By: Cassandra Mickens
July 17, 2011
Program provides incentives
Chandra D'Avy's paychecks are spent before they hit the bank, so why even bother opening a checking or savings account, she reasoned.
The 42-year-old wife and mother of three puts in 15 hours a week at the Salvation Army of Metro Jackson, answering phones, watching the nursery and assisting with donations. Her husband is a painter, but work has slowed considerably.
"Right now it's paycheck to paycheck. We just go pay our bills and we might have $100 left over for the week for gas in the vehicles and incidental fees," said D'Avy, who lives in south Jackson.
"With the economy the way it is, it's kind of hard to save up."
At the urging of coworkers, D'Avy last November signed up for the Salvation Army's Saving Money And Recovery Training Project, better known as SMART. The yearlong program, sponsored by BankPlus, was launched after the Salvation Army cut 47 Angel Tree recipients who received help from other organizations.
Salvation Army Capt. Ken Chapman said SMART requires participants to save at least $10 a month for each of their children for Christmas gifts. The money is deposited into individual savings accounts.
At year's end, BankPlus matches the amount saved by participants, who exit the program with their first savings account. The final task is Christmas shopping with a SMART volunteer providing spending tips on site.
D'Avy's expected to save money for more than just Christmas gifts, as volunteers will regularly check in on her progress. She now sets aside $10 a month for her youngest child, a rising high school junior who wants a laptop. When D'Avy pays off her car in a few months, she'll contribute more to the account.
"Expenses for our daughter are adding up ... car, senior pictures, class ring," she said. "After that's taken care of, we're saving for the future."
SMART performs a double duty - urging families to financially help themselves while lowering the number of unbanked individuals in Mississippi.
Mississippi has the highest percentage of households without a checking or savings account, according to a recent study by the Foundation for the Mid South and the Mississippi Economic Policy Center.
The report shows 16 percent, or 184,000 households, are unbanked. That compares to 7.7 percent of the population nationwide.
Nearly a quarter of the state's households are considered "asset-poor," meaning the household does not have the net worth to sustain itself at or above the federal poverty level for three months without additional income. Mississippi's asset poverty rate is 23.8 percent, slightly higher than the national average of 22.5 percent.
The report also reveals 33.6 percent of black households in Mississippi are unbanked compared to 5.8 percent of white households.
"This is important when you look at the shifting demographics of Mississippi. There are more children of color than there are white children," said Ed Sivak, MEPC director. "It's important we have policies in place to build wealth and increase ownership for all Mississippians."
In addition, the report shows 7.4 percent of married households are unbanked compared to 31.4 percent of single-female-headed households.
Chapman said the majority of SMART participants are single mothers who attend a one-hour meeting at the Salvation Army the first Monday of each month to learn money management from banking professionals. About 50 women have expressed interest in SMART, and Chapman hopes to recruit at least 200 people for the next class - men and women alike.
"For some, this is the first time they've been introduced to banking. Some didn't know how to write a check," Chapman said.
"How do you expect someone to change unless you provide the resources to help that change?"
According to the study, the most cited reasons for being unbanked include high minimum balance requirements and too little income to need or want an account. Almost half, 44 percent, of Mississippi households with incomes below $15,000 are unbanked.
"People in low-wage jobs say, 'I don't make enough to go through all this,' " said Ivye Allen, president of the Foundation for the Mid South.
"Perhaps it's passed down generationally or it's driven by where they live. If you live in an area where you don't have access to financial services, you view the bank as not your friend or not welcoming."
Instead, the unbanked turn to alternative and oftentimes more expensive financial services such as money orders, check cashing and payday lending, the latter of which can lead to an unsustainable cycle of debt, Allen said.
Chapman, who has declared a "war on entitlement" at the Salvation Army, said initiatives like SMART promote personal responsibility.
"We want to bring transformation to the city of Jackson and break this cycle of poverty," he said.
"I know we're in tough times, but this is a pattern that has to stop. You must have a hand in your own improvement."