This July, five new savers joined CEF’s Renter’s Savings IDA program to begin Phase II of our Renter’s Savings IDA Pilot. The Savings Team here at CEF would like to welcome the newest members of the program and thank these five new savers for making a new commitment to saving and dreaming together with CEF.

The Renter’s Savings IDA program was originally piloted in 2012, specifically with renters in mind. Through CEF’s Safe Savings Accounts, the CEF Savings Team noticed that members who moved into housing often find it very challenging to continue saving when faced with so many new expenses. With utility bills and rent taking up such a large portion of income, it can be difficult for renters to put anything aside. Even after saving, unexpected emergencies would make it hard to hold on to that money. The Renter’s Savings IDA is meant to serve as an “Emergency Fund”—money set aside for financial security and peace of mind.

The new program was piloted with ten members currently in housing and ready to save for the long-term. While similar in set-up to our current Safe Savings Accounts, this program lasts at least 2.5 years and can be matched at 50% (up to $1,000 in matching funds). Additionally, savers may draw on the 50% match when the emergency occurs. This way, one emergency won’t wipe out all their hard-earned savings.

Over the past two years, advocates and savers participating in the program have learned a lot from the program that they have shared with the Savings Team so that we could adapt and improve the program for the next group of savers.

Here are some of our lessons learned from Phase I of the Renter’s Savings IDA Pilot and tweaks we’re making in Phase II of the pilot:

• Auto-Save: In the first pilot phase, we’ve seen that participants using the “Auto-Save” feature were able to save much more than their counterparts who made deposits via online transfers or by cash. Auto-Save automatically deducts savings deposits from a personal bank account on payday–making saving cheaper, easier, and quicker! Our newest Phase II participants are all signed up for Auto-Save with CEF and have already started working towards their long-term goals.

• One-on-One Financial Coaching: In the first pilot phase, we attempted to meet together as one large group to do an “Opportunity Class 2.0.” We soon found that with varying schedules and interests, meeting at least once a month in one-on-one meetings would be a much more effective way for Renter’s Savings IDA participants and their advocates to learn about relevant topics. Advocates and members participating in this program are learning and working on a variety of topics relevant to their long-term goals, including:
  • Building Credit
  • Preparing for Homeownership
  • Preparing for Car Ownership
  • Budgeting
  • Entertainment & Avoiding Scams
  • Retirement 101
  • Going Back to School & Making Sense of Financial Aid
  • …and more!

• The Value of Multiple Accounts: In Phase I, several of our savers opened up their Renter’s Savings IDAs but maintained their Safe Savings Accounts as well. Having two accounts at CEF, in addition to a personal bank account, helped the savers to budget and use each account for different purposes.  Donna, for example, told us the following about how she uses her two accounts at CEF:
  

  “I have things coming up like my renter’s insurance; it’s $130 right off the bat, and I don’t have that just out of a check. So Safe Savings is for that — I save for stuff that I need and take it out when it’s time. The Renter’s Savings account, I don’t take that out for anything. That is going to be for when my car breaks down or I need another vehicle. And I am just not allowed to touch that. It really makes me feel better, knowing that’s there.”

In Phase II of the pilot, we’ll be encouraging members that already have a Safe Savings account to consider using both of their accounts, instead of just the Renter’s Savings IDA.

• Long-term Goals: When we began the first phase of the pilot, the Savings Team had been primarily thinking of the accounts as emergency funds that may complement other goals like homeownership, but pretty strictly emergency-focused. With the first pilot phase, we’ve seen that the first ten participants didn’t necessarily think of their accounts this way. Santiago bought a dairy cow for his family when he met his goal. Here’s what some of the other Phase I participants said about “Why We’re Saving”:

• Purchase a home, build up savings, save in 401K, start building college savings for my four children, and getting healthy!”
• “My own transportation and starting a business”
• “Finishing school and paying off student loans”
• “Build my income. My goal is to help others become stronger in their faith, to not give, and stay motivated.”
• “I’m just taking it one day at a time. I am trained not to try to think that far ahead.”
• “Getting my GED and saving for a car”
• “Be in school and nearer to graduation”

Saving towards emergencies is still the purpose of the account, but the way that we frame the accounts is important. At CEF, advocates and members aren’t just working towards financial security, but overall well-being for our community. That means following dreams and building community, not just budgeting and saving our last pennies. We have to know what we’re working towards together, and focusing on our long-term goals helps us to do that!

The next round of applications for the Renter’s Savings IDA Pilot will be available in November. Any questions about the accounts can be directed to Ariana Vaisey at savings@communityempowermentfund.org or by calling CEF in Chapel Hill at 919-200-0233. All CEF members in Durham and Orange Counties who have completed the opportunity class, are a signer on a lease, and are interested in a higher-commitment savings account with CEF are encouraged to apply, although only a few slots are available during this pilot phase.

From the CEF Savings Team and Renter’s Savings IDA participants, we’d like to extend a warm welcome to the newest 5 participants of the program! We look forward to learning and growing with you over the next two and half years.

The Renter’s Savings IDA program is completely supported by individuals like you. Sponsor a Saver and help us get there together! You can contribute to long-term change – Join with our pilot Savers as they continue to invest in their own and their family’s futures.