As a tool to build a better financial future for people with disabilities and their families, NDI’s 10 “Financial Capability Indicators for People with Disabilities” introduce important concepts to improve financial well-being outcomes.
- Set and achieve financial goals – Goals are cornerstones of financial counseling and coaching. They motivate an individual to improve financial skills and knowledge, and actions align with the person-centered culture of the disability community.
- Improve income production – Employment is a given for many subsets of the population. Unfortunately, significant barriers to employment and to working to one’s full potential exist. Utilize individual budgets and financial goals to ensure financial needs are met by earned income.
- Access and manage public benefits and work support programs – Use of public benefits can create a safety net. Connect job seekers and workers to benefit planners to ensure they are maximizing their use of work incentives.
- Manage affordable health coverage – Access to healthcare can be critical in maintaining financial capability and protects against medical debt. Support individuals in making informed decisions regarding healthcare choices and the benefits of blending public and private health coverage.
- Manage expenses and debts – Managing monthly expenses and debt allows an individual to identify current expenses and debt and to develop a plan for meeting those costs. As part of personal budgets, include information and tools to manage monthly expenses and pay down debts, which include debt management programs and services.
- Manage credit – Credit is an indicator of responsibility in the workplace and in the housing and loan markets. Connect individuals to programs that report rent payments to credit bureaus to establish credit.
- Select and manage financial products and services – Banks, credit unions and pre-paid card services offer a range of affordable financial services to meet the needs of people at all income levels. Receipt of earnings or public benefits prompt review of banking and pre-paid card services to choose the most affordable financial service.
- Plan and save for the future – A range of mainstream and protected savings opportunities exist, providing opportunities for individuals, regardless of benefit status, to save for their future. Employment and independent living plans and services include the expectation that individuals will save for their future needs.
- Increase financial knowledge to make informed decisions about financial wellness – Like all Americans, a lack of financial literacy creates knowledge barriers to accessing services. Financial education is a required component of transition services and employment programs.
- Identify and connect with trusted sources for advice – Of working-age adults with disabilities, 36 percent are not taught how to manage their finances by parents or guardians and were not offered financial education from a school or employer. Circles of support and other tools used to identify supports include who to turn to for financial information.
Understanding and managing finances are essential for all, but especially for people with disabilities. Increased financial knowledge and skills can lead to greater financial capability, which is vital in improving financial wellness and creating a path to a better quality of life.
Please visit the Financial Inclusion 101 webinar archive to learn more.