Program Should Give Boost To Savings Initiatives

Program Should Give Boost To Savings Initiatives

July 23, 2001
Indianapolis Star
by Chris O'Malley

Indianapolis financial leaders hope to make savings education a front-burner issue.

In January, a coalition of community groups and businesses plans to launch Indianapolis Saves, to help residents of all income levels build wealth.

Although details are being hammered out, the program likely will mirror an effort started in Cleveland early this year that includes free seminars and consultations with financial planners. The program helps people save for homes, education, retirement and other needs. In Cleveland, a number of banks offer no-fee savings accounts and no-fee IRAs, and mutual fund accounts that can be opened for as little as $50.

"Everybody does their own. There's a little bit of competition'' among banks, said Jeff Buck, coordinator of Indianapolis Saves and a vice president at Capital Strategies Inc., an investment management consulting firm Downtown.

Organizers of the Indianapolis program expect competition among local financial institutions offering their own saver-friendly accounts, noting their value in starting a relationship with customers who later might need car loans or mortgages.

Financial institutions also are required to reach out to low- and moderate-income customers as part of the federal Community Reinvestment Act.

Indianapolis Saves, which plans a heavy marketing campaign, may become a sort of clearinghouse for existing but often little-known financial programs in the city. These include Money 2000, a saving program offered by Purdue University's Marion County Extension Service.

About 60 people have enrolled in the little-known program since 1999, saving about $17,000 and reducing debt by almost $24,000, according to Purdue.

Another program that might get folded into Indianapolis Saves is the Indiana chapter of the Washington, D.C.-based Jumpstart Coalition for Financial Literacy, which is aimed at school-age children.

Schools in the state have not been receptive to such curriculum, in part because they're absorbed in implementing new state academic standards for core subjects. "There has been a lot of work done to get economics included under social studies but, as you know, economics is not necessarily personal finance," said David Bixler, coordinator for Jumpstart in Indiana.

Children tend to turn to parents as their prime source for personal finance matters, but "parents on average have not had any education, any training, any background in personal finance," Bixler said.

His firm, Capital Strategies, works with employees of companies on such issues as retirement savings. "This stuff isn't taught anywhere. We hear that all the time from employees."

Indianapolis Saves likely will serve as a contact point for such savings-based initiatives as the state's Individual Development Account program.

Funded by the state and administered through community development organizations around the city, IDA matches $3 for every $1 deposited by low- and moderate-income savers.

The money must be spent for uses such as home ownership, small business development, post-secondary education and job training.

"People believe that they just can't save. We're showing people that, yes, you can save and what you save can accumulate rather quickly,'' said Leigh Tivol, program director of the Near-Eastside IDA program at Eastside Community Investments.

Contact Chris O'Malley at 1-317-444-6081 or via e-mail at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .