One of the ways Community Action House works to eradicate poverty is through financial education.
The organization recently shared how Tabitha Wolters, one of the Dutch organization’s financial wellness specialists, worked with a client who had little hope for her financial future.
The client lived with her family because she had lost her apartment. Her credit score was 523, she had thousands of dollars in collections and loans she couldn’t pay.
In several sessions, Tabitha and the client worked through the necessary steps to achieve the client’s financial goals. In the past two years, the woman has been able to find an apartment, pay off numerous debts and build up a sustainable budget. By May of this year, her credit score had risen to 629. That meant she could finally own her own home.
The Lakeshore asked Wolters to speak about how the organization is helping clients in similar situations.
The lake shore: For more than 50 years, Community Action House has provided a range of services to families and individuals, helping to provide food, clothing, shelter and opportunities to build the skills to live stable and prosperous lives. What would you wish people knew about CAH services?
Tabitha Wolters: The Community Action House does a fantastic job of engaging and welcoming guests. We have a personal and welcoming space, we work with them to achieve their goals and we strive to treat everyone with dignity and respect.
TL: One area where CAH helps clients is in rebuilding their creditworthiness. How can you help people on limited incomes become financially stronger and improve their credit scores?
TW: Our personal financial advisory services assist our guests by creating a spending plan together and reviewing their credit history. Then we create an action plan with your short-term and long-term goals. Our Financial Wellbeing Associates provide support and accountability for these goals and provide financial advice to support them. A few concrete ways to build credit include making all payments on time and staying within 30% of your credit limit.
TL: Often people who are financially troubled have a lot of debt that seems impossible to pay off. How do you help your customers manage their debt?
TW: Debt can be very overwhelming and even traumatizing. To minimize this, we remind our guests that financial freedom is a marathon, not a sprint. We break down their short-term goals into achievable action steps that they can take over a month. The first step is to ensure that all bills are paid on time. The second step is to set up a small emergency savings account. The third step is to start paying off debt, paying smaller bills one at a time and using the “snowball” effect to pay off larger debts.
TL: How long have you been working with someone to transform their life financially and what are the benefits if they can complete your program?
TW: The time we spend with our guests varies according to needs. It only takes some of our guests a visit or two to realize that they are financially independent. Some of our guests have been working with us for over a year. The average guest probably works with us for four to twelve months. The goals to complete our program are to have a balanced budget and achieve their own financial goals, which are different for each person. Some financial goals might include improving credit, building a savings account, saving a home from foreclosure, or buying a home.
TL: What are some of your customers’ success stories?
TW: I had a client who was in debt to purchase advice with at least six credit cards. With my encouragement, she set goals for what to do once she received her tax return and potential stimulus check. Her goal was to pay off debt and build up savings. She was able to pay off all her credit cards and is now debt free. She told me, “I feel so great and grateful that I was pushed to help myself and for your help. I know I worked myself into this mess with everything I could get out of it. I’ve learned a lot about myself and I love the path I’m on right now.”
We had a participant in a homebuyer training class who didn’t know where to begin the homebuying process. They were very scared and overwhelmed. After the course, they gained confidence and realized they could fulfill their dream of buying a home. About six months later they bought their first house in Holland.
TL: How can people qualify for help from CAH to improve their credit score?
TW: We have no qualification or income guidelines for our financial wellness programs. All of our programs are free and available to anyone in our community who desires financial support.
tsp: How has the way you serve customers changed since the Food Club opened earlier this year?
TW: It is wonderful to have our financial wellness services in the same location as our food club as our team has been to a different service location in years past. We can greet our members when we see them shopping, and if shoppers have questions, we’re right there to answer them. Our customers can also shop for groceries and book a financial wellness appointment in the same time frame, which is an added convenience.