"No matter who you are, making informed decisions about what to do with your money will help build a more stable financial future for you and your family."
- Alan Greenspan
Greater New Haven is among the country’s poorest region, and with the economic downturn putting so many out of work, income security is a major concern of many families in our region. In addition, research indicates it is costly to be poor. For instance, access to community based branches of financial institutions tends to be less available in lower income communities, leading to the use of more costly alternatives, such as check cashing services. Access to major grocers is also less frequent in low income communities resulting in higher grocery costs from purchases made at local corner stores often charging three times the rate of major retail grocers.
In response to the needs of low income communities in our region, a broad movement identifying key resources has been developed to help low-income families achieve financial economic success. Examples of tools and resources helping individuals and families achieve financial economic success include:
“Financial education” refers to a broad umbrella of services that include credit counseling, investment advice, and protections against unfair or predatory lending. Practically speaking, financial education often involves free classes, online resources, and personal finance curriculum for individuals and families. Generally, financial education is coupled with individual asset building efforts and community banking to support educated budgetary, saving, and debt reduction decisions.
Financial coaching is a strategy for increasing financial stability focusing on trained individuals providing regular opportunities for one-on-one sessions with clients to identify and track income and spending as a pathway to building knowledge and changing behaviors toward achieving client identified goals and long-term financial success. Financial coaching provides advice and encouragement within a process largely driven by clients.
Throughout Connecticut a campaign to help low-to-moderate income households identify, assess and apply for the community benefits they are eligible to receive has increased momentum. Through the utilization of “Earned Benefits” and the "Benefit Navigator” case managers of community based organizations are actively identifying client eligibility, assessing and helping households complete applications for needed benefits such as SNAP (Supplemental Nutrition Assistance Program), Husky Insurance and WIC (Women Infant and Children) programs to name a few.
Free Tax Preparation Services
The Earned Income Tax Credit (EITC), a federal refundable tax credit that supplements low wage work, is the United States’ largest anti-poverty program. Yet the Internal Revenue Service estimates that one fourth of all eligible tax filers fail to claim their EITC tax refunds.
In Greater New Haven free volunteer income tax assistance (VITA) sites significantly impact individuals and families incomes. For example, in 2010 the network of Greater New Haven VITA sites lead by Coalition for Working Families completed 2,563 federal tax returns capturing $1.4 million in EITC refunds for families in our region. These free services are often accompanied by opportunities to sign up for financial literacy classes, open savings accounts, or apply for other income supports like food stamps.
Helping the Unbanked/Under-banked become Banked
According to the Federal Deposit Insurance Corporation (FDIC), roughly 30 million U.S. households are unbanked (i.e., do not have a bank account at all) and /or under-banked (i.e., supplement banking with non-bank alternatives, such as payday loans). In Connecticut, an estimated 19% of households are either unbanked or under-banked.
In response to these findings, programs like “Bank On CT” have been established to “bank the unbanked” and have sought to reduce cultural and other barriers to financial services for low-income people. In some cases, credit unions have created products that are easy to access but carry significantly lower interest rates than “payday loan” products to help low-income borrowers avoid getting stuck in debt.
First Time Home Buyers Programs
The first time home buying program is key to preparing potential new homeowners for success. Programs where individuals can acquire needed knowledge on the multiple faces of predatory lending including deceptive mortgage products (where high rates, for instance, are masked by low introductory “teaser” rates), title loans, credit card abuses, and other lending abuse-related issues help prepare potential homeowners to make knowledgeable financial decisions resulting in more stable housing opportunities.
United Way is committed to helping the community make the most of available resources, thus below are links to info for common income supports.
- SNAPs formerly known as foodstamps
- CT's Care4Kids makes childcare affordable for working low-to-moderate income households
- CT Husky Healthcare affords access to free and low cost health insurance
- WIC also known as Women, Infants and Children program provides supplemental foods to individuals in need