Saving Now Pays Off Later
Guest blogger Jeannie Chaffin is the Director of the Office of Community Services at the Administration for Children and Families.
In school, you learn the basics: reading, writing and arithmetic. By the time you reach your senior year, you’ve taken many courses that will help you choose a career.
But there’s one important skill that isn’t taught in schools: financial education.
The more you know about the benefits of saving and the responsibilities of maintaining good credit, the more likely you are to build a solid credit history and avoid debt.
Financial education is especially critical for people with low incomes who need to create economic stability for themselves and their families.
We want to teach these families to save and invest for the long term so that one day they can achieve economic security and stability on their own. This is particularly vital today when the uncertain economy dictates that everyone have a financial cushion to fall back on in case a job evaporates or a home is no longer affordable.
That’s where the Assets for Independence program comes in.
Designed for TANF and other low-income clients and administered by local community service agencies, the local programs provide:
- Help in “getting banked”—that is, using affordable mainstream financial services rather than payday loans or quickie credit schemes;
- Saving in Individual Development Accounts—programs match clients’ own savings to help them buy a first home, further their education or start a small business;
- Help with managing credit, claiming tax credits and filing taxes;
- Information on accessing federal and state benefits.
One person who jumped on this opportunity is Donna Leisinger, an administrative assistant from Cuyahoga County, Ohio. She was tired of not having “a driveway, a basketball hoop, or a backyard." And Leisinger was “fed up with throwing money away” on rent.
"When I started in the program, I started packing for my new home," she said.
Leisinger learned how to improve her credit score and prioritize expenses. Keeping her eye on her goal, she cut out extras like pizza delivery and bought more modest Christmas presents.
Once the children saw how serious she was about saving for a house, they got on board. The older children helped by caring for the younger ones so Donna could complete the program
Ultimately, Donna’s diligence paid off. The Leisinger family now lives in their own home. The monthly total for Leisinger’s mortgage, interest, taxes and insurance is less than her previous rent.
"I've been independent my whole life,” said Leisinger, “but now I feel like a successful individual because we own a home."
Leisinger’s experience with the Assets For Independence program didn’t only bring her economic independence; it also set an excellent example for her children.
"Now they know you can achieve a goal if you set your mind to it," she said.
Organizations interested in participating in AFI to help people achieve economic security, visit the AFI web page.