By Michael T. Hughes, CEO
More than half of Americans say they would flunk a finance quiz regarding basic savings and economic concepts, according to the Motley Fool.
Another study by Bankrate.com found that 63 percent of Americans don’t have enough in a rainy-day fund to cover emergencies that might run them anywhere from $500 to $1,000. Many people in the study said they would have to use a credit card or borrow from family or friends if they had an unexpected expense.
It is tax season and A New Leaf is increasing its support for residents of the Valley with critical financial programs – working to encourage personal savings and financial literacy. Too many individuals and families live their lives on a knife’s edge, falling into crisis after crisis without a safety net and the knowledge or skills to plan ahead.
That is why A New Leaf is a community partner to the national campaign America Saves, which is being promoted this month across the Valley of the Sun. The campaign encourages consumers to invest some of their tax refund into a savings plan, which is a bulwark against emergencies or unplanned events. The campaign’s website, AmericaSaves.org, has many helpful tips and suggestions for saving.
Another important financial service provided by A New Leaf this tax season is the Volunteer Income Tax Assistance (VITA) Program. For those families who earn $54,000 or less and need assistance with tax preparation, A New Leaf is now offering free tax preparation by IRS certified volunteers at our MesaCAN office and multiple sites across the West Valley, making sure those eligible receive the Earned Income Tax Credit (EITC), refundable tax benefits that put money in people’s pockets. A New Leaf wants to make sure that everyone who is eligible receives EITC credits and claims the credits so that they can receive the full amount of their refunds.
The program has been very successful both nationwide and in the state of Arizona:
• Last year the VITA program filed 3.4 million Federal Returns nationally, an increase of 27 percent since 2010.
• In the state of Arizona, 16,693 returns were filed with Earned Income Tax Credits claimed.
• $29.7 million in Earned Income Tax Credit refunds came back to the state of Arizona.
Through VITA, Valley residents are able to reinvest back into the local economy with their tax credits, using refunds to pay off debt, invest in education or housing or open a new bank account. The program is vital in sustaining the economy and driving self sufficiency. Research from the Center for Economic Development indicates that the national VITA program has a $204 million impact on the economy. Without VITA, these tax credits would not be invested back into the community at the level they are today.
For its part, A New Leaf plays an important role in the community to engage individuals to take control of their finances. A New Leaf offers financial coaching and savings advice through VITA and also at its MesaCAN Office where Valley residents can find a helping hand to navigate their personal finances. If individuals become financially educated, they will be more likely to save and to make good decisions about their purchases and finances.
A cornerstone of A New Leaf’s financial services is the Individual Development Account (IDA), which is a savings account designed to help working individuals and families save for home ownership and education. A New Leaf encourages smart savings which can pay off in a big way later for families. Upon completion of the IDA program, matching funds are available to amplify the positive effect for A New Leaf’s clients.
Through the tireless efforts of volunteers and staff, A New Leaf is truly making a difference in the Valley of the Sun – preparing residents for a firmer financial future and a chance to invest back into the community. It’s about teaching the life-changing skills that will help generations of Arizonans to come.