By Meg Wallace
Supplemental Security Income recipients are getting a 5.9% raise in 2022!
That sounds like a hefty increase until you realize that in 2021 the maximum SSI benefit was $794.
Almost nine out of 10 apartments in Waco rent for more than $700 a month, and rents are rising rapidly.
So how do our neighbors with disabilities get by?
Some barely do. Many do not receive SSI benefits, and those who do are hemmed in tightly by rules about income and assets. Income received from work or other sources besides SSI triggers a reduction in benefits, and money carefully saved — to buy a car to drive children to school, for example — can exceed the asset limit, endangering Medicaid benefits, as well as SSI.
No amount of budgeting savvy is going to squeeze more blood out of this onion.
So what can we do when we or someone we care about has a disability and is repeatedly coming up short financially?
The first thing is to be understanding. People who receive or are eligible to receive SSI benefits have a disability that makes it difficult to sustain steady employment, and their financial options are severely limited by Social Security rules. Repeated financial crises are pretty much inevitable when there is so little wiggle-room in a person’s budget.
Second: learn about the options.
What are the options?
Advice on money management can be good, but it is rarely enough when there is nearly always more month than money.
Referring someone to receive assistance with utilities or other expenses is great, but there are limits to how many times people can receive help from these assistance programs.
Giving money from your own pocket when asked is commendable, but it can complicate relationships, putting the beneficiary in the position of supplicant all too often and possibly leading to resentment and lack of trust.
The most lasting options get at the root of the problem: reducing expenses while increasing access to funds.
In the Amberley Collaborative’s Financial Instruments for People with Disabilities online workshops, four experts walk participants through these more lasting options:
As the lived-experience expert, I speak about my own family’s journey with disability and related financial challenges.
Karisa Garner, of Heart of Texas Region MHMR’s PATH program, talks about SSI and SSDI — who can apply for benefits and how to apply.
Tory Schafer, a local insurance agent, discusses access to medical benefits and health insurance to lower or eliminate the cost of health care.
And Jeremy Mocek, of Academy Capital Management, guides us through ABLE accounts and special needs trusts, so people can receive income and other support and can save money without endangering their benefits.
Our next workshop is at 3 p.m. Tuesday, November 2. You can register here. We keep our workshops small enough for questions and discussion, so if you don’t land a spot in the Nov. 2 workshop, do sign up for the waiting list, and we will let you know when the next workshop is offered.
Because Amberley Collaborative’s mission is to help regular folks help one another, our workshops are acronym-free zones, accessible, and easy to understand for beneficiaries, their loved ones, and local professionals. And our presenters make themselves available for free consultations after each workshop to help you take next steps.
Please consider joining us.
Meg Wallace (MA, LMSW) is organizer and director of Amberley Collaborative, a Waco nonprofit that strengthens natural support systems for people facing challenging and isolating life circumstances.
The Act Locally Waco blog publishes posts with a connection to these aspirations for Waco. If you are interested in writing for the Act Locally Waco Blog, please email Ferrell Foster at [email protected].
By Dexter Hall
Definition of divergent
1a: moving or extending in different directions from a common point: diverging from each other divergent paths.
Definition of convergent
1: tending to move toward one point or to approach each other: CONVERGING convergent lines
I have been on a personal journey with family and friends, as well as friends of friends, to ensure they have received their COVID-19 vaccination. I have shared with many that I am “2-Shots In” referring to the Moderna vaccination.
More importantly, I have shared how this is helping me to move past the pandemic, while still using safe protocols. I’m beginning to do the things I enjoy most — things I have been inhibited from doing during the pandemic, such as travel, gatherings, concerts, and many more.
As we all move forward, I ponder which way our community will go and what will be left behind. Are we diverging or converging post-pandemic? Which path will we take?
Financially, each path carries its own weight of issues — some with good prospects and some with not-so-good prospects.
COVID-19 forced us all to work together, to converge, if we were to survive the health and economic apocalypse that could have engulfed us. We worked together for the greater good. During this convergence, COVID-19 helped uncover mass amounts of disparity in our community regarding health, education, and financial and economic security. Some of us were not surprised at all by these disparities because this is and has been our lived experience via work, life, or in my case both.
As these long-held disparities in financial and economic security were displayed openly for all to see, there was a movement or convergence of government, community, nonprofits, business leaders, and others. They came together to develop many initiatives, in some cases first-of-their-kind programming to help the LMI (low-to-moderate income) members of our community. These safety nets ensured the bottom didn’t drop out of our economic floor, which would have been catastrophic for all, including the “haves.”
COVID-19 put us all on a converging path of economic survivability and showed how working together provides a brighter path for our most vulnerable community members and also works for ALL Wacoans.
As we resume our pre-pandemic normal, we tend to diverge, to move away from working together, back to our corners, and away from our common goal of fighting COVID-19. I wonder what will be lost that was gained during our fight. And, as in any war, what will the spoils be?
Will we forget the financial and economic disparities that were put on display as many in our minority communities lost their jobs with no economic safety net?
Will we forget the struggles of our minority small business owners who lacked access to capital prior to COVID-19 and saw greater losses during the pandemic than their counterparts?
Will we forget how they asked for and still need “Targeted Technical Assistance” that works for them and not for the provider?
Will we forget the housing needs of our marginalized community as prices of goods to build housing have soared almost three times their pre-pandemic levels and which will ultimately widen the already wide Black/White housing and wealth gap and also lead to an “affordable rental” issue in our community?
I ask, are we on a path of converging or diverging post-pandemic?
Let us stay the course and “LIVE” like the pandemic is behind us but continuing to “WORK TOGETHER” as if the pandemic was still in front of us. Let us converge, not diverge, in our viewpoints on the economic security for all Wacoans.
At Prosper Waco we are working to address the financial and economic security for our marginalized communities in Waco. We invite you to join us in this fight that ultimately impacts all Wacoans. Please contact me at [email protected] for information on how you can be involved as we are converging together through the “City of Waco Financial Empowerment Blueprint.”
One for all and all for one.
Dexter Hall is chief of staff and senior content specialist for financial security with Prosper Waco. For more information on financial security contact Hall at [email protected].
The Act Locally Waco blog publishes posts with a connection to these aspirations for Waco. If you are interested in writing for the Act Locally Waco Blog, please email Ferrell Foster at [email protected].
Editor: In honor of Women’s History Month, we are featuring interviews with local women leaders. These pieces were written by Baylor University students from the Department of Journalism, Public Relations, and New Media.
By Nikita Delfin
Americans move on average once every five years, according to demographers, and “home” is now considered a temporary stopping place rather than a permanent habitation.
With more than 250,000 people choosing to live in Waco and McLennan County, one might wonder what there is to love about the place.
Carolyn Haferkamp, president – chief lending officer of Central National Bank, Baylor alumna, and Waco native, says it just so happens to be the people.
“It’s the family environment,” she said. “I think that so many people that we know, beyond their own families, have this great friend group and support system. Everyone just takes care of everyone, and that’s what I appreciate the most about it.”
It is this same family-friendly and supportive atmosphere that leads Haferkamp and other Wacoans to improve the welfare of the community. And this civic engagement and participation is vital.
“I think that as a community we take for granted some of the services, activities, and opportunities we have,” she said. “All of those things are usually volunteer-driven and without volunteers who are serving on the boards, showing up every day, sorting through donations and helping an event take place, those things wouldn’t happen.”
Regardless of age, background or the stage of life someone might be in, Haferkamp said anyone and everyone can truly benefit from participating in community engagement programs.
With Waco being a bustling college town, she encourages college and university students to reach out to the city’s bigger organizations.
“For a Baylor student, I would not necessarily recommend Junior League of Waco because it is a long-term commitment but reach out to some of the bigger organizations who touch many different agencies like Act Locally or United Way,” she said. “Ask them where the opportunities are and say that you would like to serve.”
For young professionals who are more sure about staying and residing in Waco, she recommends the Junior League. Haferkamp, herself, has contributed 10 years of active service with the Junior League and is currently a sustainer.
The Junior League is an organization of women committed to promoting voluntarism and strengthening the community through creative solutions to current and future challenges.
“It allows you to see every little facet of Waco and where the different needs are,” she said. “We have this very robust secondary education system with Baylor, TSTC, and MCC, but the level of poverty and preschool education availability are areas where we could improve.”
Aside from directly benefiting those in the community, Haferkamp said volunteering and participation are excellent opportunities to bond with your fellow citizens. More importantly, it is something that is fulfilling and rewarding.
“It plugs you in, not only with the community, but also to a social circle,” she said. “It connects you to people who are like you, but also, it’s good for your own self-fulfillment. Being involved in the community is taking ownership, and I think when you take ownership, you enjoy it more.”
Nikita Delfin is a junior English major from Brenham who hopes to one day teach literature to people of all ages.
The Act Locally Waco blog publishes posts with a connection to these aspirations for Waco. If you are interested in writing for the Act Locally Waco Blog, please email Ferrell Foster at [email protected].
Editor: In honor of Women’s History Month, we are featuring interviews with local women leaders. These pieces were written by Baylor University students from the Department of Journalism, Public Relations, and New Media.
By Emma Ethridge
Thousands of students move from the homes they grew up in to attend Baylor University year after year. How often is it that after four years, once the diploma is in hand, they remain in Waco for their next steps in life, striving to make a difference in the community?
Caitlyn Remson, assistant vice president with Central National Bank Waco, is a Baylor alumna who is doing just that. She is an active member of the Waco community who is passionate about making a difference through her involvement at CNB, the Junior League of Waco, and Harris Creek Baptist Church in McGregor.
Remson graduated from Baylor with a degree in finance and then became a part of local banking. Remson also is the president-elect for Junior League of Waco, a nonprofit organization of women “committed to promoting voluntarism, developing the potential of women, and improving our community through the effective action and leadership of trained volunteers. Its purpose is exclusively educational and charitable.”
“Growing up in Dallas I didn’t know anything different than being in a big city,” Remson said. “Now that I live in Waco, I much prefer a mid-size city. I feel like there is more time in my day that I am not spending driving a long commute to work and to my first grader’s school; it really is a great medium,” Remson said.
Remson said that even though Waco is smaller than Dallas, there is still a lot to do between the parks, zoo, and the unique things that only Waco has.
Revival Eastside Eatery is “a family favorite” where Remson said she eats every Friday. Remson has learned a lot about Waco outside of the “Baylor bubble” since she graduated in 2011.
“There is a lot of industry here that I did not realize,” she said. “Historically there is a lot of business here, organizationally there are so many nonprofits and for-profit businesses that work together to make our community a better place. I feel like that has to be rare, that we would all have our individual interests but still want to serve the community as a whole, meeting the greater needs together.”
Waco is populated by about 138,000 people, a portion of that number being a part of the Baylor community.
“Through COVID-19 I fear that some of the collaboration is going to suffer,” Remson said. “The way a community thrives is through the connections within it, despite the differences in our community. There is always going to be a disparity of wealth, but I feel like before COVID-19 we were really on a track to work together really well. I hope to see organizations and school systems continue to find ways to evolve and address issues such as inequity. I want to see us continue to thrive while taking care of each other.”
Waco has rapidly grown since 2014, despite the economic challenges that have occurred in the last 20 years, such as the financial crisis of 2008.
“There is so much growth that has happened here in terms of new shops and restaurants,” Remson said. “I even have peers that have gotten to put down roots and grow small businesses to help the community. I hope to see Waco continue to grow into the great city I know it can be.”
Emma Ethridge is a Baylor student studying public relations. She is from Austin.
The Act Locally Waco blog publishes posts with a connection to these aspirations for Waco. If you are interested in writing for the Act Locally Waco Blog, please email Ferrell Foster at [email protected].
By Phil Oliver
Thing One: How to treat a financial windfall in a healthy way
Were that it was just about money—-this concept of financial freedom would be such a breeze! However, when the financial situations become dire, we are ready for help and assistance in creating quick financial solutions to solve a complex set of multi-reason patterns of spending that upset EVERY aspect of our lives…not just financial.
In past blog articles, I have addressed many ways I help clients as a Financial Coach to look authentically at their income and spending and look at the possible resources in our community to help “bridge the gap” toward reaching their main financial goal. I take a much different approach than a Financial Advisor because he looks more for investment opportunities, while I deal more with looking at how to better spend and enrich the relationships in your household with the income you currently have.
So, this article will look at healthy ways I would recommend as a Financial Coach to handle a possible time when a financial windfall is placed in your lap.
For some, it is this season of tax refund, for others it is an inheritance, for others it is a work bonus, or another unexpected cache of cash. Whatever the source, thought and planning will give much more lasting results than quick, random spending.
First, I will go back to my first question in this series:
What is the main financial goal you seek? This is the foundation for all subsequent decisions, sacrifice, budgeting, and celebration.
The second is just as important, but a little more allusive: Why?
This is where the income becomes intentionally targeted on the GOAL, rather than the SPENDING. Money is simply the means to better accomplish what we really want to happen in life and the relationships that drive the real source of our true wants.
Looking at cash windfalls is no different than the budget building process we have already covered. The biggest change is to move from planning for needs (or even temporary wants) to planning for shared dreams and life enriching experiences and events.
This process is easily done during the budget building process. After the Bare Bones Budget is done, then a consideration of wants is added as the income improves. For a windfall, the next step is to come up with household “dreams plan list” that, while unfunded now, can be anticipated, reviewed and considered for any future unexpected income.
Some common categories for households to use to construct a “dreams” list could be:
- Buying a House
- Starting a business
- Education
- Moving
- Giving
- Purchasing A Car (for cash)
- Eliminating all debt
- An Emergency Fund
Each of these can be part of a long-term dream list that can be intentionally planned for with overage each month, while an additional windfall would simply expedite the opportunity to fund the dream(s).
So, the first step is to get together as a household and “dream”. A household brainstorming meeting could easily be part of the regular budgeting process where everyone is given input. Then, use the conversation to make your “dream list” that is added to your budget as an additional page or addendum. You can either make a plan to allocate a percentage of overages and/or windfalls to the listed items,
Which might look like this:
- 30% to Giving
- 30% to Eliminating all debt
- 40% to An Emergency Fund
or to completely fund the list from item one to the next until the money runs out.
Which might look like this:
- Giving
- Eliminating all debt
- An Emergency Fund
Both continue to focus on intentional spending, rather than random and impulsive spending.
Once the list is compiled, the financial aspect can take a back seat to the relational possibilities of looking, anticipating, announcing monthly updates, or even “window shopping” for the things on the “dream” list during the month. That can be just as exciting and rewarding as the actual spending!
I hope you will use these as just the beginning examples of ways of handling a windfall to maximize the current and future impact on your household.
Be Creative and invest in what matters most—-relationships!
Thing Two: Getting Financial Help Locally
We are fortunate in Waco to have so many community resources. I have begun to compile and locate resources here in Waco that can help with Financial Literacy, Money Management, and Personal Financial Counseling.
Here are two of the best starting points for those who are seeking assistance:
- Prosper Waco with their “Get Help Locally” page: www.prosperwaco.org/get_help/. — Look currently at Housing (to Buy) and Housing (to Rent). Both of these categories give local agencies that help with financial literacy. More will be added soon!
- Call “211” or if your cell phone can’t call it, dial 1(877)541-7905. — Ask for resources in McLennan County for “Personal Financial Counseling”
Most current resources are available with links on these sites and I personally know that Prosper Waco will continually and regularly add to their resource page as a direct result of their growing commitment to be a One Stop Shop for resources to enhance life for all residents in the Waco area.
If you have additional resources you would like to recommend, please call or text me directly at 254.744-8328, or Prosper Waco at 254.741-0081 ([email protected] )
Blessings and best wishes for a fulfilling, fantastic financial future!
Phil Oliver is a retired educator. He is an independent Financial Coach, active mentor, and community activist. He has spent the last 8 years empowering individuals and families to take charge of their finances through his FLOW system. He is active in many community efforts to grow financial literacy and responsibility including Prosper Waco and Citizens for Responsible Lending. He consults with many local organizations to teach and inspire their efforts to empower clients in personal finances. You can contact him at: [email protected]
The Act Locally Waco blog publishes posts with a connection to these aspirations for Waco. If you are interested in writing for the Act Locally Waco Blog, please email [email protected] for more information.
(Note: This post is part of an on-going series on financial literacy. Two of the goals of Prosper Waco have to do with accumulating wealth: (1) Reduce the percentage of Waco-area households living without three months’ worth of savings if they were not able to work. (2) More than 50 percent of Waco households will have a net worth above $15,000. Our hope is that this series will help move our community towards accomplishing these goals both by sharing information about some of the challenges, complexities and practicalities of managing finances. For other posts in this series, click here: Financial Freedom. — ABT)
By Phil Oliver
Welcome to undoubtedly the most generous, unplanned, impulsive time of spending in America—–Thanksgiving and Christmas!!
These wonderful times encourage us to give and spend freely on the ones we love and causes we passionately care about.
So, how do YOU plan to balance the WANT to give with the healthy ABILITY to give without growing debt that will last long into next year? This is the question that many families and individuals struggle with as they face ever tightening budgetary situations.
I addressed the main component of this desire in my very first blog about motivation. Refuse to give in to the ever increasing pattern of proving and buying love with stuff, but rather deepen and extend love with time, involvement and more stress-free planned giving/spending. Each family and individual can have a WONDERFUL giving experience as they realistically plan for the stuff and then intentionally budget their time for more longer-lasting relational investing.
First, the Christmas gift giving season demands advanced planning. Luckily, it happens each year at the same time, so it can be expected and anticipated. Ideally, each family would have a little savings set aside every month for gifts and celebrations that would include a large portion for Christmas– gift giving, travel, food, and decorations.
The reality for most is that this doesn’t happen. As the holidays approach the excitement (and tension) grows for the individual gift purchases and with it the expectations to show love and appreciation with stuff.
What to do?
- If you haven’t yet set a Christmas spending plan, do it NOW!!
- Determine ALL the people, agencies, organizations and ministries that you plan to give to and prioritize.
- Determine closely and reasonably how much money you have available to spend. This could be from your current savings, extra work, or even spending less on yourself.
- Let your entire household help decide on any spending outside your direct family. DON’T BORROW ON ANY ANTICIPATED IRS REFUND!!
- Write down the individual people and organizations and divide the money you currently have to give to each. Then, you can also include an additional percentage of any extra money that comes in before the gift is given. You would probably want that to be for close family members.
- Use your listed amounts and look/search online and sales for items that you and your family want to purchase for the best deals. Also, consider gently used items that are more budget friendly.
- Commit as a family to follow your budget without borrowing or going into more debt. Involve even the youngest in the process–make it a game and be creative together!
- Plan for shared shopping, buying, and wrapping. It then becomes an exciting, shared giving experience/memory.
Here are some great apps that may also help in planning:
- EveryDollar (free for Android and iOS) — Christmas and all year
- Santa’s Bag – Christmas Gift List (free) — Specifically Christmas spending
Here are some links for more ideas to help:
- “11 Tips For Holiday Shopping That Won’t Break The Bank”
- “The Christmas Budget You’ve Always Wanted”
As you and your family begin to look at areas of seasonal financial health and security, I hope some of this information will help to propel your progress to include intentional generosity in ALL your financial planning!
Finally, if you have decided you want to start a comprehensive financial plan for your family, please check out the Federal Reserve’s Free publications and web resources that have been endorsed by many of our local financial institutions as well as Prosper Waco:
Have a WONDERFUL, FINANCIALLY HEALTHY holiday season with family and friends!!
Phil Oliver is a retired educator. He is an independent Financial Coach, active mentor, and community activist. He has spent the last 8 years empowering individuals and families to take charge of their finances through his FLOW system. He is active in many community efforts to grow financial literacy and responsibility including Prosper Waco and Citizens for Responsible Lending. He consults with many local organizations to teach and inspire their efforts to empower clients in personal finances. You can contact him at: [email protected]
The Act Locally Waco blog publishes posts with a connection to these aspirations for Waco. If you are interested in writing for the Act Locally Waco Blog, please email [email protected] for more information.
(Note: This post is part of an on-going series on financial literacy. Two of the goals of Prosper Waco have to do with accumulating wealth: (1) Reduce the percentage of Waco-area households living without three months’ worth of savings if they were not able to work. (2) More than 50 percent of Waco households will have a net worth above $15,000. Our hope is that this series will help move our community towards accomplishing these goals both by sharing information about some of the challenges, complexities and practicalities of managing finances. For other posts in this series, click here: Financial Freedom. — ABT)
By Phil Oliver
Financial patterns are established over time through both experiences and family practice. Sometimes these patterns turn into family spending habits that lead to some type of financial deficit. So, these patterns must be considered and addressed if true change will be accomplished.
It all begins with a spending plan and knowing exactly how much money you have coming IN and how much going OUT–where it actually goes by week-month-year. Once you know your patterns and habits, you can then decide where YOU want it to go by week-month-year. If you don’t know how much you have and where your money is going, you’ll never be able to make any new choices about it.
Remember, borrowing from others (even family) CANNOT be part of your plan!!! ATMs CANNOT be part of your plan!!
Debit cards and cash cards can continue to cause you to overspend if not part of your agreed plan. Practice spending cash—it hurts more than swiping plastic! (As explained in previous blogs, you might want to implement a cash envelope system in your household spending plan.)
Also, it is vital that all members of the household participate in MUTUAL, agreed sacrifice to attack and deficit. This is where EVERYONE in the household is required to participate (age appropriately) in the monthly FLOW process decisions both for family spending and PERSONAL spending. This brings the buy in and commitment that is critical into growing future SUCCESS! The financial deficit should give opportunity for conversations of changes that could be attempted and new goals to be discussed and decided on. These mutual, self-determined changes become the basis for ACTION STEPS that can be tried, discussed, revised, and then fully practiced.
When this is in place, THREE WAYS to address the deficit can begin:
1.Save (by spending less) – This is not just putting money in savings to have for emergencies, but looking at ways to save money and cut back on what you’re already buying by becoming a smarter shopper and intentional spender.
Some universal saving strategies are: competitive shopping using coupons, sales, buying in bulk, buying generic (the products are always satisfaction guaranteed so you can try it to see if you like it and want to substitute it regularly……..if not, take it back and try another.)
Here are some websites to give practical ideas you could use in your household financial discussions. Some will not apply to your household, but some will. Part of the discussion and financial education is deciding what will work the best for your household at this time.
- 54 Ways to Save Money – America Saves
- 100 Great Ways to Save Money – The Simple Dollar
- How to Save Money : 75 Super Easy Ways to Save Money
- 97 Easy Ways to Save Money – Simple Savings on a Budget
2. Sell Something – Yep….collect those things you no longer need or haven’t used for awhile and have a Garage Sale or list it on an electronic forum. Here are the most popular and most used:
- Craiglist
- Ebay Classifieds
- Sell.com
- Geebo
- Oodle Marketplace
- Backpage.com
There are also MANY emerging apps for your smart phone that will allow you easy, quick ways to “click and post” Some even specialize in certain type of merchandise.
Here are a few:
- Letgo
- Neerbuy
- Mercari
3.Work More – I know that many of you readers are finding it increasingly hard to just maintain your current standard of living, and many are already working several jobs to just make ends meet, especially with wages continuing to stagnate. That being said, I highly recommend that if you do seek more employment, to set up an account with the Texas Workforce Commission. The account is free and once you set it up, you can modify and adjust any of your job seeking choices at any time. There are many local and national employers who extensively use this service to help them find employees.
Another great possibility is to find a product or service you really enjoy, get familiar with it so that you become an expert on it then look for sources to buy and sell it. I have worked with people who were able to supplement their income by buying and selling golf clubs, baby items, sports equipment, or anything else that they already knew about because they used them personally during the week.
It really doesn’t matter what your (legal) choice is because once you know a product or service thoroughly, you know the prevailing cost or charges and can then buy it cheap and sell it for a quick profit. You can even use some of those same selling sites to find customers.
Finally, As you look to adjust your finances to match your INs and OUTs, be aware that you can’t do it alone. Enlist and engage your entire household in the process, and then bring in others that have shown financial stability and wisdom over time that you know in your family, fellowship or favorite civic organization.
I have found in my many years of financial coaching that healthy finances tend to flow from healthy relationships. I believe the approach I have presented here will help you make sure that you are investing in your relationships while you are attacking your deficit. The biggest product will be to grow mutual financial freedom now, and the tools to continue the legacy in your family’s future.
If you have further questions, please feel free to e-mail me directly: [email protected].
Phil Oliver is a retired educator. He is an independent Financial Coach, active mentor, and community activist. He has spent the last 8 years empowering individuals and families to take charge of their finances through his FLOW system. He is active in many community efforts to grow financial literacy and responsibility including Prosper Waco and Citizens for Responsible Lending. He consults with many local organizations to teach and inspire their efforts to empower clients in personal finances. You can contact him at: [email protected]
(Note: This post is part of an on-going series on financial literacy. Two of the goals of Prosper Waco have to do with accumulating wealth: (1) Reduce the percentage of Waco-area households living without three months’ worth of savings if they were not able to work. (2) More than 50 percent of Waco households will have a net worth above $15,000. Our hope is that this series will help move our community towards accomplishing these goals both by sharing information about some of the challenges, complexities and practicalities of managing finances. For other posts in this series, click here: Financial Freedom. — ABT)
By Phil Oliver
Payday and Title Loans
As I shared in my last blog, I have spent many hours talking to individuals and households about honestly addressing their financial goals based on their money flow IN and the flow OUT. In my Financial Coaching, I am finding more and more cases where the short-term allure and convenience of quick (expensive) loans ended up becoming a major source of debt and despair. The complete cycle is more devastating as the flow slows. Medical bills or medicine, sickness or even car repairs, all become major setbacks in any household that basically operates from paycheck to paycheck. This is where many of the financially vulnerable turn to the predatory loan network.
Payday Loans and Title Loans are short-term (usually two week) contracts that require an upfront fee that must be paid back IN FULL in two weeks. The lenders are very willing to arrange for the “convenience” of a direct withdrawal from the consumer’s checking or debit account on payday (That’s why they are called “Payday Loans.”) More often than not, this arrangement results in additional fees and frustrations as the money needed to pay IN FULL is not available two weeks later. To make matters worse, consumers are sometimes also hit with insufficient funds or overdraft fees from their banks on top of the fees already paid for the loan. The larger the loan, the less likely the customer will be able to pay it off in the short term. When that happens, the payday lender often encourages the borrower to start another short term loan with additional fees! Most who borrow, WON’T have the money to pay off the loan in two weeks when it is due, and the cycle develops into devastating debt where eventually payments never chip into the principle at all, and interest mounts exponentially. In the case of an Auto Title loan, the period could be a month, but then thousands of dollars will be due in 30 days. In my coaching meetings, I have found this happening across the city in alarming frequency.
Since my last blog, the City of Waco has passed a Payday Lending ordinance which will go into effect on Sept. 1. This is AWESOME news for consumers in crisis! Now the lending institutions will be held to a reasonable standard of high interest and number of renewals of the loan. They will also be tasked with making sure the loan is not a crippling percentage of the customer’s take home pay. There will be grievance procedures in place for residents to file when lending institutions don’t follow the ordinance.
For more information on this important topic, I HIGHLY recommend contacting The Waco Citizens for Responsible Lending. And keep an eye out for an upcoming “Predatory Lending Training and Update. ” This session will include roundtable discussions concerning predatory lending updates at the federal, state, and local level as well as steps to get involved in your community. Special guest speakers will include Ann Baddour, Director of the Fair Financial Services Project at Texas Appleseed as well as staff from the City of Waco. For more information about Waco Citizens for Responsible Lending, or to get on the list to receive information about the “update” when it is scheduled, please contact Meilana Charles at 254-757-5180 email [email protected] or Tiffany Fry at 254-753-7337 email [email protected]
Student/College Debt
My biggest shift in the last few years with all those I talk with is to emphasize a common investment phrase…. “Return On Investment (ROI).” In regard to a college education, I highly recommend most high school students attend MCC or TSTC to start their studies for ANY degree or certification. These institutions provide a seamless path to job security through an associate’s degree or 4- year college by transfer or at MCC under the University Center opportunity. This combined with dual-credit classes in high school can allow residents to fully enter the job market or an undergraduate degree much more rapidly and with minimal debt.
It is not unusual now for graduates to build up a $40-60,000 student debt while earning an undergraduate degree. This often means up to 20-30% of their take-home pay is committed for long-term debt repayment. This is a huge issue especially when combined with housing costs which can require an additional 40-50% of take home pay. If you add that up, it means that there is only 20-40% left for ALL other living expenses!!
This is where the concept of Return on Investment (ROI) becomes so important. It is financially smart to think carefully about the ROI when planning for college and career. Of course it’s important to consider passion, talents and general interest – adding some consideration of average starting salaries and job availabilities rounds out a healthy equation for financial freedom. In most cases, there are many choices for career paths that are possible that use similar skill sets and training. Most college advisors and high school counselors can offer information for future job salaries, demand data, and trends.
Another consideration to reduce college debt, is the ability to transfer as many credits as possible from the community college. One of the best opportunities here in our area is the MCC University Center program. It allows residents to dually enroll in MCC and a partnering 4-year University while staying in Waco and paying much reduced hourly tuition. It also guarantees the acceptance of credits earned at MCC and puts NO LIMIT on the cumulative number of transfer hours!! Considering that most 4-yr Universities will only allow up to 60 hours to transfer toward a degree, having no limit for transfer hours with partnering Universities could allow any student to actually transfer in as a senior!! This is a HUGE consideration when it comes to debt!
To find out more of about this unique program go to http://uc.mclennan.edu.
We are blessed to have some great resources in our Waco community for growing financially healthy. Our area is also fairly unique in the amount of networking and collaboration being practiced, especially through the new and expanding Prosper Waco initiative. I have been actively involved in this amazing collective and see the growing influence and investment they are creating for our community. Please check out their website and resources at prosperwaco.org, as well as the recommended FREE, foundational curriculum adopted by Prosper Waco for financial training from the Dallas Federal Reserve Bank called “Building Wealth”. That material is available for a FREE download at https://www.dallasfed.org/assets/documents/cd/wealth/wealth.pdf
In my next blog, we’ll look at the 3 main financial ways that deficits in a monthly flow can be addressed and brought into balance. If you have any questions, please feel free to e-mail me directly: [email protected]
Phil Oliver is a retired educator. He is an independent Financial Coach, active mentor, and community activist. He has spent the last 8 years empowering individuals and families to take charge of their finances through his FLOW system. He is active in many community efforts to grow financial literacy and responsibility including Prosper Waco and Citizens for Responsible Lending. He consults with many local organizations to teach and inspire their efforts to empower clients in personal finances. You can contact him at: [email protected]
(Note: This is the first installment of what is intended to be an on-going series on financial literacy. Two of the Prosper Waco goals have to do with accumulating wealth: (1) Reduce the percentage of Waco-area households living without three months’ worth of savings if they were not able to work. (2) More than 50 percent of Waco households will have a net worth above $15,000. Our hope is that this series will help move our community towards accomplishing these goals both by sharing information about some of the challenges, complexities and practicalities of managing finances. — ABT)
by Phil Oliver
I write this blog NOT as a financial advisor but as a Financial Coach. The difference is not about money, but about relationships. As a coach over the past 8 years working with hundreds of individuals as well as churches and non-profits, I have observed many financial patterns both healthy and unhealthy that continue to impact valued relationships in peoples’ lives. Some of these patterns contribute to financial freedom, others to financial bondage. So, I offer to you in this blog series, my personal approach to helping promote financial freedom in our Waco community, as well as some of the observations, patterns, and choices I have seen that lead to financial freedom.
First, I must admit that this discussion will not simply be about money. Many components of a person’s ability to use money are bound and greatly impacted by the valued relationships in their lives. This is why I am a Coach and not an advisor.
The idea of living financially free is indeed a universal pursuit; however, successfully arriving there is highly complicated because it is not really a hunt for more but an understanding of contentment. This then gives birth to true freedom.
If I asked you, the reader, “How much money do you need to solve your financial issues?” No matter how the answer comes out verbally, it is usually summarized by, “just a little bit more.”
This answer is ultimately the telling symptom of our society.
Many believe that money is the complete answer to freedom and happiness, but I have found, and try to lead others to discover, that contentment with money is the real issue and that valued relationships drive that contentment impacting their finances on many levels. The guided pursuit of financial freedom then becomes a consideration, identification, and even discovery of patterns and choices in finances.
I have coached those are struggling just to make ends meet at or below the federal poverty, all the way to those who have substantial trust funds. The underlying reason for their financial frustration is…wait for it…they spend more than they make.
As a coach, I do not give financial advice, condemn, or convince. I simply listen to their financial goals and stories and then share information and patterns for them to consider.
I intentionally reframe the whole budget approach because most households who are struggling with finances…and life…don’t believe they have anything to “budget.” I call my approach for thinking about finances “FLOW.” My FLOW plan approach is totally dependent on the goal(s) that the person (and household) are committed to work toward to give them a sense of accomplishment with finances. I have consistently found agreement that they do have a FLOW of money and resources IN and OUT, and that right now something is NOT working for them.
My goal in a FLOW meeting is then to allow the “client” to authentically look at their FLOW and decide what they might want to change about their FLOW to achieve their current financial goal(s).
The entire process and conversation centers around the financial goal(s) for their household because of the relationships involved and the sacrifice that will be required of all participants once their REAL IN and REAL OUT is determined.
The secondary conversations occur after a deficit is found. This usually gives way to a discussion over personal spending habits and then moving to mutual sacrifice rather than simply self-sacrifice on the part of one individual. This is where EVERYONE in the household is encouraged to participate in the FLOW conversation and the process. I have found this to be critical for future success!
Finally, the goal-driven discussion will ultimately lead to possible changes and action steps that could be attempted or practiced based on past patterns and habits. I share my personal experiences, research, and experiences of many others to give each client ideas and reasonable steps to consider taking toward their financial goal(s). These self-determined changes then become the basis for their personal ACTION STEPS. I then continue the coaching by encouraging them to courageously practice these steps and let me know how they work——or don’t work. Both form the basis for continued, meaningful progress.
In my next blog, I will share how certain loans—payday loans, auto title loans, and even student loans—contribute to financial bondage for many in our Waco community.
Phil Oliver is a retired educator. He is an independent Financial Coach, active mentor, and community activist. He has spent the last 8 years empowering individuals and families to take charge of their finances through his FLOW system. He is active in many community efforts to grow financial literacy and responsibility including Prosper Waco and Citizens for Responsible Lending. He consults with many local organizations to teach and inspire their efforts to empower clients in personal finances. You can contact him at: [email protected]
By Alexis Christensen
I’ve long been drawn to understanding how governmental systems work—whether it’s politics, civic engagement or policy. Often we think about law or policies from an impersonal perspective, but in reality, they can be very personal.
In Part One of this series we learned about the devastating effects payday and auto title lending has on our residents and our city. Because of the negative outcomes produced by these loans, many believe now is the time for action. In the world of community development, the grassroots movement becomes effective in creating change when community members who have experienced, dealt with or struggled through the situation voice their personal stories and ideas into the work.
So let us turn to the voices of the community, who have dealt with the negative effects of payday and auto title lending firsthand. For a moment, let us listen to the voices of experience.
Ms. Lewis, tell us your story.
Lewis: I am a single parent of two kids. My son is 17 years old and chronically ill and I have a 19 year old daughter in college. I got into desperate times and needed money due to my financial situation. I have to travel a lot with my son [to visit doctors]. He requires medicines through IV and has frequent doctor visits. Then I found out my daughter had medical issues too. I kept seeing all these ads and signs, so I went and got an auto title loan.
Christensen: How was that visit?
Lewis: Well, when I got the loan they made me feel so comfortable and they were so friendly but come to find out they were wolves in sheep’s clothing. As a single parent, I am stressed. I am trying to keep up with the bills and sometimes it’s hard but I do what I can to manage. When it comes to payday lenders, yes they are so nice and sweet when you first come through the door but…I wish I had never done it because of the outrageous fees they charge with interest and the harassing calls…When my son was in the hospital, they called me just about every day threatening to come and take my car, it was awful.
Unfortunately, Ms. Lewis is not alone in her experiences with payday and auto title lending. Let’s hear from Mr. Thomas, who is a veteran.
Mr. Thomas, tell us your story.
Thomas: I was in school and temporarily unemployed and took out both an auto title loan and a payday loan to catch up on my water and electric bills and pay for school. I actually got a job in the same week I took out the auto title loan, but couldn’t keep up with the loan payments and had my pickup repossessed. The original loan was for $1,000 and the auto title loan was for $4,000. I’ve been charged twice the amount of the original loans.
I’ll be paying these type of loans off forever because of the interest. There is no way to catch up. Me and my wife are currently trying to adopt our nieces and credit issues have come up as an issue [in the adoption process].
Lastly, let’s hear from Ms. Marks.
Marks: A long while ago I got an auto title loan for $500 and ended up paying $2400 on the whole thing. Loan interest rate was about 800%. I belonged to a credit union and explained situation and they bought out the auto title and payday loan.
It was so hard to get a loan anywhere else besides a payday loan place. The stores keep calling and asking about getting another loan. At [a local payday loan store] I got a loan for $150 and I’m on the way right now to pay $51 in fees today to extend it for two weeks and it won’t go toward principal. I have 6 months to pay it in full.
If I could change anything about them, lower the interest rate. They get away with it [high interest rates] because they say they’re not the lender and they can’t do anything about it.
These stories have come from people right here in our community. These brave ones have shared some of their most vulnerable moments with us to help see change happen at the local level. This is why the ordinance to help address the issues payday and auto title lending create is vitally important to our community. The ordinance is one part of the solution; we also need sound alternatives and education to see true systemic change. Find where you fit in this work and help create a flourishing Waco for all of us.
*Some names have been changed to protect the identity of the community members.
Alexis Christensen is a Community Organizer at Waco Community Development Corporation (Waco CDC).