Individual Development Accounts: Find Out What They Really Are!

If you have never heard of Individual Development Accounts it can be hard to grasp exactly what they are. But they are an innovative approach to breaking the cycle of poverty, and they are essential to the work of the New Century IDA program.

Individual Development Accounts are part of a nationwide movement that was fueled by research done by Dr. Michael Sherraden.  His extensive research concluded that with guidance and support, people living in poverty will save money. Dr. Sherraden has said, “You can’t spend your way out of poverty, but you can save your way out.” This is a model of empowering those with moderate to low income through asset building. Across the country, Individual Development Accounts are used to help people put money into matched savings accounts for higher education, small business start up, and first time home buying.

New Century IDA helps each participant in the program open Individual Development Accounts and save money that will be used to become a first time homeowner. Here comes the good part. After successful completion of the program, which includes attending classes and meeting with a success coach, each participants’ savings are matched either 2:1 or 4:1. What a great incentive to partner with New Century IDA and begin working towards your dream of becoming a homeowner!

The New Century IDA program promotes economic self-reliance and has been referred to as “hope in concrete form.” It is not just a quick fix. It truly helps the people of Forsyth County break the cycle of poverty. Click here for an application and to join the New Century IDA community today!

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!

New Adventures

As fall is rapidly approaching, many of us are preparing to start new adventures. This week marks the beginning of something new for me, as I begin my year of service as an Americorps VISTA at the Forsyth County Department of Housing, primarily working with the New Century IDA program. As a 2009 graduate of Wake Forest University, I am happy to return to Winston- Salem where I can enjoy ACC sports (Go Deacs!) and good southern cooking. My puppy Lola is adjusting to life in Winston- Salem and is anxious to explore Pilot Mountain and other walking trails in the area.

The New Century IDA program in Forsyth County is one of the most successful in the country. Since 1999, over 440 people have successfully completed the program by becoming homeowners. Owning a home is a goal for many Americans, but the process can be tricky and intimidating. The New Century IDA program empowers people to reach the goal of home ownership by offering financial literacy classes and matched savings accounts. As a young adult living on a tight budget, I can appreciate how valuable this extra guidance can be!

The Department of Housing is fortunate to have many partners throughout Forsyth County who share a vision of asset building and of making home ownership a reality for people in our community. These partners help make the New Century IDA program such a success. I look forward to meeting all of you in the upcoming weeks and collaborating this year! I am also excited about getting to know clients of the New Century IDA program as I hear your stories and learn how we can serve you better.

It is exciting to join a program that provides such a valuable service to the community. I look forward to working with all of you this year, as we strive to insure the continued success of the New Century IDA program and reach out to new communities. This is going to be a great year!

Rachel Bates
AmeriCorps VISTA