Bank and Nonprofit Partner to Create More Savings Accounts

For many people who struggle with debt, having an emergency savings account is often overlooked.  But having such savings can be the most important key to financial stability.

That's something the staff at Catonsville-based sees often with its clients.

The non-profit financial literacy organization works with clients to pay off debt, usually with a monthly payment that rolls their debt into one lump-sum amount. After that debt is paid off, many of these clients have money available every month that could go toward a monthly savings account, according to a press release.

“Research shows that most low and moderate income families have little or no savings; but there is growing evidence that pre-authorized deposits to savings greatly increase the accumulation of these critically important dollars," Jim Godfrey, president and CEO of the credit counseling organization, said in a release.

Out of the 20,000 new clients the organization served in 2010, less than 7 percent reported any savings and of those 7 percent, less than half reported a savings account with a balance lower than $500. Financial experts recommend having between three to six months of living expenses in savings.

The non-profit credit counseling service is partnering with for the first time to start a one-year emergency savings initiative. The goal is to recruit 100 low- to moderate-income families from Baltimore city and Baltimore County for the program, said Michelle Nusum, director of program development for the credit counseling service.

The company received a $10,000 grant from PNC Foundation to support the launch of the program in April as part of National Financial Literacy Awareness Month.

Through the program clients can have money automatically transferred to a PNC savings account, the same way that money for their debt was transferred directly to creditors. Through this program however, waives fees and minimum balances associated with savings accounts.

Participants will also receive financial literacy and education through the program, Nusum said. The grant will pay for a person to work with the clients.

To sign up, call 1-800-642-2227 or email info@cccs-inc.org.