Money As You Grow

Money and financial matters can be difficult to discuss, especially with your children. To help you get started, check out this great online tool, Money As You Grow. This tool was developed by the President's Advisory Council on Financial Capability. It provides 20 age appropriate financial lessons along with activities to help put the lessons into practice.

For example, a lesson for a 3 to 5 year old is that "you earn money by working." An activity that may help you child understand this concept is to walk through  your neighborhood and point out different jobs that people are doing.

The main objective of this tool is to improve the financial capability of young Americans. Families can use these lessons and activities to start a conversation with their children about money and to teach kids the importance of saving, making choices, and avoiding debt.




After checking out this overview of the 20 financial lessons to kids to learn as they grow, be sure to check out the website to take advantage of the various activities you can do to help these lessons stick.

http://moneyasyougrow.org/#

10 Ways to Improve Your Financial Health

Trying to improve your finances? In “10 Ways to Improve YourFinancial Health,” TIME Moneyland offers 10 ways that you can get a start on rebuilding those finances.

1. Grow Your Emergency Fund

In these times of high unemployment rates, you should shoot for an emergency fund with 6 months worth of savings instead of the traditionally recommended 3 months. The key is to be able to manage emergencies from savings rather than having to liquidate your retirement account or relying on a high interest credit card. Jim Wang, a blogger from Bargaineering.com says, “Trying to resolve an emergency with a credit card can lead down a dangerous path of debt.”

2. Pay Off Credit Card Debt

Tom Gilovich, a psychology professor at Cornell University and coauthor of Why Smart People Make Big Money Mistakes says you should use your existing savings to pay off or pay down credit card debt. With current credit card APRs averaging around 15%, people with credit card debt pay more in interest than they can earn with that money invested elsewhere.

3. Put 10% of Your Income Toward Retirement

No matter how much or how little you make, it’s a good idea to stick to this rule. If you start saving and investing $5,000 a year when you’re 25 years old and earn a 6% rate of return, that money will have grown to $773,809 by the time you are 65!

4. Pay Off Your Mortgage Before Retiring

Richard Thaler, behavioral economist at University of Chicago says, “The term of your mortgage should not be longer than the number of years you plan to work.” After retirement, your income will probably drop but your cost of living won’t. If you can eliminate your monthly mortgage payment, you’ll have more flexibility to handle other costs that will probably increase in retirement, such as health care.

5. Track Your Spending

You’ve probably heard this tip before, but have you put it into practice? Gail Cunningham says, “It’s a basic building block of financial success.” New Century IDA participants take a budgeting course in which they learn the importance of tracking all of their expenditures. It helps them find areas in which they can cut back.

6. Envision Your Future

Don Chambers, author of MoneyBasics for Young Adults, says you should develop a mental picture of where you want to be in five years. This will be great motivation for sticking to your financial plan.

7. Improve Your Credit Score

Did you know that maintaining a score of 750 or higher can improve your finances? “A higher score will get you lower interest rates and lower interests can save you hundreds of thousands over your financial lifetime,” says Elisabeth Leamy, author of Save Big. The potential for savings is even greater when it comes to home mortgages. This is why New Century IDA participants work so hard to improve their credit score in preparation for homeownership.

8. Live Below Your Means

We’ve all heard this phrase: “Just because you can afford to buy something, doesn’t mean you should.” If you get a raise, maintain your former standard of living and funnel the rest into paying off debts or adding to your retirement savings.

9. Act Like You Can’t Just “Throw It Away”

Kerry Taylor, blogger at Squawkfox.com says, “If you act like you can’t just throw stuff away, it will make you more mindful about what you buy and consumer in the first place.” Switch to buying quality items that will endure.

10. Move Your Money Around

Carmen Wong Ulrich, cofounder of ALTA Wealth Management recommends redirecting money from one part of your financial life to another part that may be more profitable.

These are some great tips to help you get started on your path towards improved financial health. Maybe just pick one or two to focus on at first, then as you feel comfortable with your new financial habits, add more of these tips to your list. Do you have any of your own tips to add?

Pay Down Debt or Save?

This is a dilemma that many Americans face: Is it better to pay off debt or to save and invest? A recent article from 360 Degrees of Financial Literacy outlines some strategies that you might want to consider as you ponder this question.

The most common factor used to decide where to pay off debt or make investments is to determine if you could earn a higher after- tax rate of return on the investments than the after- tax interest rate on the debt if you were to invest your money instead of using it to pay down debt.

Here is an example provided by 360 Degrees of Financial Literacy. If you have a credit card with a balance of $10,000 and a nondeductible interest of 18%, you would generally need to earn an after-tax rate of return greater than 18% to consider making an investment rather than paying off the debt.

It is important to remember that it isn’t always an all- or- nothing choice. Another strategy that is useful is to pay off debts with high interest rates first. Then, invest when you have an opportunity to make investments that may earn a higher after- tax rate of return than the after- tax interest rate on your remaining debts.

For example, say your tax rate is 28% and you have a credit card with a balance of $10,00 and a nondeductible interest rate of 18% as well as a mortgage with a balance of $10,000 and a deductible interest rate of 6%. If you have $20,000 available to invest or pay off debt, you should pay off the credit card first and invest the remaining $10,000.

It is also important to remember that when you are investing, the higher the rate of return generally means the greater the risk. So if your investments incur losses, you may still have debt to pay.

Click here to read the full article and for a more comprehensive list of things you should consider when you are deciding whether to pay down debt or save and invest.

Avoid These Mistakes When Planning for Retirement!

New Century IDA promotes savings and asset building. While homeownership is the main avenue we use to promote savings and asset building, there are many other reasons that saving is important. One of the most crucial reasons for saving is retirement.

A survey conducted by the Employee Benefits Research Institute found that only 14% of adults are confident that they will live comfortably after retiring, and 60% of adults ages 25 and over have less than $25,000 in savings. Not saving enough is the biggest mistake people make in planning for retirement. This is understandable if you are unemployed or underemployed. However, Dan Kadlec recommends that if you are working, you should save at least 10% of every paycheck.

If you are just in your 20’s or 30’s, you might think it’s a little too soon to start to thinking about retirement. In reality, it’s never too soon. In the article “The 7 Biggest Retirement Planning Mistakes” Dan Kadlec details mistakes to avoid.

1. Assuming you have control over when you quit. Two in five people retire earlier than planned, for various reasons such as job loss or illness. It’s critical to start saving early, while your health and career are on steady footing.

2. Ignoring the tax impact of distributions. In retirement, it’s helpful to have several different types of income, from fully taxable to tax deferred (401K) to tax-free (Roth IRA). That will give you more flexibility when drawing down assets.

                          

3. Not saving enough for medical costs. The average couple retiring at age 65 will spend $285,000 in health-care costs in retirement. Even for retirees on Medicare, out-of-pocket health care expenses have increased by 50% in the past decade.

4. Failing to lock up lifetime income. It is a challenge for today’s retirees to convert savings to a reliable income stream so that they will be able to cover fixed expenses for life. An immediate fixed annuity is a good way to address this need.

5. Retiring too soon. If you are healthy, try to wait until you are 70 to retire. You may not know this, but working a few extra years can boost your retirement income. Social Security benefits increase about 8% for each year you wait to retire past normal retirement age (66 for most Americans).

6. Underestimating longevity. About 60% of Americans live longer than they expect. At age 65, women live to an average age of 84; men live to an average age of 81.

7. Drawing down retirement savings too rapidly. You don’t want to outlive your  money. Keep your annual drawdown rate to 4% of your assets. At this rate, if you being making withdrawals at age 65, you should income until age 95.

As you think about saving and planning for retirement, keep this list in mind so you can avoid the mistakes that many people make. And remember, it’s never too early to start saving!

The Generational Wealth Gap

If you graduated from college in the last few years, then you know how tough the job market is. Young adults have been among the hardest hit by the Great Recession. This generation, commonly referred to as “millenials,” have faced one of the worst job markets since the Great Depression. Many struggling graduates have been forced to take part- time jobs or jobs with uncertain futures. As a result, their ability to build wealth has diminished.

In recent years, there has also been a large increase in "boomerang kids" or young adults who live at home. Many are forced to live at home out of financial necessity. According to Pew Research Center as many as 3 in 10 young adults now live at home. In 1980, only 11% of young adults lived at home. Now, nearly 30% of 24 to 34 year old adults live at home.

All of these factors have contributed to the generational wealth gap: older Americans continue to gain wealth while the net worth of younger Americans is decreasing, which David Francis writes about in his article, “The Far- Reaching Effects of the Generational Wealth Gap.”

The Pew Social and Demographic Trends Report found that the average net worth of people under age 35 decreased from $11,521 in 1984 to $3,362 in 2009, a 68% drop. Compare that to an increase of 42% in average net worth among people 65 and older during the same time.

Paul Taylor, executive vice president of the Pew Research Center, says that the inability of young people to build wealth has resulted in a nationwide case of arrested development. Young adults who cannot find work are returning home and opting not to get married. “These are patterns that are decades in the making and they were accelerated by the bad economy,” Taylor says.

You may have heard the term “funemployment” used to described this time in young adults’ lives. Funemployment is defined as “a happy time in one’s life when one is not employed and not wanting to be employed.” However, this is not an accurate portrayal of the current economic climate. Most young adults would like to find a decent job but graduated during a time with a gloomy employment outlook. When they do find jobs, they are less willing to take risks, and they value security.

Can you see effects of the generational wealth gap in your household? What challenges have you faced as it has become more difficult to find employment?

Congratulations, Wave 29!!

Congratulations to Wave 29, who graduated from New Century IDA Tuesday, March 27. It was a great evening for all involved. You can see the excitement in the pictures below.

Wave 29 Graduates

These kids came to celebrate with their parents.
They are all excited about moving into their own home!

Thanks to our sponsors:
 Francine Taylor from Southern Community Bank
and Dee Oliver from Allen Tate Realtors!

Throughout the evening, graduates celebrated their achievements. It required hard work and determination for each of these individuals to complete the financial literacy curriculum and to graduate from New Century IDA. They were all reminded that this is not the end but just the beginning. As they begin looking for homes over the next few months, they will have to keep practicing what they learned in the IDA program. Most importantly, they will continue to budget and save! 

It was a great night, and we look forward to celebrating with each of these people again when they close on their homes!

To share in the excitement of the evening, watch Twana Roebuck, Executive Director of ESR, deliver closing remarks and cheer on the graduates!

Tips for Avoiding Foreclosure

New Century IDA teaches people to budget and save in preparation for putting a down payment on a home. But it doesn’t stop there. New Century IDA wants each of its graduates to be prepared for not only purchasing a home, but for being able to stay in that home and maintain it. If you start having problems making your mortgage payment, it is important to be proactive and utilize the resources that are available to you in order to avoid foreclosure.

If you are having trouble making your mortgage payment, remember the following tips provided by New Century IDA.

1. Don't ignore the problem.

• The further behind you get, the harder it will be to reinstate your loan.

2. Contact your lender as soon as you realize that you have a problem.

• Lenders have options available that can help borrowers through difficult financial times.

3. Open and respond to all mail from your lender.

• The first notices you receive will offer information about foreclosure prevention options.
• Later mail may include notices of pending legal action. Failure to open mail is not an excuse in foreclosure court.

4. Know your mortgage rights.

• Review your loan documents so you know what your lender may do if you can't make your payments.
• Learn about foreclosure laws and time frames in your state by contacting the State Government Housing Office.

5. Understand foreclosure prevention options (aka loss mitigation).

6. Contact a HUD- approved housing counselor.

• HUD funds free or low- cost housing counseling nationwide.
• To find a HUD- approved housing counselor near you call (800) 569-4287 or (800) 877-8339.

7. Prioritize your spending.

• After healthcare, keeping your house should be your top priority.
• Review your finances to see where you can cut spending.

8. Use your assets.

• Do you have assets you can sell for cash? Can you get an extra job?
• Demonstrate to your lender that you are willing to make sacrifices to keep your home.

9. Avoid foreclosure prevention companies.

• You don't need to pay fees for foreclosure prevention help!

10. Don't lose your house to foreclosure recovery scams!

• If a firm claims that they can stop your foreclosure immediately and you can sign a document appointing them to act on your behalf, you may actually be signing over the title to your property.
• Never sign a legal document without getting the advice of an attorney, real estate professional, or a HUD- approved housing counselor.

Exciting Day for New Century IDA!

Yesterday was a great day for New Century IDA. We had two closings yesterday afternoon! Closings are always exciting for New Century IDA and its clients.

Tasha Adams and Tisha Shaver both closed on their homes. For both of these women, closing on their home meant they had achieved their goal of homeownership. This is a great accomplishment, and one that took determination and dedication. Tasha and Tisha both had to complete 24 hours of financial literacy courses and 8 hours of homeownership training as well as pay off debts and raise their credit score in order to prove that they were ready for homeownership.

Tasha and Tisha both proved that they were up to the challenge! At their closings today, they were both surrounded by people from the New Century IDA team to help celebrate the occasion.

Jackie Baldwin, the IDA success coach, was there from Experiment in Self Reliance as well as Bianca Green, a loan officer from Forsyth County Department of Housing.

Dee Oliver from Allen Tate Real Estate was also there. Dee was the realtor for both Tasha and Tisha. As a sponsor for IDA classes, Dee gets to know IDA clients. She can help them find a house that is affordable for them but that also fits their needs.

Tom Jacobs from Hinshaw and Jacobs was the attorney for the closings and is always able to make the closings run smoothly and efficiently for IDA clients!

New Century IDA is grateful for all of these partners that help turn the dream of homeownership into a reality. Congratulations to Tasha and Tisha. Your hard work has paid off, and you are officially homeowners!

Check out the pictures below to share in the excitement!

Tasha signing the papers!

Tasha with her success coach, Jackie Baldwin, and her realtor Dee Oliver.

What a great smile! Tisha is closing on her home!

Tisha with her loan officer Lisa Wright, success coach Jackie Baldwin, and realtor Dee Oliver.

If you or someone you know is interested in applying for New Century IDA, check out the application and call 336-722-9400 x. 410 with any questions.

What Does It Mean To Be Poor?

What do you think of when you think of being “poor”? In his article “Working Poor,” Alexander Eichler talks about what it means to be poor.  If being poor is defined as living at or below the poverty line, then 15% of Americans- or about 46 million people- are poor. But if being poor is defined as living off a decent income but hardly any savings, then it is  nearly half the country. These are people that do not live below the poverty line, but they don’t have enough money saved to weather an emergency.

Jennifer Brooks, director of state and local policy at the Corporation for Enterprise Development, said, “The resources that people have- they are using up those resources. They’re living off their savings. They’re at the end of their rope.”

The Corporation for Enterprise Development released a report this week regarding liquid asset poverty households. According to the report, 43% of American households are liquid- asset poor. This means that if one of these households experiences a sudden loss of income, it would fall below the poverty line within three months.

The amount of people living asset poor underscores the effects of a struggling economy. Even though the Great Recession officially ended over 2 years ago, unemployment remains high and wages have remained stagnant.  However, you can receive a monthly paycheck and still be liquid asset poor.

David Rothstein of the nonprofit Policy Matters Ohio says that many people don’t realize how close they can be to one interruption to income or one interruption to health benefits. “They’re one paycheck away from being in debt.” Many Americans are not prepared for financial emergencies.

CFED suggests that while more intensive financial literacy is important in addressing this problem, it is also important to look at asset limits in public benefit programs. Some states restrict services like food assistance to households with few or no assets. Critics say that these policies deny help to many people in need. In a state with restrictive asset tests, a middle class family that faced a job loss would have to liquidate all of their assets and savings in order to qualify for benefits.

CFED suggests other measures that could help alleviate liquid asset poverty, such as strengthening consumer protections against payday lenders and making greater assistance available to first time homebuyers.

New Century IDA is proud to be involved in asset building by offering financial education and down payment assistance to first time home buyers in Forsyth County. What ideas do you have for eliminating asset poverty in our area?

Assets and Financial Security

Do you know what assets are? It turns out they are essential for financial security. The report “A Prosperity Grid for North Carolina: Connecting Households and Communities to Economic Prosperity” released by the North Carolina Assets Alliance is helpful for understanding what assets are and the significant impact they have on our families and communities. The report defines assets as resources that generate a financial return. A savings account, college education, a home, retirement savings, or a small business are all examples of assets. Having assets helps families survive tough financial times, plan for the future, and pass on resources to the next generation.

The impact of having assets extends beyond income. They are also important for achieving important economic, educational, health and developmental incomes. They are linked to social  well-being and civic engagement, health and psychological well-being and child well-being. For example, children raised in households with assets are less likely to drop out of high school and have higher educational expectations. Assets are also related to lower mortality and better health outcomes such as increased childhood immunization and improved nutritional status. Children raised in households with assets are more likely to reach key cognitive development outcomes,  maintain improved physical health, and reach key social-emotional development milestones such as having higher self-esteem.

The North Carolina Assets Alliance estimates that 22.5% of households in the United States and 17.5% of households in North Carolina are living in asset poverty, which is “a measure of whether a household can support itself with savings or available assets at the Federal Poverty Level for three months if earned income was lost.” This is of real concern because households living in asset poverty are especially vulnerable to economic downturns and are at a higher risk for losing their middle class status once reaching it.

The New Century IDA has long realized the importance of assets. As stated on our website, the purpose of the New Century IDA program is “to promote personal, economic and financial self-sufficiency by the creation of wealth through asset building, reducing debt, promoting savings, improving credit and development of economic literacy skills.” Through guidance, education, and asset building, New Century IDA helps people in our community break the cycle of poverty and sets them up for success. The financial literacy skills gained through this program are invaluable. If you are trying to break the cycle of poverty in your family or community, partner with New Century IDA today!

IDA Success Stories: Ms.T

Ms. T, a mother of three, was already enrolled in the IDA program when disaster struck. One afternoon she received a call that a fire had destroyed her apartment and all her belongings. To her get her family back in order, Ms. T was enrolled in the Self-Sufficiency Program through the Experiment in Self-Reliance. This program could assist with payment of utilities so she could focus on using her earned income for her IDA payment and rent. Ms. T was moved to another apartment and continued to work. Although the Self-Sufficiency Program was there to support her, Ms. T insisted on providing for her family with her own income.

Soon after her move, Ms. T lost her employment. Undaunted, she continued to search for an alternative. She was able to find employment cleaning homes, making just under $200 per month. Despite this hardship, she kept a positive attitude and continued to make her IDA deposit monthly. Ms. T was determined to find better employment, and applied for several jobs. After a number of interviews, she was offered and accepted a position with Bell South. With her increased income she was able to save above the $1,000 required by the IDA program.

After experiencing much heartache, Ms. T was able to achieve her dream on May 8^th, 2001. On that date, Ms T closed on her first house, and is looking forward to making it a home for her and her children.

An Interview with IDA Partner Sylvia Neely

What does the Housing Authority do for this community?

The Housing Authority of Winston-Salem’s (HAWS) mission is to create and maintain sustainable communities through partnership to benefit the residents of Winston-Salem. The vision of  HAWS is to create a self-sustaining affordable housing and real estate development organization.  The Section 8 Housing Choice Voucher Program is a subsidy assisted housing program that provides adequate, affordable, viable, quality housing, and community supportive services emphasizing self-sufficiency for low and moderate income families. 

What is your role with the organization?

My position at the Housing Authority of Winston-Salem is the Family Self-Sufficiency  (FSS) Coordinator.  My role is to coordinate resources and services for Section 8 Housing Choice Voucher Program families through the public and private sector to enable assisted families to achieve economic self-sufficiency.  The objective of the FSS Program is to reduce the dependency of low income families that are receiving public assistance such as welfare assistance, Section 8, or any other local rent or homeownership program.

The FSS Coordinator will try to provide the resources and services that are listed in the program family’s Individual Training and Service Plans by linking them to resources, services, and economic opportunities that will lead to employment, economic self-sufficiency and homeownership.  A Program Coordinating Committee is formed by the FSS Coordinator to obtain commitments from service providers who will perform the hand-on services to the FSS participating families.  The FSS Coordinator will monitor the progress of the participant’s plan, and establish an escrow account for them once they have obtained an increase in earned income while trying to complete all other goals listed in their Individual Training and Service Plan.   It is the FSS Coordinator’s responsibility to see that the family is paid the balance in the FSS escrow account upon successfully completing their Contract of Participation. 

Why did you become a part of the IDA Program?

Since 75% of the Section 8 FSS participants have a final goal of purchasing a home through the Section 8 HCV program or purchase homes on their own without Section 8 subsidy, HAWS has partnered with the New Century Individual Development Accounts Program to assistant in providing pre-post homeownership training, financial economics, and down payment assistance to our participants.  I highly recommend this program, even though it is optional for them to enroll in the IDA program.

How have you personally seen this program benefit people and the community?

I have personally seen the IDA Program benefit people and the community by providing a match of $3,000 or $2,000 to the client’s $1,000 saved out of pocket. It is required that the IDA clients save at least $1,500 in which it allows them to have some money left in reserve since most lenders require homeownership applicants to have money left in reserve, and they are not using all of their money for down payment.   Also, it benefits the low and moderate income community in purchasing a home, since most of them have a limited amount of income, and wouldn’t qualify on their own to purchase a home since they would have to come up with at least 3% - 5% in down payment assistance. The program also benefits clients in budgeting and credit repair.  The coaches, are beneficial in keeping clients on track of becoming mortgage ready.   If it wasn’t for the IDA program there will be less homeowners in the community.

The Housing Authority of Winston-Salem’s (HAWS) mission is to create and maintain sustainable communities through partnership to benefit the residents of Winston-Salem. The vision of  HAWS is to create a self-sustaining affordable housing and real estate development organization.  The Section 8 Housing Choice Voucher Program is a subsidy assisted housing program that provides adequate, affordable, viable, quality housing, and community supportive services emphasizing self-sufficiency for low and moderate income families. 

IDA Success Stories: M.M.

Had I been asked to write this success story two months, I would still have a lot to say, and a whole lot more time to say it. I didn’t have house then, but thanks to the IDA program I had already accomplished two things I thought I’d never.

The first was not spending money on things I didn’t need. For years the use of credit cards were my biggest temptation and downfall. The IDA program helped me distinguish between things I needed and things I wanted. Learning about interest rates on credit cards made me realize that the now broken VCR I charged 11 years ago actually cost me $600 dollars. The closet full of clothes I charged (now all too small) cost me four times the good bargain I thought I had found, and with all the money I charged for meals at fancy restaurants (that led to the clothes being too small), I could have almost bought my own restaurant! I was happy to cut the cards up.

Getting rid of them helped lead me to the second accomplishment – saving money. One of the main principles of the IDA program is saving money. And I was able to do it! Believe me, pre-IDA, no bank account of mine had ever seen a four digit balance for more that a couple of days!

That leads me to why I’m short on time today. When my savings account hit $1,000, Sue Simmons told me to start looking for a house. So I looked. And I looked. I looked at houses too small and at houses too big, houses with no closet space, houses with no counter spaces; ugly wallpapered walls, hideous carpeted floors. Until one day, my real estate agent drove me into a perfect driveway that led to a perfect house! I asked her to write the contract to make a bid on it right away.

In a blur, my loan was secured, the house was inspected, and the lawyer was contacted. And at closing, there sat Sue Simmons, along with Mr. Stewart from ESR, providing support and encouragement to the very end, not to mention the checks they passed to the lawyer on my behalf! It was all so simple, and I am so very thankful.

Today, I’m in my home with a garage full of junk waiting to be put away. And every night, I get down on my knees to thank God for that garage and the house to which it is attached, for my family and for the IDA program.

Saving for Repairs and Upkeep of Your New Home

Written by:

Barbara Johnson, IDA Program Director

Experiment in Self Reliance

In today’s economy how do we make repairs to our homes or even maintain and keep them up?  I’ll tell you by planning ahead and using a budget. Some may think of a budget as restrictive but a budget is really a wonderful and useful tool. For example what if you need to purchase a lawnmower before next spring and it is going to cost you $550 if you plan to purchase it in March you have 10 months to save for it @ $55 a month. When March comes around you already have the money to buy your mower. This is a painless way to acquire the things you need and those things you want also. We do not eat an apple in one bite why try to tackle big expenses that way. Wouldn’t it be better to take on expenses like we eat an apple one bite at a time?





From Client Turned Success Coach, the Story of New Century IDA Success Coach Jackie Baldwin

To the single mom, single dad,  the couple, to the young, & the old whom desires to be a homeowner: IDA is the doorway to a new beginning. ~Jackie Baldwin



ESR/IDA Success Coach,
Jackie Baldwin

 Ms. Baldwin was a client of Experiment in Self Reliance’s (ESR) Self Sufficiency Program, and a yearly participant of ESR’s EITC tax program when she gained knowledge of the New Century IDA 1^st time Homeowners program, and immediately looked into it and applied. One of her dreams has always been to become a homeowner, but she thought this was something she needed a husband for; dual income. Despite her preconceived notions of needing a husband in order to buy a house, she excitedly applied and in December 2007, she became a proud homeowner. She is now also an employee of ESR’s team as an IDA Success Coach, who helps countless clients achieve their dreams of homeownership.

Jackie has always prided herself in taking care of her household, while raising her three teenage daughters.  Even prior to IDA participation, she believed in paying rent on time and maintaining her credit. She came into the program with minimal debt and no collections. She had the support of IDA, her daughters, and her friends and family to assist in the process of making this dream come true.

When she sets her mind to something, she follows through. “I didn’t talk about it,” said Jackie, rather she “dug heels in, and set the calendar to accommodate the new schedule of  the IDA curriculum, and to soak up all the knowledge and education they were offering.” Even though Jackie already had good credit and was paying her bills on time, she learned a lot about credit and homeownership through the economic literacy classes. She wanted to know not only how to get into a house, but how to stay in it as well. The financial literacy classes and the monthly required meeting with her success coach were the required tools for people in all stages of credit and savings. Simply said, IDA fully equips one for what is needed to know about purchasing a home. For Jackie, each class brought her closer to her dream and her “ears were ringing with excitement.”

Jackie attended Financial Literacy classes and meeting with her success coach, in addition to being a full time mom, full time employee, and attending evening and weekend college courses at Winston-Salem State University. “It was a plateful”, she explained, but this was her and her children’s dream and she was going to accomplish this. She had the determination and peace of mind to persevere and reach her dream of homeownership. When praised for her determination and success, she immediately points out that there are so many people that have done this before her so she knows that she can also obtain her goal as well.

Although she described her journey as exhausting, she was realistic throughout as she incorporated exercising and changing her eating habits to be able to withstand all the tasks at hand. Ms. Baldwin has a strong belief system, and as a believer she also makes time for church and prayer. Her relationship with Christ was and remains her strength. She relied on friends and family heavily to help with her children. She spoke of how she  mothered  her children over the phone, giving advice and listening to a little sibling rivalry in between classes. Fortunately her girls were as focused on schooling as she was. They were great students and were a great encouragement to her as well, challenging her to make Dean’s list as they made honor roll.

Successful graduates of the program time and again share how they involved their children in the home-buying process. Jackie explained that it has a “trickle down” effect within the family.  By including her children in this process, she put the ball in their hands by reminding them that “they” were buying a home and change had to take place with everyone. With her family, they each sacrificed by not eating out, and doing each other’s hair and nails. She asked them, “How are we going to achieve this goal?” They also rented movies instead of going, cut down cable, and got over not having a summer vacation. Instead, everyone had a summer job. Cell phones were not as a necessity as they thought.  There was always the house phone. When they did decide to treat themselves they went to the discount movie theater, and used coupons to eat out. This way she laid the responsibility in their palms- “You want your own room; this is what it’s going to take.” And despite reservations of cutting some of the luxuries which they were accustomed to, such as eating at their favorite restaurants, she learned to cook those favorite meals, and she “Turned out to be a pretty good cook after all.” :)

“If you have a desire to be a homeowner, there is no better way to be a homeowner than to be an educated homeowner.”

She really loved going to class and hearing the presenters- all of the facilitators brought interesting and fresh information to help her better her life. She stayed after class and everyone always had time for her. This experience helped her build new relationships. She could ask questions and get answers, even ones she was hesitant to ask. Everyone involved with the program had an obvious commitment to help each and every one of the clients- Jackie could feel that the staff was just as excited to teach as the students were to learn.

As for classes, she was very impressed with the Psychology of Money; the viewing of money and the reducing debt; learning about debt ratio; and she really enjoyed the Investing for the Future & 401k class. She particularly liked the latter because she has always believed in saving and preparing for the future, and this class was full of helpful info and resources and connected to the way she already lived. She has always had the heart and mind of a saver, and this course helped to further strengthen her skills. The classes supported and fostered her belief that, “It’s very important to not only live for today, but prepare for tomorrow”.

The Economic Literacy classes taught her how to accurately read a credit report. She now understands that everyone has a credit history and you need to have a relationship with your credit because, as she says, “It’s a part of me, who I am on paper.”

Her family has been extremely supportive, and they are all proud of her and her achievements. Everyone has shown their support and congratulate her efforts to stick to her goal of homeownership, staying on task, and teaching them the benefits of saving, budgeting, and the power and purpose of spending. She is passing on what she has learned about the power of controlling your spending habits- first of all to her family and to her clients. This endeavor showed her young daughters that “Yes, you can do this. Dreams can be attained with a little hard work, determination, and putting things into perspective. Your paycheck may not change, but you can change your mind set, behaviors,  and thought process with spending.”

“This is something that has enhanced my life, and helping someone’s dream come true (is my favorite part of working here).”

Her motivation on her job as an IDA Success Coach is collaborating with her peers, and ensuring them that homeownership can be obtained. Her motto is: if you can pay rent, you can pay mortgage if that is your desire, so when they come in they embrace the same motto. Clients gain understanding of setting a goal and doing what it takes to achieve that goal. There is a starting gate and finishing gate, and to get through, they have to go through the ups and downs, behavioral changes, budgeting, couples coming together and agreeing to disagree, and putting their budgets and dreams on paper. Their eagerness inspires her to pour back into them what was poured into her. It gives her the greatest pleasure to attend a closing of a new homeowner; watching the excitement as they sign the papers and retrieve the keys to their new home, and seeing their dreams come true. It is absolutely priceless.

This program falls to first time homeowners who are apprehensive. Because of the economy they need to know there is safety in the IDA program. When these clients come to the lender they are educated, credit ready, and very excited. They have ongoing classes, and becoming a part of the IDA program ensures realtors and lenders ready clients.

Her words of encouragement to those contemplating applying to the IDA program, “Nervous is a good sign! It shows that you know this is a commitment, a lifelong commitment. It’s okay to be nervous. The sad part would be not to give it a try. Sad part would be to put your dream on the back burner.” And that, “A new class is starting in April, if that’s too soon, there are quarterly classes. And if you don’t have the best of credit, it’s our job to help you clean that up and get you ready to secure your first mortgage.”

IDA Programs Help the Entire Community:

Clients are taught financial literacy, resolve their credit issues, and through

homeownership forge a bond with their community. They are provided financial

education that helps break generational poverty

Local government and communities benefit from increased property taxes that goes

towards police, fire departments, and schools; helps in the creation of educated consumers.

Lenders, Real-Estate Agents, and Insurers are given access to a pool of mortgage

ready, and buyer educated clients.

Written by:

Andriana Bicanin

AmeriCorps*VISTA

New Century IDA

IDA & Asset Building Collaborative of N.C.

&

Jackie Baldwin

Success Coach

New Century IDA

Stabilizing Communities

Not everyone knows what an IDA program is, or how it can help their community. IDA stands for Individual Development Account, and they are matched savings accounts that are matched either 2:1 or 6:1. That means, for every $1 the client saves, 2, 3, 4, 5, or 6 dollars is put into the account. The end result is a downpayment for the clients dream home.

When you hear, "We help working members of our community become first time homeowners", or "matched savings account", what is the first thing that pops in your head?

A few that are at the top of the list are:
1) "What about subprime loans?";
2) "The housing market crashed, how in the world can this help?";
3) "How do IDAs work; is it just money and houses given away?"

Well, here are the answers to all those burning questions:

1) Not a SINGLE person in the history of the New Century IDA has received a subprime loan. Clients sit with the wonderful loan counselor, Bianca Green, and discuss their options. She works with and for the clients, and always has their best interest in mind. Everyone behind the scenes have the clients interest in mind.

2) Yes, the housing market crashed, but right now is the BEST time to buy a house! Builders have built homes, but they aren't selling; there are foreclosed homes that are not bought; and prices are low. If people buy homes now they are buying them at their lowest prices, and when the market is better they have the option to sell at a higher cost.

And how can this help? How does this NOT help? Families are learning the importance of savings through the financial literacy classes. I was taught my entire life, through school, how important it is to save, but that wasn't enough- I also needed to know how to save.

Financial literacy classes teach clients how to save, cut costs, and reach their dreams. When a parent is taught how to save they pass this knowledge on to their child. Their children then use this knowledge at a young age, and they live their lives saving and spending in a responsible, financially educated manner. Even those without children pass this knowledge to family and friends. As a current client said, "The IDA program is people helping people help people".

Communities benefit from the additional taxes homeowners pay that goes to the fire department, school district, police officers, and other publicly funded institutions. Buying a home is also a process. Builders are receiving pay for building homes, lenders are used for acquiring mortgages, and then there is homeowners insurance (insurance agents receive money), and the ability for the client to spend money on their house because of their newly acquired savings knowledge, and ability to responsibly spend.

Since the inception of the New Century IDA in 1999, less than 10 people have defaulted on their mortgages, and over 440 people have successfully bought houses. The default rate is far below the national average, and those who continue to own homes also continue to reinvest in their communities through savings, responsible spending, and paying their taxes.

3) IDA's are not just money and houses given away. Clients spend months going to financial literacy classes; they are required to save $1500 of their own dollars; and they meet with their success coaches on a required, regular basis.

New Century IDA clients are single parents and couples; they are young, old, and may be hesitant to buy a home because of previous credit issues, and what they read on the news about the job and housing markets.

I recently interviewed a client turned success coach. She shared her experience as a single mother who was not only attending financial literacy classes and meeting with her success coach, but she was also attending night classes at a local University- on top of working full time. This is a normal story for New Century clients. New Century IDA clients are workers, parents, couples or single, their commonality is that they are looking to grab their piece of the American Dream, and they are working very hard to do so!

When you support the New Century IDA (and IDA programs in general), you are supporting responsible economics, breaking the cycle of poverty, and empowerment of the individual and community. Everyone walks away a winner.

Click here for more information on the New Century IDA, or peruse through this blog. You can also ‘like’ us on facebook.

Click here for more information on North Carolina IDA and asset building initiatives

Also check out Asset for Independence, and the Center for Economic Development for more information on the assets movement, and how to become a part of this innovative and life changing movement.

Andriana Bicanin

AmeriCorps*VISTA

the New Century IDA, Housing Department

the IDA & Asset Building Collaborative of N.C.