Rachael Ringwood was a low-income single mom living in subsidized housing, but she wanted better for herself and two children.
“I was always looking to continue my education and wanting to become a homeowner,” she said. “I had heard of these elusive programs that help with a down payment and so I was asking questions of a lot of people because I really couldn’t find them.”
Ringwood eventually saw a newspaper clipping on individual development accounts (IDAs), which match $3 for every $1 a low-income client saves toward a house, small business or college. That led to a conversation and classes with AAA Fair Credit Foundation, which provides credit counseling and financial education. And that led to contact with Habitat for Humanity and more schooling. She’s now a clinical social worker and proud owner of a town home near Salt Lake City’s Trolley Square.
“The security of having a home has been great, especially with the children, just having that stability and financially having a plan,” she said. “I would have never been able to save that money on my own. I was pretty lucky, but I had to seek it out.”
Budget know-how and resources such as IDAs and credit counseling are available to low-income folks trying to get a firmer financial footing, but often those in need don’t know about them.
A new year-long pilot program aims to change that, beefing up the money management basics workshops for those coming off Temporary Assistance for Needy Families (TANF) and entering the job market. Starting in July, AAA Fair Credit will offer budgeting and credit counseling to job seekers attending Utah Family Employment Program workshops in Taylorsville, said Department of Workforce Services TANF manager Sisifo Taatiti.
“We already teach budgeting, but we thought if we could add to that component, it would be even better,” Taatiti said.
AAA Fair Credit’s Martha Wunderli said the focus will be on helping people set long-range financial goals and transition into the financial mainstream. She says knowing programs such as financial education, tax credits and housing programs are out there will assist in that effort.
“Earning a paycheck is one thing, but when you start thinking ahead, your whole vision changes,” Wunderli said. “Asset-building programs [such as IDAs and tax credits] provide solutions and economic drivers.”
Mary Beth Vogel-Ferguson, a University of Utah social work professor who researches welfare policy, thinks the pilot program will only enhance the state’s program.
“For people who have been in poverty long term, some of their money-management skills blow me away,” Vogel-Ferguson said. “But they need to learn new skills. They’re not familiar with banks. They’ve never had to manage larger amounts of money. For folks falling out of the middle class, they need to learn how to make do with less.”
Learning these kinds of skills has made all the difference for Bernadette Deshine, who remembers writing down the goal of becoming a homeowner on a piece of paper 15 years ago.
The single mom went to a free VITA tax clinic and picked up a pamphlet about IDAs, which took her to AAA Fair Credit Foundation and eventually Habitat for Humanity. After years of working, saving, attending financial classes and performing sweat equity, Deshine walked through the door of her first home two years ago.
“It’s takes a long while and at times you get frustrated and feel like you’re not accomplishing anything,” she said. “But a lot of prayers and support from friends and family and people at VITA and Fair Credit and the housing authority, they’ve all been very helpful.”
Taylorsville is one of two sites nationally (the other is Washington, D.C.,) that will be offering money-management classes and credit-counseling transitioning from TANF in partnership with the U.S. Department of Health and Human Services.
Utah 2013 assets scorecard
Households in Utah:
13 percent • live in income poverty
23 percent • live in asset poverty
33 percent • live in liquid asset poverty
3 percent • are unbanked
Source: Corporation for Enterprise Development
The path to financial independence
The following are money-management and asset-building resources available to those with low incomes:
Credit counseling • Budgeting workshops and guidance through AAA Fair Credit Foundation, at 800-350-9899 or www.utahsaves.org
VITA • Free tax help from IRS volunteers by calling 2-1-1 or visiting http://www.utahtaxhelp.org
Microenterprise lending • For small-business loans for low-income entrepreneurs, call 801-746-1180 or www.utahtaxhelp.org
Habitat for Humanity • For information on homes with zero percent-interest loans, call 801-263-0136 or www.habitatsaltlake.com
Family Employment Program • Offered through the Utah Department of Workforce Services, for help call 1-866-435-7414 or www.benefits.gov/benefits/benefit-details/1680