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NC Saves seeks to change debt to wealth

RICH SQUARE – Knowledge is power. That was the prevailing message at the area’s very first Regional North Carolina Saves Coalition meeting, here Dec. 19.

The meeting, which was hosted by Roanoke Chowan Partners for Progress and the Northeast Asset Builders Coalition, was the first of a series of gatherings planned to help area citizens cultivate a new perspective on building wealth, not debt, by encouraging them that they can afford to save.

Under the guidance of North Carolina Treasurer Richard Moore, the state will partner with the America Saves Campaign (an initiative of the Consumer Federation of America) to implement a new non-profit organization that will be called North Carolina Saves.

The coalition, which is chaired by Moore, will be coordinated by a state-wide alliance of corporate, government and non-profit groups in an effort to create a network of resources and partner organizations that will offer financial education, counseling and support to NC residents through local community volunteers.

The initiative, which seeks to make North Carolina the first state to secure full participation from all of its counties, is based on the nationwide campaign America Saves and will include the IDA and Asset Building Collaborative of North Carolina, NC Cooperative Extension, Charlotte Saves, RBC Centura and other financial institutions, community groups and religious organizations.

&uot;We’re in a learning process,&uot; said Ellen Richardson, Director of Public Programs for the North Carolina Department of State Treasurer during her presentation.

&uot;We are walking into uncharted territory,&uot; she said. &uot;We don’t know how this works because we’ve never done this before, but we’re in this together.&uot;

According to Richardson, America Saves has approximately 20,000 enrolled Savers and 1,000 nonprofit groups, employers, financial institutions and government agencies that work at local, state, or national levels by providing leadership and offering/promoting savings services.

&uot;The idea is to assist those who desire to pay down debt, build an emergency fund, save for a home, an education or retirement through information, advice, and encouragement,&uot; said Richardson. &uot;Just a few years ago, the median net financial household assets were only $1,000 with 40 percent of households in the state having the lowest amount of assets or negative assets, causing their consumer debts to exceed their gross assets,&uot; she said.

Although the state campaign is only in its initial stages, Richardson said that plans are being made to develop committees at the regional level by recruiting volunteers and determining what roles each person/organization can play.

The regional working groups would assist local IDA and other community-based programs to expand their current services to provide low-moderate wealth citizens in the state with access to no fee savings accounts through local financial institutions.

&uot;A lot of people will receive the information one time, put the principles into practice and do okay,&uot; said Richardson, &uot;but some need additional reinforcement of follow through and encouragement.&uot;

To provide that support, motivational workshops are in line that will allow participants to sit down one-on-one with wealth coaches to determine financial goals along with a prepared list of banks and credit unions that offers no fee savings accounts that make it easier to save money.

&uot;That one-on-one personal contact and follow-up is what makes the difference between the person attending the workshop and doing nothing with the information they receive or speaking with a coach and reaching their financial goals,&uot; said Richardson.

The coalition will help identify which organizations or individuals are qualified to provide financial literacy training to participants as part of their wealth-building education, in addition to establishing pilot sites in each area to test the infrastructure and address potential problems.

&uot;Our goal is to have a statewide launch by fall of next year,&uot; said Richardson, &uot;but we have to iron out all of our idiosyncrasies at our pilot sites first.&uot;

The first pilot sites in the region are estimated for initial implementation between February and May of next year.

&uot;The pilots would help get the word out about the program and contact the regional representatives to keep them informed of what is happening at the local level,&uot; explained Richardson, who added that the sites might be a place to host workshops or perhaps even supply some of the much-needed volunteers.

Since its inception in March of 2001, Cleveland Saves, which is the largest savings campaign in the nation, 5,400 individuals have signed up for the program yielding a savings of $3.2 million collectively with the average saver putting away $100 each month, many of whom earn incomes less than $35,000 per year. Cleveland Saves has over 240 organizations, employers and unions that offer the program as a benefit to their employees and members.

&uot;Cleveland has been a tremendous success,&uot; said Richardson.

Charlotte Saves, which is another hit, holds second place in the nation and as of July, had over 1,650 people enrolled in the program with over $1 million estimated in accumulated savings.

The organization, which has been operating for the past two years, held its first fundraising luncheon on November 18, yielding a remarkable turnout of table sponsors and other major contributors to help fund the program.

The organization is one of over 50 affiliates under the national umbrella of America Saves whose participants include the Federal Reserve Board, the Comptroller of the Currency, the U.S. Securities and Exchange Commission, the U.S. Department of Labor, and the U.S. Department of Agriculture’s Cooperative Extension Program.

Nonprofit advisory committee members include AARP, Consumers Union, the National Foundation for Credit Counseling, the American Savings and Education Council, and several minority organizations with overall campaign management provided by the nonprofit Consumer Federation of America (CFA) which is a federation of some 300 consumer education, advocacy, and cooperative organizations dedicated to advancing the consumer interest.

Last year, the local coalition partnered with the Internal Revenue Service to educate volunteers on preparing income taxes for area residents in an effort to ensure that low-mid income families didn’t miss out on Earned Income Tax Credits.

&uot;Even though we got a late start last year,&uot; said Patricia Ferguson Vice Chair of Roanoke Chowan Partners for Progress, &uot;approximately $500,000 worth of EITC funds was returned to our area tax payers through our volunteer VITA sites.&uot;

Although figures for 2003 are still pending, citizens in the five counties of Bertie, Gates, Hertford, Northampton and Halifax saw over $37 million in estimated tax return funds in 2002 alone.

Qualifying individuals must have earned an income of $11,490 ($12,490 if married and filing jointly) without a qualifying child; $30,338 ($31,338 if married and filing jointly) with one qualifying child; $34,458 ($35,458 if married and filing jointly) with more than one qualifying child.

Additionally, qualifying individuals must have a valid Social Security number, be a U.S. citizen or resident alien all year and have investment income no more than $2,650 and cannot be the qualifying child of another person.

&uot;There’s no telling how much money people saved as a result of volunteers preparing citizen’s taxes through the VITA sites at no cost to them,&uot; said Ferguson, &uot;but I know it was significant.&uot;

During the meeting, two local citizens gave testimonies about personal benefits they reaped by participating in Choanoke Area Development Association’s (CADA) IDA program.

&uot;It was an experience,&uot; said Tommy Cloyd, an IDA participant. &uot;Two years ago, I walked into the office, having never owned a home before and began the loan process,&uot; he said. &uot;My savings habits were okay since I didn’t have any financial responsibilities, but I began saving every penny and, in the end, it was there for me when I needed it. It all paid off.&uot;

Cloyd, who is physically disabled, now only need to walk through his newly purchased home to see the fruit of his efforts.

&uot;It’s a big responsibility, but I always knew I could do it; I just needed a chance,&uot; he said.

Cloyd credited the support of CADA and friends and family for his accomplishments.

&uot;I know first hand that I am not here of my own volition,&uot; he said, &uot;I don’t know how many disabled people know about or take advantage of the program, but it is very necessary.&uot;

He added, &uot;I would encourage others who think that they can’t afford their own home to look into this program because they helped me get here. It just takes the right mind set and a willingness to do some hard work.&uot;

Entrepreneur Mable Mason saved only $35 a month over a two-year period in the program and now owns a four-bedroom house with a two-car garage in Aulander as a result.

&uot;When I started out I had five credit cards I was paying on time, but something happened in my life and I defaulted,&uot; she said. &uot;So I met with a credit counselor and they educated me to help me get control over my debt.&uot;

Mason, who testified to occasionally delaying payment on her rent, said she never used to worry about getting evicted and losing her dwelling place until she owned her own home.

&uot;I’m a spender, but when you have a house and kids you can’t do that,&uot; she said. &uot;It really changes your perspective because you don’t want to miss that payment when there is a risk that everything you’ve worked for can be lost.&uot;

Another IDA participant was scheduled to attend the meeting, but was unable to be there because she was getting siding put on her new home.

&uot;It’s amazing to think that if people would just change their spending habits and sacrifice a five dollar Big Mac meal at McDonald’s once a week, they would have an extra $20 a month they could put towards a down payment on that new home or towards paying off those high interest credit cards,&uot; said Ferguson. &uot;Some people were raised in a culture that disregarded the whole financial thing and simply don’t understand how banking works, so part of our mission with NC Saves is to send out newsletters that give financial advice and information.&uot;

The quarterly newsletters will feature such information, including savings tips from everyday citizens, like area resident Martha Thompson who was presented with a certificate of recognition for submitting a tip that encouraged parents and other members of the household to set aside a percentage of their income for savings.

&uot;It works great if you do it as a family,&uot; she said. &uot;My mother and father instilled those principles in me and as a result of me passing it along to my kids, my daughter saved $10,000 by the time she was ready to go to college.&uot;

On a national level, the publication offers a $50 savings bond to anyone that submits a savings tip that is ultimately published in the quarterly American Saver newsletter.

&uot;I feel very strongly that empowering our citizens to make smart personal financial decisions improves the overall economic health of the state,&uot; said Moore in a recent memo.

&uot;Northeast Saves is a reality,&uot; said RCPP Chair Curtis Wynn, &uot;And hearing these testimonies and success stories makes me that much more excited. We’re going to make it happen and to have Ellen here along with the State Treasurer’s 100 percent support for this initiative means we’re going to see it come together.&uot;

He also challenged the Northeast to declare January as &uot;Saves Month&uot; and stated that they would be working on sample resolutions to distribute throughout the different counties in the region for consideration after the Thanksgiving holiday.

&uot;January is a time for making New Year’s resolutions and turning over a new leaf and as people begin receiving their income tax refunds, it might be a good time to put savings on the front burner and make some positive investments for the future,&uot; he said.

Richardson stated that anyone interested in becoming a partner in the initiative could fill out and submit a form and NC Saves Participation Form.

For more information, you may visit the following websites: www.americasaves.org, www.charlottesaves.org, www.nctreasurer.com or www.northeastsaves.org which is not yet operational, but currently under construction.

For more information on EITC, visit www.irs.gov/eitc or call 1-800-TAX-1040.

To submit a savings tip for potential publication and a chance to win a $50 U.S. savings bond, send entries, along with your name, mailing address and phone number to: American Saver, c/o Consumer Federation of America, P.O. Box 12099, Washington, D.C. 20005-0999.

Local submissions (information purposes only) should be sent via email to: shirley.white@roanoke.ncemcs.com.