Assets For Independence:
First Interim Report to Congress FY1999
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Service Configurations |
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| Asset-Related Services | |||
| Other Services | |||
Asset-Related Services
The purchase of a major asset may be one of the most life-altering experiences that the average person will face, but it is neither simple nor comfortable for anyone the first time. Furthermore, the maintenance of the asset and its utilization to create wealth may also pose a challenge for many low-income people. Asset-specific services and resources are mandated under the AFI statute. Their purpose is to increase the likelihood that account holders will maximize their ability to leverage additional resources and make well-informed choices to acquire the asset of their choice. These and resources are also designed to help the account holders prepare for the long-term maintenance of their assets and positive financial management. The purchase of the asset represents probably the largest monetary commitment they have ever made, both short-term and long-term. It is a decision that will have major long-term impact on the financial security of the family. Furthermore, the technicalities involved in the decisions surrounding the purchase or investment often are complex and unfamiliar. Usually neither the participant nor their family and friends have had experiences in purchasing and maintaining assets to provide guidance.
Therefore, asset-specific services and resources related to the savings goal are important to most IDA account holders’ ability to acquire the asset. Specialized services offered by IDA programs in this demonstration include: education and/or counseling to assist with determination of affordability (short-term and long-term); assistance in planning for the purchase and maintenance of the asset including negotiating the acquisition of their asset; assistance in understanding the process and paperwork involved; and information about avoiding scams. Additional resources offered by IDA programs that help put the asset within reach include additional financial support such as down-payment assistance, special financing arrangements and discounts or free services related to the purchase. Appendix G.3 summarizes the provision and use of these asset-related services.
Other Services
Over 95 percent of the IDA programs reported providing at least one service that helps account holders deal with everyday needs that will help them follow through with their planned IDA savings. The theory of IDA programs is that the provision of complementary services—such as employment support, childcare, crisis management, and cash assistance—improve the savings patterns and program retention of account holders. The provision of these services enhances the account holders’ abilities to save successfully over what is typically a long savings period.
The belief is that the very factors that make it difficult for low-to-moderate income families to save and build assets also put IDA savings at risk. Low-income working families often have unstable employment and inadequate income to meet their basic needs. Because low-income families often lack any substantial financial cushion to handle unexpected life events, their savings can be entirely wiped out by everyday emergencies.
Services and referrals to services address these resource deficiencies and effect the account holders' asset/savings goal. Appendix G.4 (Personal And Employment Interventions) and Appendix G.5 (Financial Services) summarize the provision and use of these other services.
