Opportunities for Asset Building with Matched Savings Accounts
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Transcript of Opportunities for Asset Building with Matched Savings Accounts
Opportunities for Asset Building with Matched Savings Accounts
Peter Stahl, Director of Economic Development
Community Enterprises Corporation (CEC)
A subsidiary of
Collaborative Support Programs of New Jersey (CSPNJ)
ECONOMIC DEVELOPMENTMISSION
Our economic development mission is to promote:self-determination, self-sufficiency, community integration and personal responsibility
By offering products and services that increase a person’s financial stability and security through financial education, personal assets and employment.
ECONOMIC DEVELOPMENT VISION
Poverty is one of the key barriers to recovery and we seek to promote systems transformation that promotes asset building and economic prosperity.
Given access to economic opportunities, people in recovery with psychiatric disabilities living in poverty will achieve financial stability, security and independence through increasing financial knowledge and net worth.
OVERVIEW:THE PEOPLE WE SERVE
People living with psychiatric disabilities and/or special needs
Have been financially devastated Have little or no earned income Regulated to living on federal and state
assistance Have little or no access to banking, financial
services Moving into employment but without the
knowledge and experience in managing their finances
OVERVIEW: SYNOPSIS An overwhelming number of people living with
psychiatric disabilities and/or special needs live in poverty
Poverty is a barrier to the individuals wellness and recovery journey and to community integration
A way to overcome poverty is with asset building strategies that include education, employment, credit, savings, investment
It is assets, not income, that allow people to move out of poverty and achieve economic independence. Source: CFED (Corporation for Enterprise Development)
People living in poverty have the ability to save with the right incentives
SAVINGS INCENTIVE INITIATIVE PROGRAM
Rainy Day Savings: On Demand with .1:1 match for emergencies, car repair, medical bills
Small Purchase Savings: 6 months and a .5:1 match up to $600 for a computer, furniture etc.
Consumer Savings Club: 1 year with a 1:1 match up to $1,000 for a car, security deposit etc.
Tax Liability Savings: Tax Year till April 15 with a 1;1 or .25:1 match; designed for the 1099 worker
Individual Development Account (IDA): 3-5 years with a 2.5:1 match for a home up to $2,000; and a 4:1match for business or education up to $1,000
SAVINGS INCENTIVE INITIATIVE STATISTICS (OTHER THAN IDA)
Total participants 97 Total savings $40,189 Average savings per participant $414 Total match $24,770 Average match per participant $255
14 purchased cars 5 purchased computers 4 purchased wardrobes 4 purchased quality furniture 3 each: car insurance, credit card and medical bill 2 each: television, security deposit 1 each: weight control program and funeral
arrangement
SAVINGS INCENTIVE INITIATIVE STATISTICS (IDA)
Total number of participants 25 Participants finishing the program 19 Total savings $55,316 AFI match $73,059 CSPNJ match $25,579 Other match $17,718 Total invested in assets $161,968 Asset purchase price $544,885 Asset market value $804,435
3 Homes 9 Degrees and certification 7 Business
KEY ELEMENTS OF MATCHED SAVINGS PROGRAM
Engaging individuals through:Financial Literacy Education and TrainingMatched Savings IncentivesSavings GoalsCoaching for Personal Financial Growth and Asset Accumulation
Engaging other organizations through:Partnerships and coalitionsAdvertisements and Marketing Material
ENGAGEMENT CHALLENGES
Overcoming misinformation I will lose my benefits Asset limits don’t allow me I can’t afford to save
Overcoming fear The economy is bad I can’t afford or maintain my own home
Overcoming barriers I owe money and can’t afford to pay My credit is bad
LESSONS LEARNEDWE MUST:
Teach responsibility and stewardship for money Address all aspects of the persons finances to
increase net worth, especially credit and credit card debt.
Encourage a savings component to every budget Start with small saver accounts for things they
want to save toward Build savings skills toward an investment in an
Individual Development Account Program Limit goals to assets and improvement of quality
of life, not debt repayment Use micro loans instead of benevolence, transition
payments to a savings account Address good citizenship and asset opportunities
by filing taxes Incorporate financial literacy education and
training into wellness and recovery curriculum
ACCESS AND OPPORTUNITY
Resources for matched savings programs: Collaborative Support Programs of NJ
www.cspnj.org CFED www.cfed.org Assets for Independence Resource Center (AFI)
http://www.idaresources.org
Resources for financial education: Federal Deposit Insurance Corporation (FDIC)
www.fdic.gov/consumers/consumer/moneysmart National Disability Institute Real Economic Impact
Tour http://reitour.financialsoccer.com/ Federal Reserve Bank
http://www.dallasfed.org/ca/wealth/index.cfm
FUTURE FOCUS OF CSPNJ AND CEC ORGANIZATIONAL INNOVATIONS
Extending the initiative statewide to include a coalition of mental health organizations: Creation of the “Access Financial Literacy
Education Association” Proposed Low Income Community
Development Credit Union
Resources National Federation of Community
Development Credit Unions www.cdcu.coop National Credit Union Administration
http://www.ncua.gov