Interesting article in the NYTimes: Can Poor People Be Taught to Save?
Why can’t poor people save money? Part of that psychological barrier… was social pressure to not save; the minute people got a little surplus, friends and family would start asking for loans. There were other obstacles too. People in both communities feared losing welfare benefits if they accumulated cash. Many families didn’t even define savings monetarily; they talked about the things they would sell in desperation – baseball-card collections, heirlooms or other low-value assets.
Enter AmericaSaves.org. What is America Saves?
America Saves is a nationwide campaign in which a broad coalition of nonprofit, corporate, and government groups helps individuals and families save and build wealth. Through information, advice, and encouragement, we assist those who wish to pay down debt, build an emergency fund, save for a home, save for an education, or save for retirement.
It’s a social network changing the peer pressure in poor communities from spending and lending to saving. According to the article, “about nine million households have effectively no financial assets – nothing to fall back on for emergencies or retirement.”
Banks help out by joining the program and creating accounts that charge no fees and have no minimum balance requirements. Amazing.
Something credit unions should get involved with. Creating wealth and assets for those with none. Banking for the under-banked and under-served. Hey, isn’t that already our mandate?
PS: Thanks for the link, Rob