Saving for education, homeownership goals

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Daily Record
By: Amanda Gallagher
August 17, 2013

WOOSTER -- A local United Way initiative is allowing low income residents to receive $2 for every $1 they save toward a specific goal. Despite the fact the matching funds have been available to Wayne County residents since 2010, only a small handful of people have taken advantage.

The Individual Development Account program is a matched savings initiative that helps individuals build assets through home ownership or post-secondary education.

IDA program participant Catherine Papp started out using her matched savings fund to alleviate her student loan debt.

In May 2012, she graduated from college with bachelor's degrees in German and international relations. When she returned home from school, she couldn't find a job and wasn't sure how to move forward. Papp started working one full-time job and a second part-time job. Papp was at work one day when United Way Executive Director Brenda Linnick stopped by to give a presentation to some of the employees. During Linnick's visit, Papp was able to get a hold of a flier with information about the IDA program. She later called United Way to get more details.

She was surprised to find out the program that seemed too good to be true really was what it seemed.

"It really is as simple as it looks on paper," she said.

After some time, Papp decided she wanted to continue her education. So this fall, Papp will head back to school to pursue her master's degree in international business.

She will now use the money saved through the IDA program to offset the cost of graduate school.

The IDA program has been available through the United Way of Wayne and Holmes Counties since 2010 when the agency was awarded the federal funds. United Way worked with local financial institutions, including FirstMerit Bank, First National Bank, PNC Bank and Wayne Savings Bank, to raise $22,000 to be put toward the program. The local funds were matched by federal dollars. The total funds are available to help lower income citizens reach specific goals, such as furthering their education or becoming a homeowner.

Participants of the program must meet certain requirements, plus be willing to work hard and stick to a budget. Linnick explained that individuals must save a minimum of $40 per month in order to receive the 2 to 1 matching dollars. The funds go directly toward the desired asset, such as student loans, tuition or a down payment on a home.

Linnick clarified that the funds can be used for a variety of types of post-secondary education, including job training and vocational training, or any type of added education that enables them to move up in their job.

"The idea here is to move people on this continuum," said Linnick. "It's a model ... to establish themselves to have assets and a little bit of stability."

The program is meant to be "a portal of entry," Linnick said, that helps offset the cost of an education or a home, and set people on the road to financial independence.

"This program really is designed to give them a hand up toward building assets," said Linnick.

In order to use the IDA program, individuals must have an income below 200 percent of the poverty line, be at least 18 years old, be a Wayne or Holmes resident for at least 90 days and have a source of earned income and a net worth less than $10,000.

As part of the IDA program, individuals have to participate in financial education. United Way collaborates with the OSU Extension in Wayne County, which provides the Master Money mentoring program.

Individuals who participate in the program meet one-on-one with a mentor to learn the basics of budgeting.

Papp said she found the financial education to be very helpful.

"It really just teaches you basic budgeting skills," she said, adding it helped her put a stop to unnecessary spending, even for items as small as a candy bar.

"It really helped me distinguish between needs and wants," she said.

United Way collaborates with multiple other local organizations as well, including Habitat for Humanity. For example, participants of the IName

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This page contains a single entry by CFED published on August 20, 2013 4:35 PM.

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