Building a Savings Culture in TEXAS: Dreams Can Come True
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Transcript of Building a Savings Culture in TEXAS: Dreams Can Come True
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Presented by Larry Garcia
2011 Raise Texas SummitFederal Reserve Bank of Dallas
Nov 1, 2011, Dallas, TXBuilding a Savings Culture in TEXAS:
Dreams Can Come TrueEl Paso Affordable Housing CUSO, 6801 Viscount Blvd, El Paso, TX 79925
[email protected] phone 915-838-9608 fax 915-838-8085
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SURVEY Chose Questions that would:
• Determine Savings Behaviors before the Financial Education Workshop
• Determine if Financial Education Workshop addresses Savings Behaviors
• Determine after 6 months if Savings Behaviors were positively affected by the Financial Education Workshop
Conducted in workshops held from April 1, 2011 through Sept. 30, 2011—received approximately 400 surveys for this analysis.
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• Lack of knowledge regarding the mechanisms and techniques for healthy saving
• Perception that resources are insufficient for savings to be plausible
• Fear of/distrust for financial institutions
Results of the pre-survey represent a spectrum of savings behavior among participants: while some report healthy practices and attitudes with respect to saving, others are skeptical or uninformed of the process. Of those who do not save and/or do not use formal financial institutions, there seems to predominate a:
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These observations are demonstrated in the following…
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Percentage of participants that put money aside as savings:
Don't put money aside
Put money aside
29.17
70.83
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For those that don’t put money aside, what are the major reasons they do not?
72%
15%
9%5%
Not enough moneyLack of knowledgeLack of self controlOther
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For those that do put money aside, how do they decide the amount to save?
27%
62%
8% 3%
Have a set amount that they always put aside
Put aside what is left over after expenses
Save spontaneously (short term goals)
Other
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Frequency with which participants save money for a certain reason, but end up using it for something else:
23%
37%
31%
9%
Often Sometimes RarelyNever
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70%
30%
Had such an expense
Did not have such an expense
Months in the past year that participants had an unexpected expense over $200:
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Which of the following were factors in this situation?
Loss
or damage
to physi
cal p
roperty
Medical o
r dental e
xpenses
Emergency
repairs on yo
ur vehicle
Something e
lse0
102030405060
11.7%
40.82%
56%
26.04%
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Which places did participants most use to save money during the last year?
Savin
gs Acco
unt
Checking A
ccount
Somewhere at
home
401(k) or 4
03(b)
With an
other indivi
dual
Stocks
Savin
gs bonds
IDA
Some plac
e else05
10152025303540
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Prevalence of checking accounts:
13%
87%
Do not have checking account
Have checking account
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For those that don’t have checking accounts, why don’t they?
Believe they don't need a checking
account38%
Don't think that they would qualify
16%
Fear/distrust of in-stitutions
12%
Lack of knowledge12%
Request rejected/legal15%
Other reason7%
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To Review
Three principle barriers to saving, as indicated in the pre-survey, are:
1. A lack of knowledge regarding the mechanisms and techniques for healthy saving
2. The perception that resources are insufficient for savings to be plausible
3. A fear of/distrust for financial institutions
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A lack of knowledge regarding the mechanisms and techniques for healthy saving
Five Step Financial Plan1. Establish Goals2. Analyze Information3. Create a Plan4. Implement Plan5. Follow the Plan and Modify
Appropriately
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The perception that resources are insufficient for savings to be plausible
Needs VS. Wants
Establish Goals
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A fear of/distrust for financial institutions
Selecting a Financial Institution
• Previous negative experience with financial institution
• No experience by parents with financial institutions• Feel “out of place” in financial institution
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At present, there have not been sufficient post-surveys completed to determine the
effectiveness of the Financial Education and Home Ownership Clinic.
This said, we predict with confidence that the Clinic will result successful in addressing the
barriers to saving that have been discussed in this presentation.
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Demographics:
Approximately 400 surveys
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Size of household:
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Language most spoken at home:
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Gender of participant:
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Average age of participant: 38.2
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Is participant Hispanic or Latino