CCS Coordinates New 'Individual Development Account' Program
July 28, 2016 at 4:25 p.m.
The first Individual Development Accounts have been opened by folks in Kosciusko County.
When a savings goal is reached, the state will match the deposited amount $3 for every $1 saved, up to $900 per year.
"It's a great way for lower income families to invest in their future. The savings actually add up," said Laura Deal of Combined Community Services, who is coordinating the program.
"It means a home for themselves and their kids, money for their education or their kids' education. The money is put toward things that will really pay off."
IDA, established in 1997, is designed to help certain individuals, those earning 175 percent of the federal poverty level or less, accumulate savings and develop personal finance skills.
The money is deposited at Lake City Bank and the accounts are administered by CCS. So far, four accounts have been opened. Deal said up to 10 accounts are eligible for the IDA program.
Participants are expected to save a minimum of $300 per year and attend a consumer training course provided free of charge by Consumer Credit Counseling.
The money saved must go toward education (tuition, lab costs, books, computer costs and other costs) at an accredited college or vocational school or a training program for the accountholder or dependent; purchase of a primary residence or to reduce the principal amount owed on a residence; or toward the purchase, start-up or expansion of an existing business.
Each IDA receives matching monies in April, Deal said, which means $50 per month right now. CCS entered the program in the middle of the year.
"It is a sacrifice to save this amount of money," Deal said of the single mothers who have opened the accounts. "Fifty dollars per months is very difficult for them to put aside."
The payoff will be an investment in the future, a home, a career.
"It will be very exciting to see the first person purchase a home. This means they can put themselves or their children through college," she said.
Locally, housing is the main goal as there are many financial aid programs for higher education.
Under the strict guidelines, early withdrawals from the accounts are allowed for emergency situations - a car repair, for example - and the money has to be replaced within a certain amount of time. Deal and a bank representative must approve any emergency withdrawal.
"Funds cannot be withdrawn without permission," Deal said. "The program is pretty strict. When the financial goal is reached, a check is written to the mortgage company or school.
"The IDAs are a good lesson in saving money, in resisting initial temptations and having a home in the end. It's a great program."
Eligible individuals have an annual income equal to or less than 175 percent of the federal income poverty level. For one-person families, 175 percent of the poverty level is $15,505 per year; two people, $20,895; three, $26,285; four, $31,675; five, $37,065; six, $42,455; seven, $47,845; eight, $53,235; add $3,080 for each family member for more than eight.
Additional accounts can be established if enough private donations are provided in matching funds. Contributors making gifts between $100 and $50,000 during a taxable year receive a 50 percent tax credit.
For more information, call CCS at 269-6019, Ext. 30. The organization is at 110 E. Prairie St., Warsaw. [[In-content Ad]]
The first Individual Development Accounts have been opened by folks in Kosciusko County.
When a savings goal is reached, the state will match the deposited amount $3 for every $1 saved, up to $900 per year.
"It's a great way for lower income families to invest in their future. The savings actually add up," said Laura Deal of Combined Community Services, who is coordinating the program.
"It means a home for themselves and their kids, money for their education or their kids' education. The money is put toward things that will really pay off."
IDA, established in 1997, is designed to help certain individuals, those earning 175 percent of the federal poverty level or less, accumulate savings and develop personal finance skills.
The money is deposited at Lake City Bank and the accounts are administered by CCS. So far, four accounts have been opened. Deal said up to 10 accounts are eligible for the IDA program.
Participants are expected to save a minimum of $300 per year and attend a consumer training course provided free of charge by Consumer Credit Counseling.
The money saved must go toward education (tuition, lab costs, books, computer costs and other costs) at an accredited college or vocational school or a training program for the accountholder or dependent; purchase of a primary residence or to reduce the principal amount owed on a residence; or toward the purchase, start-up or expansion of an existing business.
Each IDA receives matching monies in April, Deal said, which means $50 per month right now. CCS entered the program in the middle of the year.
"It is a sacrifice to save this amount of money," Deal said of the single mothers who have opened the accounts. "Fifty dollars per months is very difficult for them to put aside."
The payoff will be an investment in the future, a home, a career.
"It will be very exciting to see the first person purchase a home. This means they can put themselves or their children through college," she said.
Locally, housing is the main goal as there are many financial aid programs for higher education.
Under the strict guidelines, early withdrawals from the accounts are allowed for emergency situations - a car repair, for example - and the money has to be replaced within a certain amount of time. Deal and a bank representative must approve any emergency withdrawal.
"Funds cannot be withdrawn without permission," Deal said. "The program is pretty strict. When the financial goal is reached, a check is written to the mortgage company or school.
"The IDAs are a good lesson in saving money, in resisting initial temptations and having a home in the end. It's a great program."
Eligible individuals have an annual income equal to or less than 175 percent of the federal income poverty level. For one-person families, 175 percent of the poverty level is $15,505 per year; two people, $20,895; three, $26,285; four, $31,675; five, $37,065; six, $42,455; seven, $47,845; eight, $53,235; add $3,080 for each family member for more than eight.
Additional accounts can be established if enough private donations are provided in matching funds. Contributors making gifts between $100 and $50,000 during a taxable year receive a 50 percent tax credit.
For more information, call CCS at 269-6019, Ext. 30. The organization is at 110 E. Prairie St., Warsaw. [[In-content Ad]]