In the United States, 41% of adults gave themselves a grade of C, D, or F on their knowledge of personal finance (2009 Consumer Financial Literacy Survey, The National Foundation for Credit Counseling). In light of the diminishing national savings rate, the Alabama Asset Building Coalition (AABC) was formed to promote financial stability by facilitating savings, financial education and other wealth-building programs.

The Alabama Asset Building Coalition South Alabama Region (AABC-SAR) aims to address this crucial need by focusing upon Financial Literacy, Volunteer Income Tax Assistance and Individual Development Accounts. The Community Foundation of South Alabama is one of the Coalition’s lead agencies. AABC-SAR partners include nonprofit organizations, education, financial institutions, FDIC, IRS and the Federal Reserve Bank.

“‘Those who cannot learn from history are doomed to repeat it.’ This quote from George Santayana should not be taken lightly. As our nation works through the worst economic crisis since the Great Depression, we must ask the question, how do we learn from this experience and not repeat our mistakes.

While the government drafts new regulations and rules to prevent a recurrence, a more basic question should be addressed. How can we better equip consumers to make more informed and better financial decisions? It is from this foundation of better knowledge and education that our economy will prosper and not be doomed to repeat the mistakes of the past.

While we cannot make an impact upon the entire country, we can impact South Alabama. The Asset Building Coalition is the corner stone of an effort to bring all of the resources in our region together to better equip our neighbors for future economic success. Financial Literacy must be the foundation that prevents the mistakes of the past and equips our neighbors to live a more fulfilled and rewarding life,” AABC-SAR Chair - Robert R. Jones, President & CEO, United Bank, Atmore, Alabama.

The Volunteer Income Tax Assistance (VITA) Program provides free tax assistance and its volunteers have prepared millions of tax returns for low to moderate tax payers. These families are also eligible for Earned Income Tax Credit (EITC) which is a refundable tax credit that “makes working pay”. The amount of the credit is determined by annual earned income and the number of dependants. Eligibility for this federal income subsidy requires the person to be employed. EITC and VITA are a crucial part of the work performed by AABC-SAR.

The third focus if AABC-SAR is securing funding for Individual Development Accounts (IDA). Through the efforts of The Community Foundation of South Alabama in partnership with the United Way of Central Alabama over $55,000 has been made available for IDAs in the South Alabama area. These special matched savings accounts help participants save earned income. For every dollar deposited, one dollar is matched by a local fund and another dollar is added from the federal fund. The participant can accumulate up to $2,000 in their account which provides a total of $6,000 that can be used to buy a first home, capitalize a small business or used to pursue post-secondary education or training.

By promoting financial stability for South Alabama families the coalition hopes to create an economic foundation that will help our community reach it highest potential.

 

August 2009