Californians urged to save; become financially literate

Californians urged to save; become financially literate
Allison Bruce
Ventura County Star
04/01/09

If you haven’t started to squirrel away some money each month into savings, now might be a good time to start.

For a little added push, this is California Saves Week, when people are being asked to open a savings account or commit to depositing $20 a month in existing accounts.

Some may think it’s too late to start saving now that the country is in the middle of a recession. Others may be living paycheck to paycheck. But even small amounts over time can add up and make a big difference when there’s a job loss or the family car dies.

Once they get a handle on their budgets, most people find there are places to cut back so they can put away a small amount each month, said Joy Thormodsgard, CEO of Consumer Credit Counseling Service, serving counties from Ventura to Santa Clara.

“It’s not so much the amount as it is starting to plan for the future,” she said, “and for the crises.”

Thormodsgard said everyone can benefit from having an emergency savings account for when a crisis hits, and parents should encourage their children to open their own savings accounts, starting the saving habit young.

The California Saves campaign is part of the national America Saves effort.

The local campaign was started by the Financial Literacy Council, a new collaboration coordinated by Consumer Credit Counseling Service.

The council brings together local nonprofit, education, financial institution, corporate and government partners.

The idea is to educate people about savings, investments and money management, with the goal to move people toward wealth and away from debt.

The intention is to not duplicate services offered, but make people aware of those services and create new financial education opportunities, Thormodsgard said.

One council participant is California Lutheran University, where the California Institute of Finance is involved in teaching, research and professional development of personal finance, as well as faculty and student outreach efforts to help the community, said Somnath Basu, institute director.

“As the collective financial health of our community falters, we understand our need to step in and bring relief to all, and especially those who need it most,” Basu wrote in an e-mail.

Strengthening those who are very low income strengthens the entire community’s financial health, Basu said.

The council already has held a couple days of free tax assistance. Upcoming free workshops include homebuyer education and another on foreclosure prevention. Programs are available in English and Spanish.

A future goal is to hold a summit where consumers could participate in a variety of workshops.

Thormodsgard said it is important to give people financial literacy before giving them multiple options to build debt.

“The economy is, I believe, partially dependent on a financially literate consumer,” she said. “The better decisions the consumer makes based on building wealth and not debt, the healthier our economy can become.”