By Rosemary Thompson
Saving good things for later is often difficult. During this season of fall, keeping a good piece of pumpkin bread or apple pie for later, rather than having two at once is often difficult even though we know that it is best to pace ourselves.
At the Personal Investment Enterprise (PIE) program, we know that the same is true with money. It is difficult to save money for the future, rather than enjoying spending it when it is available. Saving for the future is what the partnership between Foothills United Way and Boulder County Community Action Programs promotes through PIE. It provides hope for the future with low-wealth individuals through a savings program.
PIE offers resources to help individuals and families save, and help them see that, over time, this can make a significant difference to future opportunities. PIE’s resources include:
- Financial education
- Individual Development Account: a matched savings account (4 to 1 match). For every dollar saved, $4 is matched, up to a total savings of $3,750.
- Community support provided through grants for matched savings funds and local partnerships in education and banking
PIE is an individual development account (IDA) program that empowers individuals to save for a permanent asset: homeownership, post-secondary education or business development. An asset is an investment of accumulated resources for the purpose of social and economic development (Definition form Center for Social Development). Assets are important as they promote economic household stability and decrease the risk of intergenerational poverty.
IDAs are a policy approach intended to help low-income and low-wealth families build assets and enter the financial mainstream. Based on the theory that increased income alone is not likely to move individuals and families permanently out of poverty, asset-building strategies promote and empower individuals to make economic choices that provide long-term benefits just by simply opening a savings account.
17 partner agencies collaborate with PIE to help identify, refer and counsel participants. Boulder County Housing Authority provides the financial literacy and homeownership classes. Wells Fargo bank provides bank accounts at no charge to the participants.
Many households today find themselves in asset poverty, which is defined as the Percentage of households without sufficient net worth to subsist at the poverty level for three months in the absence of income. In Colorado 21.5 % of the population is asset poor (2004). 14% are extremely asset poor with no net worth or negative net worth. Assets are necessary for financial stability, and to buffer personal and economic crises. They are essential for economic mobility, and for the well-being of the family. In addition, you may be interested to know that 60% of assets of the middle class come from home equity.
IDAs are gaining national recognition as more studies are being done on the importance of IDAs and how they help build assets for lower income wage earners. According to the Corporation for Enterprise Development (CFED), whose purpose is to create economic opportunity that alleviates poverty, over the last 10 years, more than 85,000 IDA’s have been opened at more than 1,100 sites across the country. The impact of these programs has resulted in 9,400 new homeowners, 7,200 purchases for education and 6,400 small business development purchases. CFED estimates that every dollar invested in IDAs yields a return of approximately five dollars to the national economy.
To date, 132 participants have graduated saving over $99,000 of their earned income combined. Of the 132 participants, 54 have purchased a home, 28 have invested in business and 50 have pursued post-secondary education. Currently, there are 89 participants in the PIE program. By creating investment opportunities for low-income residents, the PIE program is cultivating financial stability and empowering participants to become stakeholders in their own communities.
If you know of someone who may be interested in the PIE program, individuals must be at least 18 years old, meet income guidelines, be a resident of Boulder or Broomfield counties, have a valid social security number, maintain earned income, and have household net assets of less than $10,000 which does not include the first home or first vehicle.
For more information, please visit http://www.bouldercountypie.org for qualification information. You may also contact Nino Gallo, PIE program Coordinator at Boulder County Community Action Programs at 303-441-3998 or ngallo@bouldercounty.org or Rosemary Thompson, PIE program Coordinator at Foothills United Way at 303-444-4013 X 111 or rthompson@unitedwayfoothills.org
You may also like to visit our blog at http://foothillsunitedway.typepad.com/pieblog/ Join us as we work together to build stronger financial foundations and stronger futures in Boulder and Broomfield Counties.
Rosemary Thompson is the Program Coordinator for Personal Investment Enterprise (PIE)
