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Fall 2001
American
America Saves
Saver KANSAS CITY SAVER
You Can Build Wealth
Campaign Expands Getting disciplined to save
merica Saves continues to
A enroll new savers and expand
into new communities. By the
end of September, Kansas City B
eth Mayes wasn’t looking for
financial help when she went to
her local police station earlier
always try to think about how I can
save money. It’s just a discipline
thing. I think, where were you all
Saves had signed up more than 200 this year. She needed to report her these years that you didn’t know to
savers, and Cleveland Saves was license plates stolen so her car would- do this?”
nearing the 1000 mark. Broad coali- n’t be ticketed.
tions in Indianapolis, Charlotte, and But while she was waiting, a
Gadsen County, FL had begun plan- poster for Kansas City Saves caught I always try to
ning campaigns in their communi- her eye. “I thought, this is good for think about how
ties. And organizers were beginning
to build coalitions in Northern
the neighborhood,” she said. So she I can save
Wisconsin, Seattle, and Phoenix. took down the information and start- money.
Like the programs already ed attending meetings. Beth Mayes
underway in Cleveland and Kansas Ms. Mayes was ready for the mes-
City, these new campaigns are sage Kansas City Saves had to offer. Kansas City Saves also helped her
intended primarily to assist the “Two years ago, the Lord put it on with budgeting, keeping better track
financially vulnerable -- those who my heart to save,” she said. At the of her check account balance, and
have lost jobs or suffered cata- time, she had been building up credit making a monthly priority of setting
strophic expenses, those who are card debts, shopping first and worry- money aside. Just as important,
over-loaded with debt, and those ing about how to pay for it later. “I though, has been the support and
with little or no savings. had too many credit cards, and I encouragement she’s gotten from the
The national program of program. “It was a good feeling
America Saves is also taking off.
used them more than I should.” She
Non-profit credit counseling agen- carried over her debt, making mini- knowing I could call someone who
cies and Cooperative Extension mum payments, and shifted debt said, ‘yeah, you’re doing the right
offices each are developing cam- from card to card. “It was like a thing.’” She also enjoys the sense of
paigns for their members. dependency.” companionship it provides. “I want
The program got a big boost in When she started attending to be around people who are saving
July, when Providian Financial Kansas City Saves meetings, she had money and living within their
announced a two-year, $200,000 already made a start toward paying means.”
grant to support local and regional off those debts. The meetings gave Last year, Ms. Mayes managed to
campaigns. All of the money from her useful tips on how to save money, pay off, and cut up, two of her credit
Providian will be passed on in grants like saving her extra change in a jar, cards, and her goal is to cut up
to help in the organization of these another two by the end of the year.
campaigns.
cutting out the unneeded services on
Using funding from an earlier her telephone bill, and cutting down When she gets her debts paid off, she
Bank of America Foundation grant, on pay tv. has no intention of going back to her
Consumer Federation of America, Since joining Kansas City Saves, old ways.
Consumer Credit Counseling Service she has taken that message and run “Ten years down the road, when
of Northeast Ohio, and WECO have with it. Instead of eating her lunches it comes time to retire, I don’t want
provided technical assistance, out, she takes a brown bag lunch to my children to have to take care of
including many site visits, to the work each day. She’s also cut back me. I want my money saved. I want
new campaigns. They have also on entertainment expenses, shops my money invested. I want to be
developed an organizing manual that more carefully at the grocery store, taking care of myself, with my own
any community can use to plan and and has decided she and her husband money.”
operate a campaign..
can get by without a second car. “I
B u i l d W e a l t h N o t D e b t
Savings Strategies
Managing Consumer Debt
Can you only afford to make mini- services or shifting credit card debt
mum payments on your credit cards? from card to card. That can make your
Do you worry constantly about finding situation much worse.
the money to make monthly loan pay- Even refinancing consumer debt with
Financial Market
facts
ments? Do you borrow more money to a mortgage loan is often a mistake.
pay off old debts? While your loan rate may be lower, you
If so, your debts are out of control. are spending the savings you have accu-
October 2001 But there is hope. With some discipline mulated in your home — savings that
Money market and some patience, almost anyone can you will almost certainly need later in
account 1.39% reduce their debts and start to accumu- life. And, most people who refinance
1-year CD 2.52% late wealth. debts with a home equity loan continue
5-year CD 4.10% to accumulate consumer debts — a sure
WHY PAY OFF DEBTS? recipe for financial disaster.
U.S. Savings Bonds Americans spend more than $75
EE Bond 4.50% billion a year just on interest and fees
HOW TO REDUCE YOUR DEBTS
I Bond 5.92% on their credit cards. That’s more than The first step in getting out of debt
$750 per family — $750 that buys is to stop borrowing. That may mean
Mortgage Rates them nothing in the way of food or cutting up your credit cards or, at least,
30-year fixed rate clothing or health care. locking them away in a safe place.
mortgage 6.64% Those who make only minimum To stop borrowing, you have to stop
15-year fixed rate credit card payments or who roll over spending more than you earn. So, make
mortgage 6.10% high cost payday loans fare far worse. a budget and cut out any expenses you
1-year adjustable They can end up paying much more can. While you’re at it, figure out the
mortgage 5.57% just in interest than the amount they most you can afford to pay each month
originally borrowed. to reduce your consumer debts, and
Sources: The New York Times,
“Data Bank,” pg. BU 13, October But the costs of debt are more than make those payments religiously.
21, 2001. U.S. Savings Bond rates just financial. Debtors say they lack If you have debts on more than one
from www.savingsbond.gov, credit card, either pay off the card with
October 22, 2001.
peace of mind. They feel financially
insecure all the time. And debts put a the highest interest rate first and work
strain on families. Money is the number your way down to the lowest rate card,
one topic of family arguments. Large or pay off the smallest loan first and
Family Wealth
facts
debts can turn those arguments into a work your way up to the largest.
family crisis. Once you’ve paid off your debts,
avoid the temptation to start spending
again. Instead, take that monthly pay-
Average Household WHAT NOT TO DO ment and begin to save it. That should
Consumer Debt The solution to debt problems is give you a cushion the next time an
All consumer debt* not using commercial credit repair emergency strikes.
(6/2001 est.) $15,000
Credit card debt
(6/2001 est.) 6,300 Where to Get Help
Households Seeking In most communities, there are agencies that can help you manage your
Relief from Debts debts. The most helpful and available are non-profit Consumer Credit
Counseling Services (CCCS). CCCS counselors can work with you privately to
Bankruptcy filings help you develop a budget, outline options, and negotiate with creditors to repay
(6/2000- your debts. Call 1-800-388-2227 to locate the office nearest you.
6/2001) 1.4 million In many communities, Cooperative Extension offices offer workshops, home-
study courses, and other services to help people manage their money, including
Credit counseling their consumer debts. Cooperative Extension offices are listed in the blue pages
clients (2000) 1.1 million of the phone book under county government.
*Excludes mortgage debt. If your debts are too large, you may want to consider bankruptcy.
Source: Federal Reserve Bulletins,
Bankruptcy can give you a fresh start, but it is a serious step that can damage
American Bankruptcy Institute, your ability to get credit for years. Call your Legal Aid or Legal Services office
National Foundation for Credit for advice. If you don't qualify for their services, ask them to refer you to a
Counseling.
bankruptcy attorney.
A Quarter Saved
is a Quarter Earned
Take advantage of “90-day
N
o one knows better than Send your savings tips to:
Savers how to find the extra same as cash” deals, but only if American Saver, c/o Consumer
dollar here and quarter you have the cash on hand to pay Federation of America Foundation, P.O.
there that, over time, add up to for the item. When you make the Box 12099, Washington, D.C.
substantial savings. Here are a purchase, put money for the pur- 20005-0999.
few of their savings tips. chase in a 3-month CD and let it If we select your tip for publication,
collect interest. At the end of the we will send you a $50 EE Series
I repaid a loan with automatic three months, you can use the cash Savings Bond (initial value $25). Please
payments deducted from my direct plus the interest to pay off the include your name, mailing address, and
deposit paycheck. Instead of stop- item. phone number so we can contact you to
arrange for your savings bond.
ping the deductions when the loan HAROMMA DICKERSON
was repaid, I have the amount KANSAS CITY
directly deposited into a savings The best way to save money is Save a couple of dollars (or
account. This is my emergency to make sure that it starts in your more) per month by packing sand-
fund, and I don’t miss the money savings account. Get your pay- wiches and chips for lunch in
as much as I would if I were mak- checks via direct deposit. It is too reusable containers. Plastic sand-
ing the deposits myself. easy to ask for an “extra” twenty wich bags cost about $1.50 for 50
ESTER E. CRAWL-BEY, dollars cash when you deposit your bags. If I use four per day (for two
CLEVELAND children), I would be buying two
own paychecks. If your employer
When washing windows, use doesn’t have direct deposit, ask boxes per month — at a cost of
newspaper to wipe them clean. why. It may be for lack of interest. about $36 dollars per year. I can
Newspaper eliminates streaks, JERRY MUNK buy a four-pack of reusable con-
leaves windows sparkling, and SILVER SPRING, MD tainers for about $3 total.
saves the money you would spend LISA PIERCEFIELD
To save money, shop at thrift COLUMBUS, IN
for expensive paper towels. stores rather than department stores.
GAIL KEEGAN LITA PRESTAMO
MENTOR, OH CLEVELAND
SavingsQuiz
American
Q. What do most experts consider to be a risky level of consumer debt for
a family with an income of $50,000?
Saver
(a) More than $5,000 (b) More than $10,000 American Saver is the quarterly newsletter of
(c) More than $20,000 (d) More than $30,000 the America Saves campaign, a national pro-
A. More than $10,000. Most experts think that a consumer debt to income ratio of 20 percent is risky. That gram to encourage and assist Americans to
debt would include credit card debt and installment loans, but not mortgage debt. save and build wealth more effectively.
The campaign is coordinated by the non-profit
Q. If you made only the two percent minimum payment on a $2,000 Consumer Federation of America Foundation
credit card debt (at a 15.04% interest rate), how many months would (CFAF), supported by the Bank of America
it take to pay off this debt completely? Foundation and other funders, and advised by
(a) 13 months (b) 38 months (c) 84 months (d) 169 months dozens of non-profit, government, and busi-
A. 169 months, and you would end up paying more than $2,200 in interest on top of the $2,000 borrowed. ness groups.
Questions about how to start a local savings
Q. If someone rolls over a $100 payday loan for a year, how much inter- campaign in your area should be directed to:
est are they likely to owe? Nancy Register, America Saves, c/o CFAF,
(a) $30 (b) $60 (c) $120 (d) More than $300 P.O. Box 12099, Washington, D.C. 20005-
A. Since payday loan rates typically range between 300% and 400% (and are as high as 1000%), a
0999; 202-387-6121 (phone); 202-265-7989
borrower would be likely to owe more than $300 in interest. (fax); nregister@consumerfed.org.
American Saver Editor: Barbara Roper
3
News F R O M L O C A L C A M PA I G N S
ClevelandSaves KansasCitySaves OtherSavingsCampaigns
In the six months since its official Kansas City Saves continues to Dozens of organizations are
kick-off, the Cleveland campaign has expand its outreach efforts with new participating in monthly working
really taken off. By the end of partners and programs. group meetings in Indianapolis,
September, the campaign had held The Local INvestment Com- and task forces have been set up
56 workshops, attended by 1,133 mission (LINC) — an area-wide for detailed planning in such areas
people, and signed up 900 Savers. community organization — has as education and organizational
Both the Inter-Continental Hotel begun promoting Kansas City Saves recruiting. The campaign will
and the Counsel for Economic in the many neighborhoods where it begin program testing this fall in
Opportunities of Greater Cleveland has Caring Community sites and has preparation for a spring 2002
include Cleveland Saves workshops in incorporated the program into its launch.
their new hire orientation programs. training for people who want to offer Since beginning planning
Cleveland Savers have been featured at-home child care services. meetings in May, Gadsen Saves has
in the local media. And Savers at In October, the Church drafted a service plan, developed a
three area employers have organized Community Organization (CCO) brochure to use with potential
themselves into Savers Clubs. invited Kansas City Saves to make partners and members of the pub-
Many Savers have taken advan- its brochure available at an event lic, and received early publicity in
tage of popular free services offered that brought together 700 individu- the local newspaper.
to by the campaign, including a 30- als from different denominations. Charlotte Saves has organized
minute phone fiscal fitness check-up Central Bank has run a promo- a broad coalition of non-profits,
with volunteer financial advisers and tional campaign in local newspapers government agencies, and busi-
the opportunity to participate in free encouraging area residents to deposit nesses to plan a savings campaign.
technical office software training their federal tax rebate checks rather The president of Bank of America
classes offered by the Cuyahoga than spend them. The bank offers of the Carolinas is a key leader of
County’s Workforce Investment $50 to those who enroll as Savers, this effort, which plans to test
Board. attend a seminar, deposit the check services next spring and launch the
All this activity is building in a Savers account, and leave the campaign that summer.
toward recognition of the Cleveland money there for six months. Initial planning meetings have
Saves 1000th Saver at a community As a result of its efforts, Kansas been held in Phoenix, Seattle, and
savings celebration scheduled for City Saves had enrolled 217 Savers northern Wisconsin. In addition,
November 17. At that event, several by the end of September. Louisville, Reno, Las Vegas, and
savings bonds will be given away, as Jacksonville are exploring develop-
will game tickets donated by the ing campaigns.
Cleveland Indians.
B u i l d W e a l t h N o t D e b t
PRSRT STD
AmericaSaves U.S. POSTAGE
PAID
You Can Build Wealth WASHINGTON, D.C.
PERMIT NO. 8772
P.O. Box 12099
Washington D.C. 20005-0999
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