Thoughts on Economic Advocacy

Credit Building-Some Thoughts to Consider

2011-04-19T11:05:00.000-07:00

Working to improve our credit score doesn’t necessarily mean opening a new line of credit and starting to make payments. One of the first steps on the journey to build your credit is knowing what is on your credit report. If you haven’t looked lately, you should check it out. You can visit www.annualcreditreport.com, and get copies of your report from all three bureaus. Beware of companies that offer “free credit reports” but require you to put in a credit card number prior to pulling your report. Often times, this enrolls you in a program that will charge your card monthly.

Also, before pulling your credit report, consider if it is safe for you to do so. Are you using a computer where your activity can be tracked? Is someone trying to locate you, who might have access to your report? Anybody who has your social security number and date of birth could potentially access your report. The address you enter to pull your credit report will be listed, and anyone who pulls your report will see your address. If you are concerned about the safety of pulling your report in anyway, please contact an advocate at ROW at stlrow@sbcglobal.net, or an advocate at the National Domestic Violence Hotline (1-800-799-SAFE), to talk through potential safety risks of pulling your report.

Once you have pulled your report, review it for any old or inaccurate information. Checking your name, date of birth and social security number is a good place to start. From there, you want to see if there are any collection accounts with a date of last activity (DLA) greater than 7 years, or an account paid as agreed older than 10 years, if there are, highlight them. Next see if there are any accounts you don’t recognize or didn’t authorize be opened, highlight those as well. Once you have completed these steps, mail a letter requesting that old items be removed, and disputing any accounts that are not yours. Taking these steps will increase your score without costing you more than your time, few sheets of paper, and postage.

Something else to consider when building your credit are alternative, or nontraditional lines of credit you might have. Do you pay for daycare, a cell phone, or utilities? Anything that you can show you paid on time for a minimum of 12 months is considered a positive line of credit. Ask your daycare provider, cell phone provider, or utility company for a credit reference letter identifying the number of months (12 or greater) that you have paid on time.

Finally, remember to try to pay bills on time, or at least prior to 30 days late, and keep records or receipts from bills you pay regularly and on time. Review your credit report a minimum of annually to dispute any old or inaccurate information, and avoid opening/closing several lines of credit at one time. Happy Credit Building!

You have your income tax refund, now what??

2011-03-08T10:31:00.000-08:00

Now that you have your refund, what are you going to do with it? A lot of us have plans on how to spend that extra money before we even file our returns. Pay off debt, get some new clothes, take our kids to do something fun-the list goes on and on…

Go back and look at the vision you drew at the end of last year. If you didn’t draw a vision of what your life will look like in 5 years, take a few minutes draw one now. Not just your financial life, but your whole life, your job, your spirituality, your family, your home, etc. Now, think about how the money in your refund can start to help you move towards some of those goals. For some of us, it might be starting a savings fund for school, others of us might choose to pull our credit report and pay off debt, or pay back a family member we owe money to. If you don’t know how you want spend the money, put it in a savings account or a CD until you know how you want to make that money work for you!

Also, I encourage you to think about starting a small emergency savings account. Having an emergency account no matter how big or small can help out when unexpected medical bills, car repairs, or other surprise expenses come up. Another idea: take some money to do something fun for yourself and your children-you deserve it! Next time, we’ll talk about credit building!

Tax Time!

2011-01-25T12:36:00.000-08:00

Refund Anticipation Loans (RALs) are short-term loans offered through tax-preparation agencies as a means for consumers to receive their tax refunds early. Rather than waiting to receive their tax refunds, consumers receive money up front by paying a fee ($50-100), and the tax refunds go towards repayment of the loan.

This spring, H&R Block announced that they will no longer be offering RALs. This comes because the IRS announced that they will no longer provide tax preparation centers with a debt indicator (essentially a credit check) which the tax prep centers use to determine the consumer’s risk level. Instead, H&R Block plans to offer Refund Anticipation Checks (RACs). RACs are being used as a way for those without bank accounts to receive tax refunds when H&R Block files your return electronically. Rather than receiving their refund in the mail, consumers receive the refund (minus any fees), via one of three ways: a prepaid Mastercard, direct deposit, or via check (for an additional fee).

The important thing to note here is the amount of time it takes to receive a refund. With the RAL program, consumers can access their money faster because of the loan, although they are paying high fees for this service. With the RAC program, consumers still must wait 8-15 days to receive their refund, in addition to paying a fee. A consumer can electronically file taxes on their own, or through a free tax preparation site, and receive the refund in the same amount of time without paying any fees. For those who do not have access to a bank account, it may be less expensive to pay a check-cashing fee than to pay preparation and processing fees that may be charged through one of these services. Adapted from redtape.msnbc.com

Many communities offer sites for free tax preparation. If you are in the St. Louis Metro Area, please visit the link below to see if you qualify, and to find a date and time that works for you to file your taxes!

http://www.gecc.us/15302.html

Nationally:

http://www.cbpp.org/eitc-partnership/state-links.htm

After filing your taxes, take some time to plan what you might do with your refund. Think about your emergency fund, money you may owe to creditors or family members, and doing something fun for yourself and your children. We can use our refunds to work towards the vision that we have for our future, and to do a little something nice for ourselves now!

A few things to remember as 2010 winds down

2010-12-21T12:03:00.000-08:00

As advocates, the end of the year is often a very busy time. We are wrapping up groups, having individual appointments, planning for some down time, and also planning for 2011. As we are approaching the beginning of a new year, we often reflect back on our experiences, challenges, and successes. I find that most often, people reflect on challenges or mistakes more than successes. So, just as you would with a survivor sitting beside you, I challenge each of you to think of something you have done in this last year that was a success, and while you're at it, think of a financial success as well! This can range from purchasing a car, to getting our bills paid, to getting to work and supporting survivors every day.

And as you begin to think about 2011, think about your (yes, advocates, take some time for yourselves!) 5 year plan, and what steps can move you towards those goals. If you haven't drawn your five year vision in awhile, take some time to do that--think about your life in 5 years, all aspects (financial, family, spiritual, education, etc), and draw a picture of what that will look like. Think about one thing that you can change that will move you towards those goals.

Finally, don't forget to start watching for information to pass on to survivors about applying for the Earned Income Tax Credit (EITC) and free tax preparation sites in your area. This can save lots of money, and put the whole refund in survivors' (and your) pocket! In January, we will have more information about EITC and tax preparation, so hold on to those W-2s, and watch for the info to come!

Reflections from New Facilitators

2010-07-20T12:43:00.000-07:00

At ROW we often have social work practicum students working in our REAP program. As the summer semester comes to a close, we asked our current students to share with you their reflections on learning to facilitate REAP. Here they are:

As new social work practicum students at Redevelopment Opportunities for Women (ROW), we have had the privilege of becoming ROW’s newest REAP facilitators in St. Louis. Because we are completing a two semester practicum at ROW, we were able to participate in the extensive training required for REAP facilitation. Although we are still learning, we have greatly benefited from the experiences and training we have thus far received. Even though we hope to have increased financial education and awareness in our sessions, we cannot fully express our gratitude for the understanding we gained from the women served.

Throughout the course of our first semester at ROW, we prepared to facilitate by shadowing current REAP facilitators, attending training workshops, and studying the facilitators’ curriculum. During this time, we realized how little we understood about certain financial issues such as credit and how difficult financial systems are to navigate without informed support. We were also able to recognize our own privilege in easily accessing said informed support, while realizing how easily incorrect information circulates through any community.

Although we were both apprehensive about facilitating our first classes, we had the support of ROW staff and therefore felt confident about our first experiences. Discussions of power and control as well as privilege and oppression proved to be especially powerful, as we witnessed women begin to understand how these structures played a large role in their individual lives. From the first few sessions, we found ourselves surprised with participants’ consistent involvement in the power line activity, an interactive exercise in which women explore privilege and oppression through race, gender, sexual orientation, age and so on. We find this activity breaks the ice and fosters a more close-knit environment.

Throughout the course, participants, with varying degrees of financial knowledge, explore challenges such as thinking about Cost of Living Plans instead of budgets, the complicated system of credit as well as banking and investing. For instance, while one woman may know a great deal about predatory lending, she may know very little about banking institutions. REAP is a unique program because it combines safety planning for women who have experienced intimate partner violence with financial education. The necessity of this type of program becomes increasingly apparent in every class through participants’ questions and concerns.

Each class poses a different set of challenges for us as new facilitators. Some are simple logistical problems such as lack of chalk or white boards and other supplies at different sites. However, the diverse range of sites also changes the dynamics of the group and create broader challenges. For example, ROW, shelters and other outreach sites each have unique environments, which prompt facilitators to tailor their classes accordingly. Other challenges include correcting prejudicial language without judgment as well as redirecting conversations back to the topic at hand.

All in all, this experience has been and continues to be both insightful and humbling. As previously stated, we have learned a great deal from the women participating in our classes. For this we are especially grateful.

Banking Access

2010-05-26T08:37:00.000-07:00

Access to safe and secure banking services has been seen as a critical part of individual financial freedom in America for generations. It allows safe keeping of liquid assets, confers interest on accounts, and is a critical step in accessing credit markets. With the rise of electronic banking, a new set of privileges such as having access to direct deposit of paychecks, on-line or automatic bill pay, and the ability to closely monitor account activity, make banking services that much more integral to navigating American society. Yet many women coming out of domestic violence situations may be “frozen out” of banking services because of previous negative banking relationships. Most banks in America participate in ChexSystems., which describes itself on its website as a network that “is comprised of member Financial Institutions that regularly contribute information on mishandled checking and savings accounts to a central location. ChexSystems shares this information among member institutions to help them assess the risk of opening new accounts.” Because information about accounts is accessible not just to an individual bank, but to all banks, the fact than a woman’s partner might have destroyed her ability to get an account at one bank through fraudulent means does not just affect her relationship with that one bank, but may prevent her from getting access to banking services at any financial institution.

As advocates, we can take steps to help women regain access to banking services. Find out if your community has a program to help individuals “rehabilitate” their bank history, such as Missouri’s Get Checking program. Reach out to local banks or credit unions to learn their policies, as some local institutions may be able to provide limited banking services to participants with a negative ChexSystems report. These institutions may be able to offer accounts without a debit card or with slightly higher minimum deposits.

If you are working with a woman who is unsure about her banking history, she can access her ChexSystems report once a year for free. To see a ChexSystems report, go to www.chexhelp.com, or call 1-800-428-9623.

Identifying Economic Abuse

2010-04-21T11:38:00.000-07:00

Survivors of intimate partner violence may experience many forms of abuse, including emotional, physical, and sexual violence. At ROW we address another form of domestic violence that doesn’t get as much attention: economic abuse. Economic abuse may play out in a number of ways, and it often overlaps with other forms of abuse. For many women, finances can impact their decisions about staying, leaving, or returning to a partner, because they may experience multiple economic losses as a result of leaving a relationship. They may lose any of the following: their job, housing, transportation, or their main source of income, and they may experience the loss or damage of important possessions. For domestic violence advocates, being aware of the many forms that economic abuse can take is critical to supporting and standing with survivors.

Some forms of economic abuse include:

Controlling the financial resources (checkbook, income, gas money, etc.)

Destroying credit (Taking out lines of credit in her name, letting her car become repossessed, paying bills late to destroy her credit score)

Taking her money (stealing cash, checks, or money from the ATM)

Making her ask for money or giving her an allowance

Controlling access to financial information (not telling her about life insurance policies, not allowing her to have access to the checkbook or account information)

Gambling or spending away life savings

Demanding details of how money was pent

Not allowing her name to be on accounts

Not letting her talk to others about money

Devaluing her financial contribution

Expecting her to “behave” a certain way because he makes more money than her

Preventing her from having or keeping a job; or destroying homework for school

Women, Credit & Empowerment

2010-04-07T10:00:00.000-07:00

For survivors of domestic violence, the impact of an abusive ex-partner may be seen in many aspects of their life. The physical, emotional, and economic scars of a previous relationship may create barriers to achieving new goals and making desired changes. One economic impact of domestic violence may be a negative or non-existent credit history. Credit can be used as a tool of power and control in relationships in several ways. An abusive partner may access multiple lines of credit in their partner’s name without her knowledge or consent, or may prevent her from having her name on accounts and bills, limiting her credit history even as she is actively contributing to the payment of joint obligations. Women may not be aware of the extent of this relationship dynamic until they begin attempting to get utilities or credit in their own name, only to discover that they have many outstanding debts of which they were previously unaware, or that the payments that they have been making were not for an account in their name. When women make these discoveries, having knowledgeable advocates who can work with them to address credit concerns can open doors that may otherwise remain firmly shut. For advocates, it is important not only to know how to read, explain, and address issues presented by a credit report, but also to know how to work supportively with women around these issues, instilling a sense of hope and possibility in the face of this new negative information.

Engaging in this work with women is important because a credit history can be a powerful tool in our society. A good credit history can lead to better financial terms on things like credit cards, car loans, and cell phones. More importantly for many of the women we work with at ROW, good credit can impact job searching and house hunting. Many employers ask to look at a potential employee’s credit history in the job search process, and here in St. Louis, we are finding that most landlords use the credit report of potential tenants as a screening mechanism.

If you want to enhance your skills at working with women around credit issues, consider attending ROW’s Economic Training Institute, a three day workshop for advocates addressing economic empowerment for survivors of domestic violence. Check back to our website front page soon for dates for our upcoming conference in St. Louis!

Spending Leaks

2010-03-09T12:25:00.000-08:00

I have been thinking a lot about spending leaks recently. Both in my own life and in working with participants, those extra few dollars that seem to disappear each day have become a major theme. In the REAP curriculum, we officially define a spending leak as “a reoccurring expenses that is not included in your cost of living plan” and list examples such as soda, cigarettes, birthday gifts, and dollar store ‘goodies.’ In REAP class, I often define a spending leak as “how that $5 you started the day with turned into $2.” For me, this tends to be through the purchase of beverages of various types. For others, it might be things like buying cigarettes by the pack rather than the carton, vending machine or drive thru food, purchasing things because they are on sale, even if they aren’t really needed, or buying candy in the grocery store line to keep kids under control. The things all spending leaks have in common are:

1) They are not accounted for in some one’s budget, causing shortfalls at the end of the month.
2) Spending on them may be able to be adjusted, eliminated, or added to ones cost of living plan if you want to make a change.
3) Their cost adds up over time.

For example, I have a habit of spending around $3.00 on various beverages about 3 days a week, through a combination of drive thrus, coffee shops, and vending machines. Each individual purchase is small, but the cost over time adds up, as we see below:

$3.00 x 3 times a week = $9 a week
$9 a week x 52 weeks =$ 468 a year
$468 / 12 months = $39 a month

Knowing this gives me information, and power. I can choose to add $40 a month to my cost of living plan to account for it, I can choose to curtail my beverage habit, decreasing my consumption and opening up money to use for other purposes, or I can choose to continue at my current rate (3 times a week) but purchase cheaper drinks. Many of our participants, even those on very restricted incomes, have spending leaks that they can make choices about. As an advocate, you may be able to sensitively help participants identify and think through their spending leaks, helping them find where that last $20 is going to come from to balance a budget or to put toward paying down debt.

The Credit CARD Act of 2009 & Economic Advocacy

2010-02-23T12:41:00.000-08:00

The average American household had $8,329 in credit card debt at the end of 2008 (Source: Nilson Report, April 2009). In particular, young adults are quickly finding their income eaten up by debt payments. On average, young adults with credit card debt now spend nearly 24 percent of their income on debt payments (Source: "Generation Broke: Growth of Debt Among Young Americans"). Survivors of intimate partner violence may find themselves with credit card debt that they had little or no control over or that they were previously unaware of, while having limited means to make rising monthly payments. Working with survivors to address the impact of credit card debt is an important part of an economic advocates’ role in supporting women’s efforts towards financial freedom. Recent legislation changes have provided women with some additional tools with which to do this work. The Credit CARD Act of 2009 increases credit card consumer protections and outlines changes to monthly credit card statements. In particular, enhanced consumer disclosure requirements can use useful for advocates and survivors in their efforts to develop a credit card debt action plan. These requirements, all of which took effect on February 22, 2010, include:

• Credit card companies will be required to post all of their credit card contracts online at www.federalreserveconsumerhelp.gov where they can be easily referenced, even if a survivor does not have current access to her contract

• Credit card companies will be required to disclose penalty rates, grace period rules, and fee structures in easily understood language.

• Credit Card Billing Statements will now include the following:

o Interest charged by the type of transaction

o Year to date total of interest and fees charged

o Current APR

o What will happen in a survivor makes only minimum payments, including what the repayment time will be and the total amount of interest she will pay

o The monthly payment amount necessary to eliminate debt within 36 months

o A toll free number with consumer information and credit counseling

o A toll free number for questions about the billing statement

o A negative amortization warning-meaning the survivor is in a situation in which she would never get out of debt if she only makes the minimum required payment each month.

We hope these and other changes will benefit survivors of domestic violence in their efforts to gain financial freedom. Please share in the comments section if you have other thoughts or questions about how to use these regulation changes in economic advocacy.

Welcome to Our Blog!

2010-01-19T14:10:00.000-08:00

Welcome to the first installment of R.O.W.’s economic advocacy blog! We at R.O.W. have been engaging in the exciting and challenging work of economic empowerment with survivors of domestic violence for the past 10 years. We plan to use this blog as a way of sharing our experiences and expertise with other advocates, participants, and leaders in the areas of domestic violence and economic empowerment. Our R.E.A.P. (Realizing Your Economic Action Plan) curriculum has been implemented in many settings- at domestic violence and homeless shelters, transitional housing programs, in faith communities and at outreach locations at community colleges and other social service agencies, and in many places throughout the United States. It seeks to provide a foundation for advocates and leaders who want to provide information and tools that can give women hope for their economic future, and help them in critically examining the connection between money, safety, and power in intimate relationships and in our society. We also work with women through our Individual Development Account (IDA) program, supporting women in reaching their economic goals through matching their savings. Finally, we work with women one on one to reach their goals around credit, banking, saving, and investing. If you have participated in the REAP Institute, our training and technical assistance arm, we hope that this blog will be a way of keeping up with new information and opportunities related to economic advocacy with women. If you want more information on working with women around economic issues, we hope that this space will provide a starting point for your thinking. Some of the topics that we will be blogging about include women’s experiences of economic abuse, the challenges of facilitating REAP classes and the techniques we use to address them, new information we learn about credit, banking, and saving, news and information about the REAP Institute, economic issues facing specific groups of women, helpful resources, strategies for supporting women around their economic goals, and economic safety planning concerns. Please check back frequently for contributions from different members of our REAP team!