How United Way invests in the St. Louis region’s financial stability

Rose’s* journey toward financial empowerment started when her family was at a crossroads.

Their landlord asked her family to move so that the landlord could move back into the house. Rose had a steady job cleaning houses, but she had no idea how to find or afford another rental suitable for their family of seven.

“I was thinking, ‘where will we go now?'” She recalled. “It wasn’t fair for my kids. They were thinking the worst, that we were going to end up on the streets.”

Nearly 12% of people across the St. Louis region live in poverty. For them, a situation like this could set off a financial crisis. And now, economic challenges brought on by COVID-19 have put additional strains on many of our neighbors.

For Rose, a United Way supported financial stability program gave her the help she needed to keep her family from becoming homeless – and build toward a brighter financial future.

By supporting local nonprofits and programs that help people like Rose establish financial security, United Way is promoting financial stability for the entire St. Louis region.  

Investing in the future

Financial stability isn’t just about affording the basics – it also means making proactive investments for the future.

“Making a down payment on a car could make it possible for someone to keep a job or take a job with a higher wage that is farther away, and having savings can help smooth financial bumps throughout the year for increased stability,” said Debbie Irwin, community economic development director at United Way of Greater St. Louis. “Personal finance education and savings have the power to improve people’s lives and lift them out of poverty.”

However, in normal economic times, more than 42% of local households don’t make enough to afford their basic needs, so this may not be possible.

United Way supports IDA (Individual Development Account) and ASSET programs at local nonprofits to empower participants to make investments that change lives. Participants work toward savings goals and receive savings matches through the nonprofit and United Way. The money can be used to pay down debt, start a savings account or invest in things like education.

Rose joined LifeWise STL’s IDA program, and her savings and match made it possible for her to afford a down payment on a home for her family. They now have the opportunity to build their credit and equity, plus the dignity and stability of a safe place to live. And it couldn’t have come at a better time.

“It was a blessing because as soon as we had the home, there was the pandemic a month after,” Rose said. “My favorite part about it is to see my kids happy. They feel we are safe now.”

Strengthening financial safety nets

Tax credits like the Earned Income Tax Credit (EITC) can be the largest amount of money some working families receive at once all year. However, as many as 20% of those who qualify don’t claim it because they don’t know about it.

With support from local partners, United Way offers free tax preparation services to help local low- and middle-income individuals and families take advantage of all the credits and refunds they qualify for. Last year, the partnership filed more than 16,000 tax returns in the St. Louis region, helping participants receive over $18 million in tax refunds.

“Free tax preparation services and access to the EITC helps working families boost income, allowing them to save for emergencies, pay down debt and catch up on bills, which is especially vital this year,” Irwin said. “Research also shows long-term benefits, such as improved education and health outcomes for children and families, which can change lives for the better.”

Promoting financial education

For individuals and families working to improve their financial situations, knowledge is power.

That’s why United Way partners with the St. Louis Regional Financial Empowerment Coalition and area libraries, community organizations and financial institutions to host Money Smart Month each April. Money Smart Month offers free classes to help individuals and families learn about money management, goal setting, saving for retirement or college, building credit, reducing debt and more.

United Way also supports nonprofits and programs that provide financial education to help people gain long-term stability. As part of LifeWise STL’s IDA program, Rose learned to budget and found ways to save, like cutting the family’s rarely used landline.

“I really appreciate the IDA program, not only because of the grant but also because of the education they give us. I didn’t think I had extra expenses, but with [my coach] I saw so many things,” she said. “I started saving money, a little here and there, and I was working, too.”

At Epworth Children and Family Services, this training prepares young people in and aging out of foster care to build a successful future.

“Being a foster child, you don’t get taught the basic things by a parent. The program fills in that gap, so essentially it doesn’t throw me out into the world unprepared,” said Maurice LaFon, a sophomore at Harris Stowe State University.

After completing Epworth’s IDA program, he was able to purchase a car of his own, which enables him to go to school, work to save for the future and play baseball for Harris Stowe. Thanks to the financial education classes, he also opened a credit card and has been working on building his credit.

“Financial literacy is extremely important for our youth to learn all the skills required to budget, save, build credit and why that’s all important,” said Deanna Allsman, Epworth’s assistant director of older youth services. “It’s removing the barriers these youth face so they can have a jump start toward financial stability, and it opens their eyes to something new that they thought they weren’t capable of accomplishing.”

*Name changed for privacy

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James Taylor
James Taylor