They say habits, either good or bad, can be formed in as little time as 30 days. At Middlesex United Way, we are excited to unveil our new partnership that helps lower-income families develop new savings habits that can last a lifetime.
Middlesex United Way, along with other Connecticut United Ways across the state, are partnering with EARN, a San Francisco- based nonprofit organization. The purpose of the new partnership is to continue in our fight to helping the ALICE (Asset Limited, Income Constrained, Employed) population by bringing an easy to use, matched savings program.
In 2014, Connecticut United Ways and Rutgers University found that despite their efforts, 25 percent of Connecticut households who earn above the federal poverty line still live under a basic cost-of-living threshold defined in the report. We define these households as ALICE, – Asset Limited, Income Constrained, Employed. ALICE households, combined with those in poverty, comprise 38 percent of Connecticut households, revealing that more than 1 in 3 Connecticut households can’t afford the basics of housing, food, healthcare, childcare, and transportation.
To be defined as ALICE, you must be asset limited. Thirty-nine percent of Connecticut households lack the liquid assets necessary to survive a financial emergency. This means that an unexpected hospital trip or car repairs can have the potential to devastate an ALICE household. Sadly, it is often these unexpected expenses that lead to further financial hardships for these families.
One way for ALICE families to build liquid assists is to begin to create a savings habit. Savings is a core component of financial health, and can help bring stability to struggling households. By developing savings habits, families can save for short-term emergencies and long-term assets, like a home or college education.
EARN is a national nonprofit dedicated to just that- helping people build their savings. For six months, individuals earning no more than 80 percent of the median household income in their region sign-up to save at least $20 per month, and earn $10 in matched savings. At the end of the program, they will have built up at least $180 worth of emergency savings/
EARN’s mission is to help individuals and families reach greater prosperity by building lifelong savings habits and increasing financial capability. EARN reports that 80% of graduates from the Starter Savings Program continue to save beyond the six months of the program because they now have the confidence and the know-how.
To get started, savers can enroll in the program online, or even through their mobile phones. They then link their savings account to EARN’s platform, set personal savings goals, make deposits, and earn rewards. Currently, EARN is linked to accounts at 15 financial institutions, including Ally Financial, BB&T, BoA, BBVA, Capital One 360, Chase, Citibank, Navy Federal CU, PNC, Simple, Suntrust Bank, TD Bank, US Bank, USAA, and Wells Fargo. Additional banks are in the process of being added to the EARN program, including banks located in Connecticut.
Middlesex United Way has invested in financial stability efforts that help families in numerous ways, including free tax preparation, job training, and employment support. Our new partnership with the EARN program will complement our financial stability work, and allow us to continue our commitment to uncovering solutions for ALICE households.
To learn more or to sign-up, please visit https://www.earn.org/ctuw.
Kevin Wilhelm is the executive director of Middlesex United Way.