ó April Bradley never imagined sheíd be where she is
today: picking out paint colors and furniture for a
Baltimore rowhouse with her name on the property title.
years ago, Bradley was a 27-year-old single mother more
concerned about paying the monthly bills and making rent
than whether sheíd ever own a home, send her son to
college or retire.
changed when she turned to Baltimore CASH Campaign, a
financial services nonprofit that Bradley had heard was
doing taxes for free. The organizationís volunteers
convinced Bradley to use part of her tax refund to buy
savings bonds, and she made it a habit.
education advocates see tax season as an opportunity to
help nonsavers start new saving habits. More than 70
percent of people who file taxes are expected to get
money back. Last year, the average refund was $3,120,
but low-income workers who qualify for the Earned Income
Tax Credit could receive twice as much. Many people
stand to receive a cash windfall, and advocates are
encouraging them to invest or save part of their refund.
say such efforts are especially important in cities like
Baltimore, where about a quarter of residents donít
have bank accounts or lack access to full financial
services, and instead rely on cash checking services,
payday loans and pawnshops.
people have this windfall of money, they view it as
found money," said Sara Johnson, the director of
the Baltimore CASH Campaign. "Giving them options
for what to do with it and encouraging them to save some
of it is really important."
years ago, Bradley was just like millions of Americans
who donít save, either because they think their
monthly budget is too tight or they are new to the
workforce and not sure how to get started. Some canít
open accounts at traditional financial institutions
because of past offenses such as writing bad checks.
parlayed her savings habit into her now home, a
three-bedroom, two-bathroom center unit. She cashed in
her savings bonds in December and bought it outright.
far from her dream home ó the water tank broke within
two weeks of moving in ó but itís proof that she has
control over her future.
was still so happy, even without hot water, knowing this
house is mine," Bradley said. "No one can come
and take it from me."
CASH Campaign heads into tax season like an army heading
into battle, deploying more than 240 volunteer tax
preparers and financial planners to makeshift tax
preparation offices in 15 churches, schools and
community centers around the Baltimore area. Last year,
they spent about 3,700 hours helping families with
household incomes of less than $54,000 file their taxes
for free, and expect to put in about as much time before
the sun sets on the 2017 tax season. The 2017 deadline
for federal taxes is April 18.
STORY CAN END HERE)
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come armed with an arsenal of financial products people
can use to save a portion of their tax refund, such as
savings bonds, pre-paid debit cards and an offer to open
a savings account with MECU, the Municipal Employee
month, America Saves, a financial literacy initiative of
the Consumer Federation of America, and NACHA, an
electronic payment trade association, launched a
"Split to Save" campaign, encouraging workers
to split their paychecks between checking and savings
accounts. A second America Saves campaign,
SaveYourRefund, encourages taxpayers to use Form 8888 to
split their refund.
families with income below $53,505 can qualify for the
Earned Income Tax Credit. The amount of the credit
depends on family size and income, but can be worth up
many families, a check that size is "the biggest
influx of money theyíll receive in a year," said
Lindsay Ferguson, the outreach manager for America
U.S. Treasury Department is partnering with tax
preparation software providers TaxAct, TaxSlayer and
TurboTax to direct people to the website for myRA, the
agencyís retirement savings account that does not have
a minimum deposit requirement.
many hard-working Americans, the hardest part about
saving is simply taking that first step," said Rob
Gettemy, chief operating officer at TaxAct, in a
statement announcing the partnership. "Helping them
use that money for a better financial future, with no
risk, is an incredible opportunity."
advisers target tax season as an opportunity to talk
about savings because they know itís a time of year
when people may have a little more cash to work with.
But their goal is to educate people about how to make
saving a routine.
a lot of the families weíre serving, itís a cash
flow problem. Theyíre deeply in debt and I think
feeling like they canít afford to save anything,"
the CASH Campaignís Johnson said. "Trying to help
people understand that even if itís a little bit, a
small amount ó $5 here, $10 there ó itís going to
make a difference in the long run."
survey released in February by Bankrate, a consumer
financial services firm, found that most Americans are
not making progress in boosting their emergency funds,
even though they increasingly are aware of the
importance of saving.
half of respondents said their savings were greater than
their credit card debt, but 24 percent said their credit
card debt outweighed their savings, according to the
report, which surveyed 1,000 adults in early February.
Another 17 percent said they didnít have any debt ó
or any savings.
been looking at this for seven years and the numbers
have not improved, even as the economy has improved, as
the labor market has improved, as income has
improved," said Greg McBride, chief financial
analyst at Bankrate.
trend shows that people need help acting on the desire
to save, McBride said. He echoed other expertsí
sentiment that tax season, when people already are
thinking about finance and have an influx of cash, is a
good time to clean up their financial situation.
depositing some money from each paycheck in a savings
account is another good way to save.
you wait until the end of the month and try to save whatís
left over ó well, thereís not going to be anything
left over," McBride said.
down credit card debt is also an important step toward
more stable financial footing, and another good use of a
tax refund check, experts said.
card debt typically has a high interest rate and can
damage peopleís credit rating, which affects whether
they can qualify for a mortgage or other loan, and helps
determine what interest rate they pay, said Judith Ward,
senior financial planner for T. Rowe Price Investment
tempting to just go blow that tax refund on that shiny
new thing you want ó thatís what everyone wants to
do," Ward said. "But there may be some things
that arenít as exciting, but can set you up for a
better financial future."