CFED Network

A&O Network Blog

News & Updates from the Assets & Opportunity Network

Author

Opponents keeping up pressure on payday lenders in Texas

Posted by jware on 02/27/2015

Tags: payday lending

Masako Melissa Hirsch interviewed YW's Becca Fritze about the dangers of Payday Lending for the Dallas Morning News in September.

The original article can be found here: http://www.dallasnews.com/news/metro/20140927-opponents-keeping-up-pressure-on-payday-lenders-in-texas.ece

With brightly colored storefronts and signs in English and Spanish, they advertise “Cash now!” and “Cash today!” There’s at least one on every block for several miles.

Despite this busy strip, the numbers of these types of stores in Dallas are on the decline.

Since the city passed a landmark ordinance regulating lenders three years ago, dozens of shops have closed. It’s just one way, city officials and consumer advocates said, that the ordinance has affected an industry that they say preys on low-income residents and traps them in a cycle of debt. Yet while they said most lenders are making efforts to comply, some companies have found ways to skirt the restrictions.

Now, the ordinance’s supporters are gearing up for the 2015 Texas legislative session, anticipating pushback from payday lending companies. Dallas City Council member Jerry Allen, who was a major force in passing the ordinance and continues to encourage other cities to join, said he expects companies will lobby for a weak law that would pre-empt local ordinances.

“My goal would be to not go backwards,” he said. “They’ve given up at the local level. They’re going to put a full-court press at the state.”

As the start of the session approaches, Allen said ordinance supporters will work to get more cities to pass ordinances and rally state legislators. At least 18 cities have passed ordinances similar to the one in Dallas.

The industry’s political clout stifled past efforts to create statewide reform.

Rob Norcross, spokesman for the Consumer Service Alliance of Texas, which represents many of the state’s short-term lenders, said city ordinances often leave customers paying more at one time or having to take out multiple loans.

“Some of these customers are in financial situations that don’t fit the narrow parameters of the ordinance,” he said.

But some change may be coming. The Consumer Financial Protection Bureau, the federal consumer watchdog, is developing rules to regulate the industry. In July, it fined Irving-based ACE Cash Express $10 million for what it described as predatory practices. It also took actions against Fort Worth-based Cash America last November.

Such changes could only help the city regulations, ordinance supporters said.

State and federal laws “are stronger because they come across the board. It doesn’t undermine the benefit of what the cities are doing. It would just make it that much better,” said Ann Baddour, senior policy analyst for Texas Appleseed, an advocate for poor residents.

Some bans

For Sandra Johnson of Irving, a recent payday loan started with a high electricity bill.

Johnson, a receptionist, said money can be tight after rent, bills and food. An unexpected higher bill took her budget over the edge.

She was already paying off other loans. A car-title loan helped her daughter who was out of work. Another payday loan helped when she had surgery.

The loans are easy to get, she said. Paying the high interest, however, was a struggle.

“I understand that when I get a loan, I have to pay it back,” she said. “But when it’s gotten to the point where you have to pay it back or you don’t eat, it makes it hard.”

Marketed as a quick fix to help cover expenses until a person’s next paycheck, the loans often come with costly fees and high interest rates that make it difficult to pay them off.

Consequently, 14 states and Washington, D.C., have banned payday loan stores. But efforts in Texas to rein in the industry have largely failed.

In the past decade, payday and car-title loan companies have used a loophole in state law that allows them to operate without interest rate limits. As a result, a payday loan for $300 may end up costing about $701 — the highest rate in the country, according to an analysis by Pew Charitable Trusts.

In 2011, religious and community groups advocated for state legislation that would limit some of these practices. Ultimately, they were only able to require businesses to be licensed with the state, submit loan data and provide detailed cost disclosures.

The Dallas City Council was already discussing its own ways to regulate the industry. In May 2011, it passed an ordinance that limited where payday loan and car-title companies could open. That June, it passed another ordinance that placed restrictions on actual loans.

Interest limits were out of the city’s power. But the ordinance restricted the amount a person could take out based on income or a car’s value. It also limited renewals and required minimum payments toward the principal.

Dallas sued

Within weeks, the Consumer Service Alliance of Texas and several lenders sued Dallas, arguing that the ordinance conflicted with state law and was intended to put lenders out of business. In May, the Texas 5th District Court of Appeals ruled in the city’s favor and said Dallas is immune from a lawsuit filed by payday lenders.

By then, other cities had joined Dallas. Through efforts by Allen and religious and community groups, many of the state’s largest cities — including Austin, Houston, San Antonio and El Paso — passed similar ordinances.

In North Texas, Denton, Flower Mound and Garland enacted ordinances, while several other cities implemented zoning ordinances.

Limitations

The state doesn’t release specific loan data by cities. But a comparison of licensed stores in Dallas from April 2012, shortly after 2011 state and city regulations went into effect, and July 2014 shows that about a quarter of stores have closed.

The state’s Office of Consumer Credit Commissioner, which oversees the companies, only maintains a current list of store licenses. Texas Appleseed, which regularly requests the data, provided the 2012 list.

In 2012, Dallas had 241 payday and car title loan stores — collectively called Credit Access Businesses in Texas. As of Sept. 18, there were 177 — about a 27 percent decline.

Many of the companies doing business in Dallas closed stores during that time.

In its 2013 annual report, Cash America International said that it closed 36 stores in Texas primarily because city ordinances had reduced the profitability and volume of short-term loans. The company closed three stores in Dallas.

EZCORP also said in its most recent quarterly report that it closed stores as a result of city ordinances.

Multiple calls to companies operating in Dallas were not returned.

But Norcross, the industry representative, said his group projects 46 more stores will close in Dallas by the end of 2014. The ordinance, he said, doesn’t leave companies with much flexibility. With loans limited to four payments, each payment often ends up being too large for customers, he said. It also doesn’t address the differences that come with each loan type.

“It’s a one-size-fits-all approach that is incomplete,” he said.

The time for the group to challenge the Dallas appeals ruling has run out. The group or a lender may be able to refile the lawsuit if a lender gets fined under the ordinance, Norcross said.

Business inspections

Companies have found ways around the ordinance, consumer advocates said.

The Anti-Poverty Coalition of Greater Dallas has been sending volunteers to stores to see if they are complying with the regulations.

Last October, Becca Fritze, senior program manager of financial empowerment at the YWCA, went to a store and asked what would happen if she couldn’t pay off the loan within four payments. After her colleagues asked the same question, lenders directed them online.

“For me, it was that they said, ‘Oh, don’t worry. We’ll just refer you to a store outside of Dallas,’” she said.

Norcross said that such interactions might come from a desire not to lose customers. “If a customer says, ‘Look, I’ve got a problem here. What am I going to do?’ they’re going to try to help them out,” he said.

Baddour, of Texas Appleseed, said some companies also have offered what they describe as single-payment loans that end up having multiple fees.

More enforcement, she said, will help close such potential loopholes.

Dallas began inspecting businesses in May 2013. Since then, it has inspected 87 locations, conducted six examinations and issued 34 notices of violation, said assistant city attorney Maureen Milligan. One lender received four criminal citations.

The most common violations have been that lenders didn’t have proper documentation for an applicant’s income or car value, she said.

Most of the companies, however, have been willing to comply, she said.

Online loans

Statewide, lenders have found areas to grow. While Dallas has fewer stores, the numbers across Texas have stayed around 3,300. In North Texas, some cities without ordinances have more stores than in 2012.

Although the number of new loans and refinances dropped last year, the industry had more consumers, according to the Center for Public Policy Priorities’ analysis of industry filings with the state. The fees charged to customers also increased by 12 percent. The Austin-based center is a nonpartisan nonprofit that pushes for public policies to help low- and moderate-income Texans.

Online loans also seem to be growing. Many lenders offer loans through their websites. Consumer advocates describe that as a way to avoid regulation.

As of now, the Dallas ordinance’s application to online loans is only hypothetical, said first assistant city attorney Chris Bowers. The city attorney’s office hasn’t received any borrower complaints about online loans or had a lender try to argue that one was issued outside of city limits because a portion of it was online, he said.

“It will depend on the facts,” he said. “But the mere fact that they’re touching a computer does not insulate them from the ordinance.”

Ultimately, a statewide law is needed, consumer advocates said.

“Having something comprehensive at the state level would potentially prevent operators from setting up shops just outside the jurisdictions of some of these ordinances,” said Oliver Bernstein, spokesman for the Center for Public Policy Priorities.

Yet laws can only go so far without alternative financial solutions, Fritze of the YWCA said.

“You can kind of put those laws in place, but you still need an alternative product. There aren’t a lot of products out there,” she said.

Financial counseling

Some alternatives are in the pipeline. BCL of Texas, for example, is working to bring the Community Loan Center program, a pilot program in Brownsville, to Dallas and Austin by next year. The program would allow employers to provide loans to their employees at an interest rate capped at 18 percent.

Meanwhile, Fritze meets regularly with Johnson for financial counseling sessions. After she pays off her current loans, Johnson said, she won’t take out any more.

The sessions, Johnson said, “have really taught me these life goals about what it takes to make it.”

Overall, the ordinances have raised awareness about the issue and about financial education, supporters said.

Allen said the ordinance also helps encourage economic development.

“If I was corporate America, I would read that as a positive thing that Dallas is doing,” he said. “That’s the image that you want to have.”

Permalink | Comments () | Main Page | New Post

Author

7 Ways to Turn Saving Money into a Habit

Posted by mlulion on 02/26/2015

by Brittany Lyte, Wise Bread

The spending and saving habits of your past don't define your future — your current ones do. And this America Saves Week is a great time to start with a clean slate. Hitting the reset button won't cure all your financial woes, but when it comes to adopting good saving habits it's truly half the battle. The other half, of course, is drafting a well-planned road map for success. Luckily, we've got a primer to get you started. Read on for our guide to adopting seven money-saving habits that stick.

  1. Set a Goal: How much money would you like to save? And for what?

    When you pinpoint a clear savings goal — be it a new car, a down payment on mortgage, or a backyard swimming pool — it becomes a whole lot easier to conjure up the self-restraint required to achieve it. It needn't be a big ticket item, either. Simply having a goal to visualize, like a college savings account for your children or a fund for spontaneous weekend escapes, will help keep you focused, motivated, and disciplined.

  2. Map Out a Timeline

    Once you've figured out what you're saving for and how much money you'll need, it's time to figure out how long it will take to reach your goal. If you want to save $4,000 for a trip to France, for example, figure out how much money you're willing and reasonably able to part with each paycheck and then calculate how many paychecks it will take you to get there. This savings plan is the roadmap that will help steer you to the day when you've finally saved enough money to book those airline tickets.

  3. Set Benchmarks

    The act of consciously putting away a set amount of money on a set schedule will help build the muscle memory you need to turn saving money into a habit. And since this is the key to adopting a new behavior that will serve you long after you've reached this particular savings goal, it's important to stay on track. Break down your timeline into weekly, monthly, and quarterly savings targets and be sure to verify that you're meeting them every time. When you take a large goal and compartmentalize it into a series of smaller ones, it becomes a whole lot easier to accomplish.

  4. Start Small

    If you're struggling to make ends meet and the idea of feeding your family, filling up the gas tank, and paying the bills while also contributing to your savings account seems impossibly daunting, remember that no amount you invest in your savings is insignificant. Even $1 a day makes a difference. The key is identifying the largest amount of money you can commit to stowing away on a regular basis without thwarting your ability to make good on all your other financial obligations. Don't shortchange yourself, but beware of setting a goal that's overzealous. The process of meeting your goal should be a challenge, but it shouldn't be impossible.

  5. Reward Yourself

    Reward yourself when you reach major savings milestones to help keep up the momentum. For example, after a month of successfully meeting your weekly savings benchmark, treat yourself to a meal at your favorite restaurant or grant yourself the license to splurge (a little!) on your next shopping trip. Remember, your reward needn't require you to spend any money, and it certainly shouldn't bump you off track. A relaxing home pedicure, a guilt-free movie marathon, or a sunset stroll through the park does the trick just as well as anything you can buy.

  6. Don't Let Yourself Slip

    Likewise, it's important to implement consequences in the event that you fall short on one of your savings benchmarks. If you come up 20% shy of your quarterly benchmark, hold yourself accountable. Spend a night in that you otherwise would have spent out on the town. Calculate how much money you saved by forgoing an evening of food and entertainment and funnel that amount straight into your savings account. Then break out your savings timetable and devise a new plan to help get yourself back on track.

  7. Snuff Out Your Bad Habits

    If you're still struggling to stick to your plan, see if you can identify any wasteful spending habits so you can nix them. Keeping track of every outgoing dollar over a two-week period can reveal unhealthy spending habits you never knew you had. Online budget planners offer easy tools to score and analyze your every dollar, but old-fashioned pen and paper works just fine.

What will you do during America Saves Week to kick off your new savings habit?

Brittany Lyte is a columnist for Wise Bread (+WiseBread) — top personal finance blog and winner of PC Magazine’s Top 100 Website Award.

Permalink | Comments () | Main Page | New Post

Author

Paycheck to Paycheck

Posted by jware on 02/24/2015

Tags: new york times

The New York Times produced a compelling video about one family living in asset poverty.

Here's a link:

http://www.nytimes.com/video/business/100000003261636/paycheck-to-paycheck.html

And here's a synopsis of the family's struggle to make ends meet:

The Vories family lives on a volatile income — not knowing how much each paycheck will contain month-to-month. In tough times, Alex Vories borrows his father’s car to deliver pizzas at night.

Permalink | Comments () | Main Page | New Post

Author

The America Saves Week: Take Your Financial Future into Your Own Hands

Posted by mlulion on 02/24/2015

This America Saves Week: Take Your Financial Future into Your Own Hands

By Katie Bryan, America Saves Communications Director

America Saves Week, February 23 – 28, 2015, is the perfect time to review your finances, set your savings goals for the year, and set up a system that will allow you to save automatically. That’s why the America Saves Week theme is - Set a Goal. Make a Plan. Save Automatically.

Did you know that only half of Americans report having good savings habits? Even if you are already saving, it’s good to take a look at your greater financial picture and decide whether there’s potential to save more or set a new savings goal. Join thousands of others who are pledging to pay down debt, save money, and take financial action during America Saves Week.

Not sure what to save for or what to save for next? Here are the most popular saving goals of those who have pledged to save through America Saves:

• Save for Emergencies – Research has shown that low-income families with at least $500 in an emergency fund are better off financially than moderate-income families with less than this amount. Nearly a quarter of savers who have taken the America Saves pledge have chosen “emergency savings” as their first wealth-building goal. Learn more.

• Save for Retirement – Retirement savings is a top priority for many savers. Saving for retirement now will ensure that you have enough money to maintain a comfortable standard of living when you stop or reduce the amount of hours you work. Learn more.

• Save for Education – Saving for education is the second most popular goal savers select when they pledge to save with America Saves. There are many different things to factor in when saving and paying for college. Learn more.

• Pay Down Debt – Getting out of debt is the #3 goal savers select when they pledge to save. The good news is that there is hope. With planning, discipline, patience, and maybe some outside help, almost anyone can reduce their debts and start to accumulate wealth. Learn more.

• Save for a Home – For decades, home ownership has been the main path to wealth for most Americans. Today, home equity – the market value of a home minus the balance on any home loans – represents more than four-fifths of the typical family's wealth. Learn more.

Not sure how to save for your goals? Here are some saving strategies to help:

• Save Automatically – The easiest and most effective way to save is automatically. This is how millions of Americans save at their bank or credit union, and how millions of employees save through 401(k) and other retirement programs at work. Learn more.

• Save at Tax Time – Do you spend weeks eagerly anticipating your tax refund? When the money finally comes in, is it gone tomorrow? Many people view tax refunds as unplanned bonuses. They see the money as a gift from the government, to use for splurges or treats. But a tax refund provides the opportunity to improve your financial situation. Learn more.

Take the America Saves Pledge, or re-pledge, today to set your savings goal and make a plan to save. When you take the Pledge, you can also choose to receive text message tips and reminders to help you save for your goal. And don’t forget to follow America Saves on Facebook and Twitter.

America Saves Week is coordinated by America Saves and the American Savings Education Council. Started in 2007, the Week is an annual opportunity for organizations to promote good savings behavior and a chance for individuals to assess their own saving status.

Permalink | Comments () | Main Page | New Post

Author

Sacramento: Are you ready to build credit?

Posted by tararobinson on 02/23/2015

Tags: sacramento, lending circles, credit-building, dreamers, entrepreneurs, citizens, payday

On Wednesday, March 4, join us in Sacramento to learn about the Lending Circles social loan program!

If you've been wanting to know all about this innovative solution to credit-invisibility, then you'll want to be at this event. An award-winning program, Lending Circles use zero-interest, social loans and financial education to help participants build credit history and access to affordable lending options.

Check out this article on our program in the Boston Globe!

We're looking for nonprofits and foundations to partner with us to provide Lending Circles to the Sacramento community. Come learn about what the partnership means from our CEO Jose Quinonez and Director of Programs and Engagement Mohan Kanungo and the impact you can have on your clients.

Lunch will be provided.

Sponsored by Citi Community Development

Register here: Lending Circles in Sacramento

Permalink | Comments () | Main Page | New Post

Author

Ask the Assets & Opportunity Network: Network Ally Responds to Common Questions on Credit-Building, Part 1 of 4

Posted by klawton on 02/23/2015

By Dara Duguay, Guest Contributor and Fran Rosebush

There is a lot expertise in our field on financial security practices, policy and research. One of the key values of the Assets & Opportunity Network is to share this expertise with and between its members. As a part of our work to do so, we’re launching a new series called Ask the Assets & Opportunity Network, in which experts will be responding to common questions asked about their areas of work. There will be varying levels of questions we’ve heard from the field. If you have a question you’d like to see answered, email it to assetsandopportunity@cfed.org.

For our first edition of Ask the Network, Credit Builders Alliance responded to frequently asked questions on credit. This is Part 1 of 4 with Credit Builders Alliance responding to common questions related to credit, credit-building and innovative solutions for increasing credit.

Network Ally Credit Builders Alliance Responds to Common Questions from the Field

Q: How are credit scores determined? How are FICO scores determined? And how are they different?

A: There is no single credit score. There are score modelers—who may be in house at the Credit Reporting Agencies (i.e., Experian, Equifax and TransUnion), but there are also independent third-party companies—such as Fair Isaac (FICO) and VantageScore. These score modelers also regularly update their risk models which results in numerous generations for each score. For example, the newest generation of FICO is FICO® Score 9 and VantageScore 3.0.

To add to the complexity, each score modeler may have many different scores—FICO has over 50 different scores alone. You may wonder why this is necessary. The answer is that those who request scores are diverse (i.e., insurance companies, mortgage lenders, auto lenders, credit card issuers); therefore, the corresponding scores are also diverse. This is because they are modeled according to the factors that each purchaser of a score deems important.

Even though each scoring model uses different algorithms to calculate their score, there are some generalities among the different factors that make up the score. The major categories are payment history, amount owed, percentage of available credit used, length of credit history, age of credit, types of credit and number of inquiries. Of all these categories, however, the one that is usually weighed the most heavily is “payment history.” Quite simply: Are bills paid on time?

Q: How often do credit companies update their reports?

A: Most creditors report their customers’ payment history to the major Credit Bureaus on a monthly basis, although some smaller creditors may not report as regularly or report to the Bureaus at all. Creditors are not required to report to the Bureaus. It is a totally voluntary system.

Q: If I believe there is an error on my credit report, what should I do?

A: If you believe there is incorrect information on your credit file, it is always a good idea to contact the creditor directly to discuss it. If it is a legitimate error, you should dispute it both with the original creditor and also with the Credit Bureau that contains the inaccuracy. One can request a free copy from each of the three major Credit Bureaus annually by going to www.annualcreditreport.com. Each report will include instructions on how to contact the Bureau to dispute anything you believe is inaccurate. You may submit disputes online, by telephone or by mail.

Q: Am I able to report payments to the credit bureaus directly? And if so, how would I do so?

A: No, the creditors are the ones who report to the bureaus. However, a major exception is with rent payments. There are third-party payments processors such as WilliamPaid and RentReporters who may report to Experian and/or TransUnion if the landlord agrees to accept the payment through the payment processing company. A future blog will discuss rent reporting in more detail. Stay tuned.

Q: What are the best ways for me to improve my score in the next six months?

A: CBA recommends concentrating on the greatest weighted factor in determining a credit score—one’s payment history. By paying your bills on time and avoiding late payments, your score can show the most improvement. If you consistently pay late, you may need to figure out why. Is it a cash flow problem (consider asking the creditor to change your due date to better align with your revenue stream) or is it a problem due to disorganization or procrastination? By discovering and putting a plan in place to avoid late payments, one will benefit by noticing an improvement in their credit score as these remedies are put into place.

Permalink | Comments () | Main Page | New Post

Author

5 Simple Steps to Save Successfully this America Saves Week

Posted by esivak on 02/23/2015

America Saves Week (February 23 – 28, 2015) is an annual opportunity for individuals to assess their savings and take financial action. America Saves’ mantra – and the focus for America Saves Week – is simple: Set a Goal. Make a Plan. Save Automatically. When you know what your current financial picture looks like, you can be more proactive in setting yourself up for future success.

Try these five simple steps during America Saves Week to help yourself save successfully:

  • Assess Your Savings. Like your health, you should assess your savings annually to make sure you’re savings priorities are on the right track. Complete this simple 12 question assessment to find out your current standing and help you plan for the future.
  • Evaluate your Savings Preparedness. Check off your savings accomplishments on the Saver Checklist to further evaluate where your savings habits need strengthening for your future goals.
  • Take the America Saves Pledge. Those with a savings plan are two times as likely to save for emergencies and retirement than those without one. Join the nearly 400,000 American Savers who have already committed to save. When you make the pledge, you can choose to receive text message tips and reminders to help you save towards your goals.
  • Share Your Savings Goal. Take part in the 2015 #imsavingfor Photo Contest. Share a selfie that shows what you’re saving for on Facebook, Twitter, or Instagram, and enter the contest at http://americasavesweek.org/imsavingfor for a chance to win $500. Savings never looked so good.
  • Make Your Savings Social. Are you on Twitter or Facebook? Join America Saves in encouraging your friends, family, and colleagues to save this week. Better yet, join one of the five – yes, five! – Twitter chats that America Saves will be a part of this week to get real-time savings tips and advice.

America Saves Week is coordinated by America Saves and the American Savings Education Council. Started in 2007, the Week is an annual opportunity for organizations to promote good savings behavior and a chance for individuals to assess their own saving status.

Permalink | Comments () | Main Page | New Post

Author

"37% of Americans think they're too broke to save"

Posted by jware on 02/17/2015

Tags: savings accounts, financial planning

By Morgan Quinn for Gobankingrates.com

This article was originally published by Gobankingrates.com and then republished by The Dallas Morning News on January 13.

Americans really want to save. They just don’t know if they can do it.

Saving money is this year’s most popular financial resolution, with more than 37 percent of Americans emphasizing it over paying down debt, curbing their spending, investing and even getting a raise. But a new GOBankingRates survey run through Survata, which asked consumers about their biggest savings goals for 2015, found nearly one-fourth of respondents aren’t at all confident that they’ll be able to meet this resolution.

The poll revealed Americans’ No. 1 short- and long-term savings goals, the biggest obstacles they believe are keeping them from success, and what they’re planning on doing differently in 2015 to save more.

Overall, building an emergency fund came in first place for short-term savings goals, while saving for retirement was the most popular long-term goal. Insufficient income was the top response for the biggest obstacle facing savers in 2015, followed by unemployment. More than 22 percent of respondents said they have little or no confidence they’ll be able to follow through on their savings resolution this year.

There were some surprising variations among demographics. For example, women are more focused on building an emergency fund, while men are far more likely to be saving for a vehicle. Millennials also have cars on their minds, as well as big-ticket items and vacations, whereas Gen Xers are pursuing homeownership and baby boomers are busy saving for home renovations and retirement.

Permalink | Comments () | Main Page | New Post

Author

"Here's The Painful Truth About What It Means To Be 'Working Poor' In America"

Posted by jware on 02/17/2015

Tags: working poor, huffington post

By Nick Wing and Carly Schwartz for The Huffington Post

This article originally appeared in The Huffington Post May 19, 2014

In a nation that has long operated on the principle that an "American Dream" is available to anyone willing to try hard enough, the term "working poor" may seem to have a bright side. Sure, these individuals struggle financially, but they have jobs -- the first and most essential step toward lifting oneself out of poverty, right?

If only it were that simple.

According to 2012 Census data, more than 7 percent of American workers fell below the federal poverty line, making less than $11,170 for a single person and $15,130 for a couple. By some estimates, one in four private-sector jobs in the U.S. pays under $10 an hour. Last month, Senate Republicans blocked a bill that would have raised the federal minimum wage from $7.25 to $10.10 an hour, despite overwhelming public support for the measure.

And these numbers don't say anything about the many Americans who earn well above the official poverty line and still barely stay afloat. In HuffPost's "All Work, No Pay" series, the working poor told their own stories, painting a devastating portrait of their day-to-day struggles.

They're a diverse range of people: single parents, couples with and without children, young women with graduate degrees, business owners, seniors and everyone in between. Their financial situations, however, show many similarities. Jobs generally provide them with the means to barely scrape by, treading paycheck-to-paycheck, earning just enough to keep from going under, swallowing their pride sometimes to take food stamps or visit food banks. Others are entirely out of work, tirelessly seeking employment and relying on other means to survive.

Through their words, we see what it's really like to be "working poor" in America -- and just how much more it looks like rock bottom than most would imagine.

Being working poor means toiling through "pure hell" for next to nothing.

Earlier this year, 55-year-old Glenn Johnson was making about $14,000 a year -- or $7.93 an hour -- at a Miami-area Burger King. He'd been in and out of the fast food industry for more than 30 years. Recently he watched as his employer reported a 37 percent increase in its quarterly profit, while continuing to resist a minimum wage increase that workers like Johnson have been fighting for.

Johnson described his daily routine as "pure hell." It's a nonstop effort to keep the store clean and the customers and his managers -- most of whom are less than half his age -- happy. "Sometimes, I get home and I’m so tired, I eat dinner, take a shower, lay down to watch TV, and I’m going to sleep," he said. "Next morning comes. I’m tired, but I'm trying to make it."

fast food employee

And yet still wishing you could work more.

While Johnson was far from enthusiastic about his work at Burger King, with no computer and few immediate prospects of another job, he still wished he could clock more hours. He said he worked about 35 hours a week, but wanted anywhere from 40 to 50, which would make it easier to pay for his $765-a-month rent, gas and any of the things he can't currently afford. Since Johnson first told his story, his corporate-owned Burger King made him full-time and gave him a raise.

Deangelo Belk, a 21-year-old Wendy's employee making $7.50 an hour, also knows the pain of not getting enough hours to pay for the things he wants or to help him save enough to move out of his mother's house. He works around 10 hours a week and said that he's regularly ignored when he asks for more time.

Because you know you're lucky to have a job, no matter how awful it is.

Vanessa Powell, 29, works full time in a Goodwill warehouse in Seattle for $9.25 an hour. She holds a bachelor's degree in English and a master's in business administration. But with her fiancé out of work, she's just grateful to have a job, even though she occasionally feels it's "beneath" her. Even with the job, however, it's sometimes hard for them to get enough to eat.

"I mean, yeah, it's dirty work and often demeaning work, but at least it's work," she said. "Even though [my fiancé] only worked part time, it was still something. I make enough to cover rent and electric, but we share a cell phone, which is why it's kind of hard for both of us to search for jobs."

But finding employment can also risk the crucial aid that helps you get by.

Helen Bechtol, 23, is a mother of two and a community college student with dreams of graduating from the University of North Carolina Wilmington. To help pay for child care, she took a second job, which made her ineligible for day care assistance.

Ashley Schmidtbauer said her family is "not destitute, but we barely make it month to month." She stays at home to raise her kids and has found there aren't any easy alternatives. Her husband's income alone makes the family ineligible for day care assistance. "To be honest, we make roughly $35,000 a year. Somehow, we make over $10,000 more than their limits allow," she said. "We are the in-betweeners. Not making enough to live 'comfortably' -- but not 'poor' enough to get any assistance either. We don't expect handouts. We just want what is best for our family."

Being working poor means knowing it can be expensive just to keep your job.

Joanne Van Vranken, 50, was laid off in 2011. After nearly two years of unemployment, she landed a temporary administrative assistant position, which requires a 60-mile round-trip commute every day. Van Vranken's car is in desperate need of repair, but she hasn't had the money to fix it in years. She's worried her car will die, which could put her back in dire financial straits. "And I don't have the money to buy a new one," she said. "But I have to do it, because we need to pay the bills."

Janet Weatherly, 43, has almost completed her doctoral degree but can't find employment in her field. Instead, she's making $11 an hour as a sales associate for a major retailer. Her job is a 45-minute drive from her house, and a significant chunk of her paycheck goes toward gas money. Weatherly's parents put her car repairs on their credit cards. She'd like to finish her dissertation, but currently can't afford to get her documents out of a storage unit halfway across the country, much less invest more time in her education.

job fair unemployed

Or lowering your standards for employment and often still not finding work.

Craig Gieseke is unemployed. At nearly 60, he spent 32 years in journalism, but most of the past decade he was self-employed, so he doesn't qualify for unemployment benefits. Gieseke doesn't want assistance. He wants a job, and he'd take pretty much any at this point. Would-be employers tell him that he is "overqualified" -- a term he calls a euphemism for "too old" -- or that he'd be "bored" doing the required work. "'Bored' is hanging around the house all day because you don't have money to do anything else," he said.

It means making shortsighted decisions because long-term plans seem doomed.

Linda Tirado knows what it's like to be desperately poor. She understands firsthand the mentality that leads many people in similar situations to spend money on things like cigarettes and fast food.

"It is not worth it to me to live a bleak life devoid of small pleasures so that one day I can make a single large purchase. I will never have large pleasures to hold on to," Tirado said. "There's a certain pull to live what bits of life you can while there's money in your pocket, because no matter how responsible you are, you will be broke in three days anyway. When you never have enough money, it ceases to have meaning."

And living in constant fear of losing what little you do have in an instant.

When Alicia Payton, a 31-year-old mother of two, received a promotion at her job, she thought the increased pay would make the nearly 100-mile round-trip commute worth it. But hope quickly turned to panic when she had a car accident, doing $4,000 worth of damage to her vehicle. Unable to afford immediate repairs or a rental, Payton couldn't get to work, which she thought would result in her firing. "I've worked so hard to get where I'm at, and one simple thing and I'm afraid I'm going to lose everything," she said. Payton later learned that she had not been fired and had more time to find another way to get to work.

Karen Wall, 38, works as a teacher, cheerleading coach and weekend bartender. Yet money is tight, and all of it goes to keeping her family afloat and paying off her student loan debt. Both of her boys have special needs, so even with the multiple income sources, Wall knows she's only one disaster away from losing it all. "If I got in a car accident, I'd be homeless," she said. "If I get laid off from any of my jobs, my kids will end up going hungry."

food stamps

Even if things seem manageable now, you could be just a few setbacks away from collapse.

Not so long ago, Kathleen Ann had a house, vacation time, spending money and everything else available to someone with a high-paying corporate job. Then she was discarded in a layoff, cast into a world where she could only find occasional part-time work. Ann now makes less than $20,000 a year, lives in an apartment and has been forced to accept that she is poor -- a "Used-to-Have," as she described it. "As a 'Used-to-Have,' I know exactly what Corporate America, lobbyists and politicians have taken away from me," she said.

Being working poor means learning the hard way that investing in your future can actually make things tougher.

Weatherly, who has a bachelor's degree in English and a master's degree in public health, is still paying off her six-digit student loan debt. "Things are so bad that I can't even afford to file for bankruptcy," she said. "I have applied for hundreds of jobs over the past six years."

DJ Cook, 36, a teacher who has a master’s degree and lives in a converted garage, described himself as “suffocated by student debt.” "I've done everything that I was told to do in order to be successful," he said. "I'm in a lifetime of debt with no foreseeable answers."

Carla Shutak thought buying a house with her husband, who was gainfully employed as a civil engineer, would be a wise investment. When he was laid off in 2009, they couldn’t keep up with the mortgage payments and their home was foreclosed on. "My American Dream died," she said. "Despite doing what we were taught was right by putting 20 percent down and asking for a fixed 30-year mortgage, we were now in our 40s and starting over with nothing."

And can put you at a disadvantage even as you're just starting your adult life.

Monica Simon, 24, works full time at an online advertising firm, earning $23,000 a year after taxes. She's still paying off her student loans and often relies on credit cards to cover basic costs. "Sometimes I get paid and then I have, maybe, $150 left over for the two weeks," she said. "I just feel I'm getting way behind where I want to be for my age. I feel I'm just starting my life and I'm already miles and miles behind."

college students debt

Even if you saved for retirement, being working poor means using up those funds long before you get there.

Van Vranken spent 16 months unemployed before landing her current temp job. During that time, she used her retirement savings to cover expenses. “I’ve decimated my 401(k),” she said. "Without a permanent job, I don't know if I'll be able to rebuild it. I worry I'm going to be one of those senior citizens whose only meal each day is from Meals on Wheels."

It means facing the harsh reality that while money can't buy happiness, it's hard to be happy without any.

Bechtol is consumed with constant anxiety over having enough money to support her two young children. "I go to school and am only paying my parents $250 a month to live in their house and can still barely do it," she said. "I get so overwhelmed sometimes that I think it affects my parenting, and that's what I hate the most. I don't need money to be happy, but I do need money to pay for the resources I need for happiness."

And realizing that without money, it's difficult to meet fundamental human needs.

Jason Derr, 37, who earns $10.75 an hour and supports his wife and baby, wishes he and his wife could socialize with the few friends they have. But the lack of money stops them. "We can't afford to do anything," he said. "I feel like we are unable to participate in humanity, that being alive has a buy-in cost."

Similarly, Simon will spend full weekends at home without social interaction. "There will be weekends when I'll just have to sit home because if there's a priority between food and going out, it's going to be food." Powell added that she hasn’t seen her friends in "six months because I can't afford to go out with them, and they all want to go out."

minimum wage protest

For the working poor, basic medical care is a luxury that's often sacrificed.

Carol Sarao, 57, a formerly successful musician who now brings in roughly $240 a week writing web content, saves money by avoiding routine medical care and hoping her health remains relatively stable. When she does get sick, she tries to fix the problem herself. "I try to research it on the Internet or I try to find a friend who has antibiotics or something," she said. "I haven't had any sort of exam in years. I don’t know how much longer it can go on."

Sarao described a time she suffered an allergic reaction and desperately needed a hospital visit, but ultimately decided the financial burden wasn’t worth it. "I remember sitting outside of the emergency room and thinking, 'If I can't breathe, I'll go in and get the shot. But if I can breathe, I won't go in and I'll save the money,'" she recalled. "I've had different cuts that got infected and I just used a hot compress."

Or a necessity that leads to taking risky chances.

Bernadette Feazell, 65, who makes $8 an hour at a pawn shop in Texas, takes a four-hour bus trip to a dangerous area of Mexico when she has medical needs. She contends the trips save her thousands of dollars. "I need a cavity filled," she said. "My last Mexican filling fell out, from two years ago. I went down to Nuevo Laredo. It’s very violent."

Feazell also buys antidepressants across the border. "I buy my Prozac over the line. I speak Spanish," she said. "Without antidepressants, I don't think -- it would take a toll on me."

Because not having the money to seek medical treatment doesn't mean you don't need medical treatment.

Beverly Hill, 60, was laid off from her full-time job more than six years ago and has been actively seeking employment ever since. She avoids routine check-ups because she can’t afford them. But the last time she visited the doctor, for what she described as excruciating abdominal pain, he found something more worrisome.

“He wasn't so concerned about my guts as he was about an irregular heartbeat,” she said. "I was hospitalized. Two and a half days in the hospital came to over $40,000. After pleading poverty and asking to be considered a charity case, the hospital relented and lowered my bill to $12,000. I still can't afford to pay this. I'm eking it out a little at a time."

Being working poor means coming up with creative solutions in order to eat.

Larry Silveira, 60, who earns $9.25 an hour at his part-time retail job, was raised on a farm and learned how to can vegetables at a young age. He now uses the same strategies to maximize his family’s limited food supply. "You buy certain vegetables when they're in season, when they're cheap. You put them in the freezer and have them in the winter when they're expensive," he said. "If you find chicken breast for 99 cents a pound, buy $3 worth and put it in the freezer."

Derr and his wife keep a "food safety box" in the pantry. “Every time we go grocery shopping, we buy a $1 item -- pasta, canned veggies, etc.,” he explained. "At the end of October, we had to live off that box for two weeks."

food pantry

And sometimes accepting you'll just have to go hungry.

Cory Brooks, a senior at George Washington University, works more than full time in addition to her studies and barely makes enough money to eat. "My friends always ask how I stay in such good shape, how I never gained the 'Freshman 15,'" she said. "I smile and shrug, but what I really want to tell them is that being too poor to buy food is great for keeping the weight off."

It means sacrificing your own basic needs for those of your children.

Trisha Lovetrove, a wife and mother of two, said that despite her husband’s full-time job, some weeks she can't afford to buy enough food for the whole family -- so she's the one who suffers. "I feed my children and my spouse, and find an excuse not to be hungry because there's nothing left," she said. "Those weeks suck your will to live."

Kelly Lingo, 22, a stay-at-home mom raising her infant son with her boyfriend, who works full time for $10 an hour, described a similar struggle. “If we do have extra money, it usually goes to diapers or formula,” she said. “Feeding my son, that's my biggest concern. As much as I don't like to skip meals, I can do it -- I can go without eating if it means feeding my son."

Or coming to terms with the fact that you may never be able to afford parenthood at all.

At 36, Cook would like to have children someday. But his financial situation makes that seem impossible. "[I]t's slowly starting to dawn on me that I will most likely never have children, as I would never intentionally bring another child into the world of poverty," he said. "A house and/or a family is a laughable proposition at this point."

For the 29-year-old Powell and her fiancé, poverty has also affected discussions about having kids. "My fiancé and I have kicked around the idea of having kids for almost as long as we've been together, but we don't make enough, in all sanity, to allow a child in our care," she said. "About eight months ago, we just stopped talking about it entirely."

And if you have children, being working poor means worrying that their lives will ultimately be harder than yours.

Jennifer Blankenship, a 39-year-old mother of four whose family lives on her husband’s $11-an-hour job, has been able to send one daughter to college with the help of financial aid. Still, she, along with a growing number of both middle-class and poorer Americans, takes a bleak view of her children’s future.

"I think that our kids are going to have a lot harder time than we've had," she said. "And that's scary, because we've had a really hard time."

This story has been updated with information about Johnson's current full-time employment status.

http://www.huffingtonpost.com/2014/05/19/working-poor-stories_n_5297694.html

Permalink | Comments () | Main Page | New Post

Author

CASH Summary of Accomplishments - 2014

Posted by klyons on 02/11/2015

Created in 2004, Creating Assets, Savings & Hope (CASH) Buffalo works to increase the financial stability of low-to-moderate income families in Buffalo and Erie County. Our coalition consists of over sixty member organizations, including foundations, banks, credit unions, nonprofits, faith-based and community groups, educational institutions, employers, and concerned citizens. CASH Buffalo focuses on a variety of proactive, community-based asset building strategies including: securing working family credits and other income supports (including Earned Income, Education, and Child Tax Credits); improving the coordination, reach, and consistency of local financial education programming; supporting education and employment opportunities; and encouraging homeownership and other asset development through Individual Development Account (IDA) matched savings accounts.

Listed below are CASH Buffalo’s outcomes and successes for 2014:

  • Completed more than 8,319 volunteer-prepared state and federal tax returns for low-to-moderate income households in Buffalo and Erie County;
  • Provided access to free online filing (www.myfreetaxes.com) for more than 404 filers;
  • Connected 3,302 low-wage earners to the Earned Income Tax Credit generating more than $7,210,370 in tax credits for working families;
  • Saved local taxpayers more than $2,180,750 in tax preparation fees;
  • Distributed more than 90,000 marketing pieces for free tax services in Erie County and an additional 5,000 pieces specifically designed for veteran and military families;
  • Connected people to the discounted prescription through the FamilyWize discount card in which 42,390 claims (since program inception) have been processed for more than $1,000,000 in prescription savings;
  • Coordinated the first ever Financial Wellness Tour with stops in 5 locations serving more than 575 people;
  • Hosted the 7th Annual CASH IN Saturday event alongside National EITC Awareness Day at the Northwest Buffalo Community Center with over 75 people in attendance;
  • Coordinated 13 financial wellness events/classes with 276 people in attendance;
  • Connected more than 111 students and young adults with financial education opportunities;
  • Compiled monthly financial education class listings which served over 800 people at 177 free and public classes;
  • Partnered with Opportunity Corps to provide more than 5,668 referrals on financial topics at free tax site locations (Banking: 1,346, Credit: 1,996, Savings: 2,326);
  • Connected more 1,566 people to long-term savings vehicles at free tax site locations and via “Lunch & Learns”;
  • Prepared free income tax returns for 590 veterans and/or military family members (a 24% increase from the prior year) and providing additional information at community events for an additional 250+ veterans;
  • Facilitated 10 poverty simulations for local partners;

Special thanks to our funders: Bank of America, Citizens Bank, First Niagara Bank, Internal Revenue Service, Key Bank, M&T Charitable Foundation, United Way Worldwide, and Walmart Foundation.

Permalink | Comments () | Main Page | New Post

Recent Posts

Copyright © 2015 CFED — Corporation for Enterprise Development 1200 G Street, NW Suite 400 Washington, DC 20005 202.408.9788