Guest Post: Savings at Tax Time
America Saves Week is February 19-26, 2012. To find out more, visit americasavesweek.org.
As we all know, tax time is a great time for our clients to put part of the disposable tax refund into savings for an emergency safety net to be available throughout the year if needed. Unfortunately, many of our clients are unaware of the great opportunities to start saving and use a savings vehicle that will draw interest while sitting in an account for emergencies.
Some of the alarming statistics include:
- 27% of American households are asset poor (households that are not able to live at the poverty level for three months in the absence of income)*
- 43% of American households are liquid asset poor (excludes assets such as a home, business, etc. that can’t be quickly converted to cash)*
- An estimated 9 million households (with 17 million adults) are unbanked**
- In addition to unbanked households, an estimated 21 million households are underbanked**
You can see it’s vitally important that we encourage our clients to invest their tax refund wisely – their tax refund is many times the only chance our clients have to make a significant investment in their savings!
Programs across the country are participating in the Bonds Make it Easy Savings Bonds Campaign, offering their clients the opportunity to purchase savings bonds with all or part of their refund. Savings Bonds which can be purchased through tax preparation on any tax software or opening other types of accounts through Credit Unions or retirement savings plans such as IRAs. There are, of course, many savings vehicles that clients can use to start or enhance their savings.
As we celebrate America Saves Week, make sure your organization has a plan to help your clients move toward self-sufficiency and allow them to meet unexpected life events head on. Saving takes time, effort and a solid plan to get started. To find out how your organization can get involved, visit www.bondsmakeiteasy.org
By Pam Smith, Asset Building Forum Co-Chair and VITA Program Manager for 11 yrs. in Tulsa Oklahoma
* “Assets and Opportunity Scorecard: A Portrait of Financial Insecurity and Policies to Rebuild Prosperity in America.” Corporation for Enterprise Development 2012.
** FDIC National Survey of Unbanked and Underbanked Households. December 2009.