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