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Tom and Sue have 12 credit cards totaling $34,000 in debt. All have a balance due each month. With a three- year-old child to raise and a second baby due soon, the couple knew they needed help.
Like many who walk through the doors of Catholic Charities of Northeast Kansas’ emergency assistance centers, Tom and Sue had never learned the basics about finances. They were not taught how to manage their income, budget their expenses or save for an emergency.
“It is difficult to change what you don’t know,” explains Amelia Reyes, Director of Asset Development. “Understanding your finances, however, can be life-changing. It is key for those wanting to regain economic stability.”
With guidance from a case manager, Tom and Sue enrolled in Catholic Charities’ Family Financial TransformationsTM (FFT) program. Participants receive financial classroom instruction as well as individualized budget coaching and personal goal development throughout a 12-month period. Afterwards, participants have the opportunity to continue to meet with a volunteer financial mentor focused specifically on that family’s financial goals and challenges.
Since enrolling in the classes last spring, Tom and Sue have not used any of their credit cards. In addition, they are up-to-date on all of their bills. They are now excited to learn ways to improve their finances. Also, the classes have given them confidence as they journey towards self-sufficiency.
For some, it’s not credit cards but high-interest predatory loans used for a quick financial fix that can lead to lasting debt. Catholic Charities refinances these loans through its Kansas Loan Pool Project (KLPP) which includes financial classes and the development of a durable plan and budget.
While understanding finances is not easy, it can be especially challenging for refugees as they resettle in a new country. Individual Development Accounts (IDA) is a savings program that Catholic Charities offers for refugees who have been in the U.S. for five years or less. Funded by a public grant, it helps them set up a savings account and matches their earnings, up to $4,000 for families or $2,000 for individuals. The money can be used for school tuition, house or car payments or start-up funds for businesses.
All of Catholic Charities’ financial programs share a single goal. Says Reyes, “We want people to understand how to budget and save so that they can achieve long-term financial independence.”