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America Saves

Interesting article in the NYTimes: Can Poor People Be Taught to Save?

Why can't poor people save money? Part of that psychological barrier... was social pressure to not save; the minute people got a little surplus, friends and family would start asking for loans. There were other obstacles too. People in both communities feared losing welfare benefits if they accumulated cash. Many families didn’t even define savings monetarily; they talked about the things they would sell in desperation - baseball-card collections, heirlooms or other low-value assets.

Enter AmericaSaves.org. What is America Saves?

America Saves is a nationwide campaign in which a broad coalition of nonprofit, corporate, and government groups helps individuals and families save and build wealth. Through information, advice, and encouragement, we assist those who wish to pay down debt, build an emergency fund, save for a home, save for an education, or save for retirement.

It's a social network changing the peer pressure in poor communities from spending and lending to saving. According to the article, "about nine million households have effectively no financial assets - nothing to fall back on for emergencies or retirement."

Banks help out by joining the program and creating accounts that charge no fees and have no minimum balance requirements. Amazing.

Something credit unions should get involved with. Creating wealth and assets for those with none. Banking for the under-banked and under-served. Hey, isn't that already our mandate?

PS: Thanks for the link, Rob

Labels: banking, bankwatch, canada, corporate responsibility, media, opensourcecu, socialsignal, vancity, web

posted on Sunday, April 08, 2007

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2 comments
I believe that there are groups out there trying to help. Social Compact is a new company based in Washington, DC that is taking the Census several steps higher and proving to banks that there is enough money in under-privelaged neighborhoods to place a branch to serve those communities. The bigger problem besides providing access to a bank or a free account is educating the unbanked how to use a bank and manage their money through an institution instead of with cash and jars. Also in educating those with checking accounts in how to remain debt-free. The education is probably the key component along with the responsibility for companies to stop pushing credit cards that would only worsen problems for these groups of people and others who may have other difficulties in saving thier money.
comment from  Stephanie Willson on April 09, 2007  

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Thanks Stephanie. I totally agree. It's 95% an educational issue and 5% an account/service chanrge issue.

I like how America Saves indentified peer pressure issues in poor communities against saving and tried to change those as a form of education. Smart, very smart.
comment from  wazaroff on April 09, 2007  

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