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New report: Economic recovery has made no dent in NC poverty

Posted by dbrown on 04/07/2015

Tags: recovery, poverty, North Carolina

Originally posted to ncpolicywatch.com:

Study finds state has higher rates of deep poverty and child poverty than majority of U.S.

Poverty in North Carolina either climbed or stayed steady from 2007 to 2013, despite the economic recovery, according to a new report from the Budget & Tax Center, a project of the NC Justice Center. Both North Carolina’s off-kilter economy and policymakers’ decisions to cut back on vital supports for working families are keeping poverty high, as wages remain stagnant, economic gains bypass nearly everyone except those at the top, and lawmakers continue to enact policies that compound these economic disparities.

In 2013, poverty in North Carolina – which is defined as a family of four living on less than $24,000 each year – was the most widespread it had been since before the turn of the century, the report said. The rate was 17.9 percent in 2013, the 11th highest in the nation, with the deep poverty rate and child poverty rate both the 12th highest.

“From the mountains to the coast, poverty-level incomes are a harsh reality for more than 1.7 million North Carolinians who find affording the basics such as rent, food, and utilities to be a daily challenge,” said Tazra Mitchell, a policy analyst with the BTC and author of the report. “Making it just a little easier for people to increase their earnings not only helps families struggling to pay the bills but also makes the economy stronger for all of us.”

Poverty has consequences for us all, and the depth of North Carolina’s economic hardship is closely tied to demographics as well as where one lives, the report said.

Race and gender play significant roles in poverty. Communities of color, women, and children are more likely to face economic hardships than whites, men, and older adults, respectively.

Racial disparities in income not only harm people of color but have consequences for all of us because inequities keep the economy from reaching its full potential. North Carolina’s Gross Domestic Product—a measure of all goods and services produced in the state—would have been $63.53 billion higher in 2012 if there had been no gaps in income by race and employment.

North Carolina’s child poverty rate was 25.2 percent in 2013, an increase of 6 percentage points since 2007. More than 4 in 10 children who grow up in poverty are likely to remain there as adults, with even less economic mobility for African American children. Poverty’s reach varies considerably across the state, revealing a stark rural-urban divide. Out of the state’s 100 counties in 2013, the 45 highest county-level poverty rates were all in rural counties—up from 31 in 2012.

More North Carolinians live in high-poverty areas. Urban and suburban areas are contending with the growing concentration of poverty. In fact, the state’s metropolitan areas experienced some of the biggest jumps in the country for the number of people who are poor and living in high-poverty areas.

Work and income supports such the Earned Income Tax Credit, Supplemental Nutrition Assistance Program (SNAP), and temporary unemployment benefits helped lift 1.5 million North Carolinians – including 340,000 children – out of poverty each year, on average, from 2009 to 2013, under the Supplemental Poverty Measure. Unfortunately, in the last few years both state and federal lawmakers have cut back on these supports, making it harder for people who live paycheck to paycheck. In addition, tax cuts are costing upward of $1 billion this fiscal year and going forward, making it impossible to replace the most damaging cuts to anti-poverty programs and other vital services that lawmakers enacted in the aftermath of the recession.

“North Carolina needs policies that create equal opportunity, rebuild entryways to expand the ranks of the middle class, and ensure that prosperity is broadly shared so that all North Carolinians can reach their potential,” Mitchell said. “Until lawmakers fix the state’s and the nation’s broken economic model, large numbers of people from Murphy to Manteo will wake up to poverty, struggle to put food on the table, and be unable to afford the basics like rent and child care.”

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What is Texas doing to educate young people about money?

Posted by jware on 04/07/2015

Tags: Texas, Education

This article originally appeared in the Dallas Morning News:

http://www.dallasnews.com/business/columnists/pamela-yip/20150405-financial-literacy-essential-for-texas-students.ece

Financial literacy essential for Texas students

By Pamela Yip

Published: 05 April 2015 09:12 PM Updated: 05 April 2015 10:36 PM

April marks the start of Financial Literacy Month, so it’s a good time to ask how we’re doing at educating young people in the basics of money management principles and math.

“Overall, I see good things happening,” said Nan Morrison, chief executive of the Council for Economic Education in New York. “Two years ago we published a set of national standards for financial literacy. Those were adopted in four more states last year. Once you have standards, it’s the starting point for making sure that good curriculum can get developed in a state.”

In Texas, we’re fortunate that schools have a clear mandate to provide financial education to students.

Texas is one of 22 states to require that students pass economics to graduate from high school. The one-semester course now includes lessons on financial literacy and paying for college, said Laura Ewing, chief executive of the Texas Council on Economic Education.

“While these additions are important,” Ewing said, “they should be the culminating lessons as we send students into the world to earn a living. Instead, they were the only financial literacy lessons that students were required to take, and they were too little, too late.”

But after the implementation of a new law last fall, students in kindergarten through eighth grade are now required to take financial literacy lessons, she said.

Still, much needs to be done.

Texas ranks 42nd overall in financial literacy, according to WalletHub, a personal finance website.

“For Texas, the biggest issue is the percentage of unbanked households, and even more so than that, it ranked 47th for the amount of nonbank borrowing individuals,” said Jill Gonzalez, WalletHub spokeswoman.

The unbanked are people without bank accounts. Texas ranked 41st in the percentage of unbanked households.

“Texas’ ratings are abysmal, as usual,” Ewing said. “However, I have great hope that recent Texas legislation and action by the Texas Education Agency and the State Board of Education will begin turning around consumer spending and saving.”

It’s best to get to kids when they’re young and can build a strong foundation in financial literacy.

Consider the findings of a recently released survey of 43,000 college students by Higher One, which markets financial services to colleges and students, and EverFi Inc., an education technology company.

The survey found that students are taking out more and larger student loans, yet feel less prepared to manage their money than any other aspect of college life. Also, although students reported a higher level of financial experience than in previous years, they didn’t report higher levels of responsible financial behavior.

The benefits of financial education are clear.

A January study funded in part by the FINRA [Financial Industry Regulatory Authority] Investor Education Foundation found that students in states with financial literacy requirements had higher credit scores and did a better job of repaying debt when they became young adults.

Texas was one of three states evaluated by researchers from Montana State University, the Federal Reserve Board and the Center for Financial Security at the University of Wisconsin-Madison.

“We are able to demonstrate that more rigorous state mandates, such as in Georgia and Texas, have a greater effect on subsequent financial well-being for young adults,” the researchers said.

All the more reason why we can’t let up on requiring financial literacy in schools.

Follow Pamela Yip on Twitter at @pamelayip.

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OpportunityAllianceNV

Posted by mjohnson on 04/03/2015

Tags: Veteran, Pay Day Lending

AB 318 – REVISES PROVISIONS GOVERNING FINANCIAL SERVICES (Military & Veteran Lending Pay Day Lending Interest Rate cap of 36%) Nevada Assembly Commerce & Labor Committee – Meeting Scheduled for today, April 3 @ 1:30 p.m. Room 4100

https://legiscan.com/NV/bill/AB318/2015

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Assets & Opportunity Network TA Fund: Integrating Financial Coaching Throughout Wayne Metro Community Action Agency

Posted by mlulion on 04/01/2015

By Kori Hattemer and Fran Rosebush on 03/05/2015 @ 10:30 AM

Wayne Metropolitan Community Action Agency (Wayne Metro), an Assets & Opportunity Network Lead Local Organization, applied to the A&O Network Technical Assistance (TA) Fund to expand financial coaching services throughout their departments and programs. They recognized that clients receiving services across their organization had financial insecurity needs and concerns and they saw benefit in being able to increase their capacity and staff ability to talk about financial matters with clients.

In order to expand and integrate their financial coaching work throughout their service delivery, Wayne Metro worked with A&O Network staff to assess their staff readiness and client needs and then use their learnings to create a training and integration plan for their organization.

Through an online survey and in-person listening sessions with staff and clients, Wayne Metro learned more about their staff’s knowledge, behaviors and attitudes toward financial matters, client financial security needs, and their internal capacity needs to integrate financial coaching throughout their programs and services.

Assessment of Wayne Metro Staff and Clients

Key takeaways from the staff survey and in-person listening sessions included: -Staff members understood their clients’ financial challenges and were committed to helping clients build financial security.

-Staff members already discussed financial issues with clients and helped them access financial resources, but they want more knowledge, resources and skills to improve their confidence and ability to help clients address financial issues. Specifically, staff want a deeper understanding of financial topics and coaching skills they could use to help staff change their attitudes about money, make informed decisions about long-term financial products and establish behaviors that help them work toward financial goals.

-Staff responsibilities vary broadly by program, so a multi-tiered training approach would help ensure that staff receive the specific training and resources they need.

-Staff members want training on managing their own personal finances, but a large number shared that they did not want to discuss these topics with their peers and instead prefer online training options that they could complete at their own pace.

In summary, staff want a deeper understanding of financial topics and coaching skills they could use to help change their attitudes about money, make informed decisions about long-term financial products, and establish behaviors that help them work toward financial goals.

Financial Coaching Training Plan

A&O Network and Wayne Metro staff used this information from staff and clients to develop the multi-tiered financial coaching training plan depicted in the image on the right. Instead of providing extensive financial coaching training to all staff, Wayne Metro identified the key types of information and skills that different groups of staff need. Financial coaches were the only staff who needed financial coaching expertise, and they wanted a training that offered credentials. Program managers only needed an understanding of the basics of financial empowerment since they aren’t working directly with clients, and they wanted personal finance information they could use in their daily lives. Direct service providers needed basic financial coaching skills they could use in interactions with clients along with a baseline of financial empowerment information, and they also wanted information they could use to manage their own finances.

Financial Coaching Training Resources

A&O Network and Wayne Metro staff identified the following resources for providing this training:

Financial coaching: A list of training providers is available in Financial Coaching Training Curricula: Field Inventory and Summary Brief by the Center for Financial Security. JPMorgan Chase & Co. offered scholarships for 16 Wayne Metro staff to attend the NeighborWorks financial coaching training in Detroit. After the training, one of the housing counselors who work with homeless youth was really excited about incorporating what she learned into her work. She said that now she is less focused on numbers and more focused on each person’s goals and how to meet them. Wayne Metro is also working with local partners to figure out how to bring the Central New Mexico Community College financial coaching training program to Detroit so more of their staff can be trained.

Basics of financial empowerment: The Consumer Financial Protection Bureau provides trainings on their financial empowerment toolkit for social services staff, Your Money, Your Goals (YMYG). Two Wayne Metro staff attended the day-long training on YMYG before CFED’s Assets Learning Conference, and 12 additional staff members attended a two-hour online webinar.

Personal financial management: Free curricula options Wayne Metro considered include Money Smart by the FDIC, Hands on Banking by Wells Fargo and Better Money Habits by Bank of America, among others. A local FDIC partner conducted a train-the-trainer on the Money Smart curriculum for 24 Wayne Metro staff, including financial coaches and staff who are new to financial capability services. Wayne Metro reported that this training helped give all staff a similar language to use when talking about financial capability.

Ongoing support: In addition to trainings, Wayne Metro staff expressed an interest in more opportunities to share resources and discuss challenges with peers in their program and in other programs across the organization. Wayne Metro plans to achieve this through cross-program meetings and an internal listerv.

Wayne Metro continues to explore opportunities to build the capacity of their staff to provide financial coaching. They are also focused on making connections between departments and staff more formalized so that staff can work together to help low-income members of their community achieve financial security.

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Wayne Metro Tax Program: There Is Still Time!!

Posted by mlulion on 04/01/2015

By Elena Garton

THERE IS STILL TIME!!!

If you have not had your taxes done yet there is still time! Come to any of the Wayne Metro Tax Sites to have your taxes completed by our quality staff and volunteers! Visit the Tax Program page on the Wayne Metro website for a full list of locations.

AWESOME CREDITS YOU MAY QUALIFY FOR!

Tax credits are beautiful things. They can reduce the amount you owe, or they can increase the refund you are receiving. That is what you call a win-win! All credits have qualifying guidelines you must meet before it is applied to your taxes.

Below are a few common credits with a brief description, if any of them potentially apply to you be sure to look into it (or have your tax preparer do it) and see if you qualify!

Federal:

  1. Earned Income Tax Credit - This credit helps you keep more of what you have earned. You must have earned income and file a return. Even if you do not owe or are not required to file, you may have the opportunity to get a little something back.

  2. Child and Dependent Care Credit - If you have a qualifying child or dependent that you had to pay child care expenses for so that you could work, this credit is for you! Also if you have a dependent that is incapable of self-care, the expenses you paid for them qualifies as well.

  3. Child Tax Credit - Do you have a qualifying child? This credit can be claimed in addition to the Child and Dependent Care expenses.

  4. Retirement Savings Contributions Credit - Contributing to your
    retirement has benefits you can enjoy before you actually retire with this credit!

  5. Credit for the Elderly and the Disabled - This credit is specifically designed for those over 65 with nontaxable income such as Social Security, annuities, and disability.

  6. Education Credits - There are two main education credits: A. American Opportunity Credit - This is applied to the first four years of post-secondary education and qualified education expenses. B. Lifetime Learning Credit - This covers a fuller range of education that is pursued for undergraduate, graduate, or professional degrees and even courses to further job skills.

Michigan

  1. Home Heating Credit - This credit was created to help support heating costs. It can be applied for independently and does not have to be done through the state return.

  2. Homestead Property Tax Credit - This applies to both renters and home owners, it helps offset property taxes you pay throughout the year.

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Why CFED Believes in Financial Capability for All

Posted by mlulion on 04/01/2015

By Katie Griffin

Here at CFED, we have a profound belief in the human spirit. It’s written in our vision: “Given a reasonable opportunity, CFED believes every family can save, build assets and create a more prosperous future for themselves and their children.” A crucial ingredient in achieving this vision is providing opportunities for families to build financial capability, defined as having financial knowledge, practicing financial skills and accessing financial products. These strategies provide on-ramps for families to get on the path toward saving and building assets.

For families with low incomes and few or no assets, there is little room for error. By working together with families to make good financial decisions easier, financial capability practitioners are setting families on a path to financial security in the long-term. Here’s what that looks like in practice:

The moment when you’re about to make a financial decision is the single most important time to have information, advice and financial products in front of you. Let’s say your neighbor is struggling to pay the bills this month and is making a decision about whether to let the electric bill slide, pay a small amount towards all the bills or head to the payday loan shop down the street to get a lump sum that will help her get out from under the stress of paying bills that month. What information does she have about all of her options? Who does she trust to talk over this decision with? Are there other, better products that could help her, and does she know about them? The ability for service providers to intervene in that moment—with a better product for her needs and/or with trusted advice that she is more likely to follow—is financial capability at work.

Every time you make a financial decision, it’s practice for the next one and the one after that. Exercising knowledge to make decisions is what turns knowledge into skills and skills into habits over time. If your neighbor gets some trusted advice and taps into a better financial product than a payday loan to keep her lights on, it will influence the way she decides next month how to handle her bills. She may know more about other options, or she may have built trust in whomever guided her to that decision. If it went well, she has gained confidence in her own ability to make good financial choices. She is now more likely to use that knowledge the next time she needs to make a financial decision, such as what to do with a financial windfall at tax time. When she is less stressed about paying bills, she has more bandwidth to think about the future and may return to that trusted advisor to plan for emergency savings or a downpayment for a home. These financial capabilities she is building will take her ever closer to saving and asset ownership—and build her own confidence in her ability to get there on her own.

When you build financial capability over time, you experience financial well-being. The Consumer Financial Protection Bureau recently released their definition of financial well-being, which shows us that this concept of financial wellness is very subjective. How you feel about the state of your finances, your ability to make good financial choices (regardless of actual income level or dollars in a savings account) and your capacity to absorb a financial shock are all integral to achieving financial well-being. As we think about financial well-being in these more subjective terms and apply the concept to our work, we believe more people will see financial capability strategies as a key stepping stone to financial well-being.

In order for you to build financial capability over time, advice and products need to be available wherever you are making decisions. From early childhood through old age, people make financial decisions. Parents must choose whether and how to start financial habits with their children very early on. Students must pay for postsecondary education. As youth move out of from their parents’ homes and start households of their own, they must learn that credit scores matter and rent needs to be paid on time every month. Older adults must learn to navigate fixed incomes, and some will even find themselves parenting again when grandchildren come back into their lives. All of these and more are financial decision-making moments where we can embed conversations and products that help people make better choices. Trusted advice and access to financial products need to be embedded in schools, in workplaces, in communities and at pivotal moments in people’s lives, such as leaving home for the first time, renting a new apartment, getting a new job, having a child, paying taxes or even seeing a new health care provider. We are beginning to see the power this can have—to have an integrated, tightly woven network of ways to meet people where they are.

What are the strategies we see organizations deploying? And how do we know which strategy to use when? Tomorrow, the Department of Health and Human Services’ Administration for Children and Families (ACF) and CFED are launching an amazing resource for the field, Building Financial Capability: A Planning Guide for Integrated Services. It outlines ten key financial capability strategies, such as financial coaching and counseling, credit building, and asset ownership. It also helps organizations determine which services to deploy to their clients, how and when.

Ultimately, deploying these strategies at the right time and in the right place will enable people to build habits that will lead to a more prosperous future for themselves and their families. Over the month of April, National Financial Capability Month, we’ll be introducing a range of resources, ideas, examples, data and tools from the field that will highlight these concepts. We look forward to engaging with all of you in this dialogue.

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Volunteer Tax Preparers Offer Valuable Service

Posted by cspohrer on 04/01/2015

Tags: VITA, CAPSAW, Virginia

Written by Emily Cox, community engagement coordinator at Community Action Partnership of Staunton, Augusta and Waynesboro (CAPSAW) Valley VITA. She recently wrote this piece for the Staunton Virginia NewsLeader.com

A typical Tuesday evening in March at Stuarts Draft High School's media center is deceptively quiet and calm. But the work of the Volunteer Income Tax Assistance program (VITA) is already well underway.

With handfuls of financial documents clients come – the young, the elderly, the immigrant family with a young son as a translator, the couple with a child or two in tow – all relieved to find someone who can help them untangle their tax return and get them the best refund possible through the Earned Income Tax Credit and Child Tax Credits. And the best part is that this service is completely free to households earning less than $53,000 in 2014.

This has been a record setting season for Valley VITA, now in its fifth year of providing free preparation of federal and state tax returns to households making less than $53,000 a year. The program was created specifically to help individuals and families claim their Earned Income Tax Credit and Child Tax Credits.

Locals who help have many different reasons for volunteering. Some are retirees with time on their hands who want to give back to the community. Some are Mary Baldwin students, earning credit for a business course taught by Professor Janet Ewing.

Winter weather has made it difficult to keep sites open as scheduled, but volunteers and clients have taken it all in stride, rearranging appointments as necessary to accommodate closures and clients' busy schedules. Even with site closures, as of early last week, over 300 hours in volunteer time have been donated resulting in the filing of 397 Federal returns, saving clients $79,400 in tax preparation fees and generating anticipated federal refunds of over $534,000.

Those refunds come back to the local economy in the form of rent and bill payments and other spending by clients. Many clients use their refunds to pay medical bills, save for college, and a few even report they will use the money to start a new business.

This season has been different from past years due to the Affordable Care Act. ACA regulations have extended the amount of time it takes volunteers to prepare a return, with much of this time spent educating taxpayers on what the ACA means for them. Recent reports of tax preparer fraud surrounding the ACA highlight the importance of a service like Valley VITA, where volunteers are trained by the IRS and sign a code of ethics before being certified to work with clients.

This year, advocates from Enroll Virginia are joining forces with VITA to offer clients information about the Healthcare Marketplace and options for those who may fall into the gap between Medicaid and the Marketplace. At each of the four VITA sites, a representative from Enroll Virginia is available to counsel taxpayers on what may be best for them in securing health care coverage.

With so many benefits and resources available to clients, Valley VITA continues to be a vital service in helping boost the economic security of the community. For more information, call 221-1654 or visit Valley VITA on Facebook.

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Apps to help you save!

Posted by jware on 03/27/2015

Tags: apps, savings apps, savings tools

"Rounding up savings"

By Joseph Pisani

Appeared in the Dallas Morning News 3/27/15

Published: 26 March 2015 07:39 PM Updated: 26 March 2015 07:39 PM

NEW YORK — Sit back, relax, and save some money. Two mobile services are making it easier to build your savings without giving it much thought.

Acorns and Digit automatically transfer small amounts from your checking account to a savings or investment account. They’re an option for consumers to do what financial planners have advised for years: Build your savings through automatic transfers.

I tried both Acorns and Digit for about two weeks and found they are easy to use and have the potential to build up some significant savings over time.

Of course, it’s not difficult to set up a weekly or monthly transfer to an online savings account. But both services are targeting the under-35 crowd, who are less likely to save on their own.

Acorns has grown to about 250,000 active users since its August launch, the company says. Digit, which launched in February, declined to say how many users it has but expects them to save a collective $1 million in March.

Here’s how they work:

ACORNS: To use Acorns, individuals link their debit or credit cards to an app that automatically rounds up every purchase to the nearest dollar. The amount is invested in a portfolio of stocks and bonds.

Rounding up purchases can add up quickly, especially if you mainly use cards instead of cash, like I do. A $26.34 supermarket run, for example, resulted in 66 cents being moved into my Acorns account. In two days, Acorns saved me $7.30. The average user saves about $55 a month from roundups, says co-founder Jeff Cruttenden. Users can also manually transfer cash or set up recurring deposits.

The savings are invested in exchange-traded funds, which are a basket of stocks or bonds that trade on the stock market. Every portfolio is made up of six ETFs that offer a range of investment options, from conservative to aggressive. Accounts are insured by the Securities Investor Protection Corp.

The app has graphs that enable you to see how much money you can accumulate. For example, a monthly deposit of $55 into an aggressive portfolio can grow to $10,438 in 10 years.

Acorns charges $1 a month for accounts under $5,000. For accounts over that amount, it charges 0.25 percent a year, which comes to about $2.08 a month for a balance of $10,000. There are no fees for withdrawing money and no minimums.

DIGIT: The best part about Digit is its ability to calculate how much to save from day to day. After connecting a checking account to Digit, its algorithm analyzes account activity to determine how much you typically earn and spend. Based on its findings, it periodically transfers small amounts into a Digit account.

My first savings deposit was for $1.57. Not much, but it was a start. Over two weeks, Digit saved me a total of $3.61. I don’t keep much money in my checking account, so that explains the particularly small amount. For the average Digit user, deposits are about $18 every two to three days, says founder Ethan Bloch. That can add up to more than $2,000 a year.

Digit guarantees its transfers won’t cause payments to bounce. If that happens, it will pay overdraft fees. The automated withdrawals can be turned off at any time, and cash can be manually transferred to the Digit account.

Digit requires you to sign up on its website, digit.co, and then all banking is done through text message. I’m used to banking within apps, but I found texting to be simpler. There’s a list of commands, like “savings” to see your balance or “withdraw” to make a withdrawal. If you plan to try Digit, make sure you have unlimited texting to avoid extra wireless charges.

Digit doesn’t charge any fees, and transfers are quick; withdrawn amounts hit my account the next day.

The downside is that users will miss out on earning interest. Digit places its users’ deposits in accounts with Wells Fargo and BofI Federal Bank, and makes money from the interest on those accounts. Like any bank, the accounts are insured by the Federal Deposit Insurance Corp.

BOTTOM LINE: Acorns is better for people who want to start investing in the stock market but don’t have the cash to open an account at a big investment bank or want to avoid high fees. Digit is best for those who are not saving enough and need help figuring out how much they can afford to save.

Joseph Pisani,

The Associated Press

http://www.dallasnews.com/business/personal-finance/headlines/20150326-saving-made-simple-services-that-stash-cash-automatically.ece

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