Change Agent of the Month: Richard's Story 

When Richard heard about Innovative Changes at a vocational rehabilitation networking group, his ears perked up. "I was having financial difficulties and needed help that wasn't available anywhere. After the meeting I looked at the IC$ website and felt like I could use everything offered there, so I decided to check it out," reflects Richard. "If someone gave you a key to a lock box with a million dollars you would take that key. IC$ was like that key for me."

Richard did in fact make use of everything he found on the website. He started off by coming to the four-part Financial Household Resiliency series. Living on a fixed income of Social Security every month, his budget was tight. At the classes Richard says, he learned "to ask questions so I don't just jump into something." He also learned to manage, plan and maintain a budget. "My budget has changed from a negative flow to a positive flow because of writing out my expenses, making a list when I go shopping and taking the smallest amount of money and putting it away makes the seed of saving grow faster."

Richard fully embraces the concept that a budget is a living document. He now saves all his receipts when he spends money and spends time looking back at everything, seeing if it matches the budget that he made the month before and reassessing whether each of his purchases was worth it. He then takes that information to make a new budget for the next month that seems more realistic, but also puts limits on his spending so that he still has room to save. With all this budgeting Richard says, " I am still maintaining my lifestyle but doing everything cautiously and prudently. I try to restrict myself by looking at the cost before I look at the opportunity."

On track with his budgeting, once Richard finished the classes, he was eligible to take out a credit builder loan. He wanted structure to hold him accountable to building his credit; the $12.50 monthly payments worked well within his budget and the incremental check-in's kept him motivated to keep thinking about improving his credit. Richard has been making on-time credit builder payments every month for the past six months.

Hungry for more, Richard came to us to see how else he could stay involved with IC$. Reviewing his goals, he mentioned that his plan was to go back to school for a degree in Business Management, but with past student debt he was not sure how he would pay for school. Since Richard had already completed most of the financial education requirements, had a good track record of making steady payments with his credit builder loan and most important, was determined to go back to school, he was a prime candidate for the IC$ IDA matched savings program. Richard attended an IDA orientation and promptly enrolled in the program. This motivated him to set up a meeting at Portland Community College to ensure that he had all the information he needed to start school. After successfully saving in his IDA account for three months, Richard will start school in the summer and be ready to make his first withdrawal by fall term. With his degree, Richard is thinking of eventually starting a mentoring business that works with youth.

As for his other goals, Richard expects that by August 2014, he will have paid of most of his student debt and have enough money in his savings account to take a vacation to Italy or the Philippines. He has already started researching airfare. He also is braced to become a coach for other clients at IC$. He has experience with all of IC$s' programs and would like to share his knowledge and lessons learned with others. His words of the wise for other IC$ clients are: "don't pressure yourself into doing something that will make the hole deeper than what you're already in. Listen to people's advice and choose the best options for yourself!"

IC$ thanks Richard for his contagious enthusiasm. He is a true change agent and we look forward to seeing him positively impact others and build community in his next steps!

Partner Spotlight: Katy Paul, Lutheran Community Services NW

 Lutheran Community Services Northwest, one of our newest partners, provides behavioral health services, family and community support, child welfare programs, refuges and immigrant services, violence intervention and prevention and senior and disability services throughout Washington, Oregon and Idaho. Over the past year, through asset building events and trainings, we've connected with Katy Paul who manages one of the most diverse and successful Individual Development Account (IDA) programs in the area. Keep reading  to find out why Katy does what she does and the lessons she's learned from working with people from all over the world!

What's your role at LCSNW and what drew you to this work?

My role at Lutheran Community Services NW is primarily the IDA Specialist and I also do some medical billing for our mental health department.  I graduated school with a degree in Sociology with a focus in direct service and never saw myself doing something that at first I deemed as "business" or "finance," but as I learned of the complexity of life's challenges and the importance of balance, I have been continually drawn into this work. It is an amazing mix of case work and coaching individuals who are struggling paired with giving them practical skills which together, propel folks who are willing and engaged to succeed in any area of life they wish.  

What is it like working with clients from all over the world? What lessons have you learned from this?

Working with people from all over the work has been incredible- I wouldn't change it for the world despite the challenges I face (language barriers, cultural misunderstandings, and bridging other gaps). My clients are continually so gracious with me as I strive to do my best to understand and assist them. A key lesson I have learned from this working environment has been to keep things simple. You can cover very profound topics in a simple way, you just have to be creative. I also think that the basic skill of active listening and asking good (or the right) questions is a difficult one, but also very important. The biggest lesson I've learned and what I'm most passionate about is building relationships- I hope to be available and active in each relationship I build with clients. This takes lots of time and often I feel like I am the one benefiting, but it is incredible to see the results of success when there is a relationship at hand. 

What excites you most about IDAs/asset building?

Asset building excites me because it is cutting edge:  it is an empowering service rather than one that chains recipients into a revolving system. It rewards hard work and has foundations in education and skill building- all of which are extremely important for success. It is an opportunity unlike any other and allows people to connect with their community by both receiving and giving back.  

How does Innovative Changes' work link with the work you are doing at LCSNW?

IC$ does incredible work and it is awesome to be able to refer folks into an agency that strives to provide quality education as well as offer services that we aren't set up or qualified to provide at this time. We have folks that will definitely be working with IC$ in the future as you provide services such as the credit building loan which will help people with goals post-IDA and for some, concurrently as they work through the IDA program. 

When are you due (Katy is  pregnant) and when/how will start teaching your kids about finances?

I am due at the end of July or early August... due date is July 29th, but we'll see... tardiness tends to run in my family :) My husband and I are both passionate about having goals and most of them pivot around budgeting and healthy finances. We communicate all the time about our budget so by default but also intentionally, our children will have a lot of exposure to communication about finances. This will just be part of life for them and we will also work individually with them as they gain abilities to comprehend goal setting, saving, and value of time and money. 

We are interested in teaching them about setting goals and figuring out what it takes to plan for them. We also intend to start a college savings account for our kids that they can perhaps contribute to as well. We will challenge our kids to save up for things they want, earn what they can't afford immediately, and to keep open hands knowing that all we have has been given to us.  

Last month Economic Fairness Oregon (EFO) came out with a report highlighting the impact of the Oregon Payday Loan Reform Act which was passed in 2007 and sponsored by former House Speaker Jeff Merkley and former State Representative Suzanne Bonamici. Because of this legislation consumers have saved an average annual amount of $41.25 million a year avoiding payday loan fees and there has been a 73% reduction in storefront payday loans per year. This is huge progress! However, every day at IC$ we see consumers who are in a cycle of debt due to predatory or payday lenders so we know that there is still work to be done!

Right now, the average payday loan borrower flips their loan twice.  "Flipping" is when a payday lender agrees to a borrower's request to "roll over" the payday loan to a later due date. This "roll over" is financed with fees paid by the borrower. On a $500 pay loan that was flipped twice, the total finance charge would be roughly $133.00 with an APR of 118.304%-- thus starting the cycle of "quicksand" debt.

Opportunity Loans vs Payday Loans

One the top uses of our opportunity loan is to pay off high cost debt such as payday loans.  This use enables our borrowers to get rid of very expensive debt and get out of this "payday lending loop".  While the payday lending legislation certainly made a difference in the amount of interest and fees that payday lenders can charge and regulates the amount of times a borrower can flip a loan, it is still a costly, risky and as we've heard clients say, a "demoralizing" way to finance one's needs.

On a $500 opportunity loan that is amortized over a 12 month period, the total finance charge is about $75 with an APR of 28.02%. At half the cost, our loan is clearly more affordable, and the $45 monthly payment fits into the borrower's cash flow a lot better than a two week payday loan.  

In addition to paying off high cost debt, opportunity loans are often used for housing expenses, car repairs, medical emergencies and to pay down past utility bills.Our borrowers can choose to have their payments reported to the credit bureaus and our coaching is always available to borrowers if they wanted to work on their credit, budgeting or strategies for avoiding high-cost debt in the future. 

If you are interested in learning more about our Opportunity Loans, please contact Emmy.

Financial Education Galore:

Upcoming Financial Household Resiliency (FHR) Workshops:

 

Teaching Kids About Money

Sunday, June 9th, 2-3pm at the Northwest Library

Thursday, June 20th, 10:30-11:30am at the Alder Elementary School

Sunday, July 14th, 3-4pm at the Capitol Hill Library

 

Tackling Student Loan Debt  

Monday, July 15th, 6:30-7:30pm at the Holgate Library

 

These seminars are free and no registration is required. Visit our website for a description of our seminars.

We are thrilled to announce that we are opening enrollment for our Individual Development Account (IDA) program this June. The IC$ IDA program offers a 3:1 match for those saving to attend an institution of higher education. Savers must put at least $25 into an account every month, complete financial education requirements and plan to go back to school or already be attending school. Savers can save for themselves or a loved one. 

If you are interested in the IDA program, or know someone who may be interested,come to our next orientation which will be:

• Wednesday, June 12th, 12-1pm at our office in Suite 2010 of the Lloyd Center. 

Register for an orientation here or call Misha at (503)-249-5205. For more information about the IDA program visit our website .

Thank you for your support! 

 Read the full list of our partners >