Church Ministers to a Congregation’s Financial Life

People know they can turn to the church for spiritual teaching, for guidance as they travel through the dark valleys of life. Now some are turning to the church for answers to that most perplexing of worldly concerns: finances.

“People need to know about managing finances,” said the Rev. William S. Epps, pastor of Second Baptist Church. “Financial literacy is one aspect of the program we have here at Second Baptist that helps people become well-balanced individuals and make a contribution to society.”

Epps’ church is one of a growing number that offer financial literacy classes designed to educate members about money matters.

The classes grow from a need that church leaders have seen among some members. Too often, people go about their daily lives without fully understanding financial matters -- and they pay dearly for their lack of knowledge, said Amelia Way, organizer of a financial literacy class that began Saturday at Second Baptist. The classes allow church members to get what many have never had: a chance to fully understand money matters from professionals in a no-pressure setting.

“If I had had a program like this, I would have done things a whole lot differently,” Way said.

Helping people demystify all things financial is a logical extension of the work of churches like Second Baptist. The church, on Griffith Avenue north of Adams Boulevard, runs homeless shelters for women and children, owns more than 100 units of housing, and has helped develop an additional 300 units.

The church’s ultimate goal of “equipping people to become homeowners so that they can manage their lives,” is complicated by a shortage of affordable housing, said Epps, who is a member of the city’s Affordable Housing Commission. In a tight housing market like that in Southern California, where the median cost of a home is $338,000, it is a distant dream for many.

In the city of Los Angeles, the rate of homeownership is 39%, second only to New York as the lowest in the nation. And nationwide, African Americans continue to own at a lower rate than others: about 47% compared with 73% for whites.

The Rev. Norman S. Johnson Sr., executive director of the Southern Christian Leadership Conference of Los Angeles, said lack of information -- combined with scams and predatory loans that target communities of color -- threaten the gains earned by years of civil rights work.

“[People] are paying better than half their salaries to service debt and they do not have much to show for it,” Johnson said. “The assumption that everyone knows how this system works is fallacious. People do not understand. What they do understand is they have bills to pay and children need shoes, and they have to have an auto.”

The classes at Second Baptist will be taught by professionals such as Wiley S. Sturns, regional vice president of the National Assn. of Real Estate Brokers.

A person’s credit problems can begin long before he or she is able to vote or legally drink.

“We know that a lot of the financial institutions send pre-approved credit cards to high school kids, college kids,” Sturns said. “They are not aware when they start being late or not paying, this will follow them eight to 10 years and it’s going to affect their lives.”

Knowing how credit scores are calculated would help some acquire better loans. Each time a consumer’s credit report is checked lowers the score, Sturns said. Someone who is shopping for a car, for example, and visits several dealers before deciding could be penalized with a higher interest rate if salesmen pull credit reports.

Sturns will also make the case that some renters would be better off owning even if it means living for a while in a neighborhood that is not their first choice.

“The greatest asset you can have is homeownership,” said Sturns, a real estate broker with First Security Investment Co. in Leimert Park. “You can ... parlay homeownership into other wealth-building activities.”

People who learn about the assistance available and programs for home buyers may realize that ownership is possible, said Allen Jackson, branch manager and vice president of Bristol Home Loans.

“Most people have the misconception that they need to have ... $30,000 or $40,000 when in actuality in some cases you can get a person into a property with as little as $500 or, if they’re on an FHA loan, they can get in with no money,” said Jackson, who will conduct a session at Second Baptist.

Classes can also offer the kind of information needed to help members protect their assets.

Keith E. Brown Sr., of Mt. Tabor Missionary Baptist Church, which also offers classes on financial literacy, recalled how one church member lost her home of 33 years after she refinanced her home to make earthquake repairs. She actually had two loans totaling more than her monthly income.

“There was no way she could pay it,” said Brown, a deacon and church administrator. “I don’t even know how they approved a loan like that.”

By the time the woman brought the problem to the church, it was too late, Brown said. The woman now rents an apartment with her Social Security payment and is on a waiting list for federally subsidized housing. Another older church member lost her home after someone persuaded her to sign over the property. That member is now in a nursing home.

The classes can help adults by stressing savings and long-term goals over excessive shopping for clothes, cars and the latest technological gadgets, Epps said.

Some young adults find that their credit is ruined even before they exercise it. In some struggling households, parents put utility bills in the names of their children, Way said. As adults, those individuals find themselves indebted -- and often have no idea how to correct the problem.

Way, who has encountered her own problems with debt is on her way to clearing her credit and her path to homeownership.

“I’m learning how to budget better,” she said. “It’s OK to [dress] nice, but not when you have no money in the bank”

The classes at Second Baptist Church, which are co-sponsored by Citibank and Los Angeles Neighborhood Housing Services, are free to members as well as nonmembers. Each Saturday session is each dedicated to a different topic -- all related to good management and homeownership.

“If you’re going to obtain the American dream you need to be aware of things that affect your credit,” Sturns said.