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Financial counselor helps low-income move out of poverty

By Cindy Atoji Keene

There's a truism that says, “It’s expensive to be poor,” said Sandra Suarez, who helps low-income families move out of poverty. As part of her role as a financial counselor at Compass Working Capital, a Boston-based non-profit, she helps break the generational cycle of poverty by helping build savings, repair credit, and achieve financial goals. Suarez, who grew up on welfare, said that the disenfranchised are more susceptible to unfair or deceptive practices such as check cashing services, payday loans and other lending methods that prey on poor people.

Q: You grew up on welfare – how did you manage to move out of poverty?
A: The only thing I knew about money while growing up was that my family didn’t have enough of it. My mom was a single parent who lived off small welfare checks in subsidized housing. I wanted a better future, so I became the first person in my family to attend college. But I was still struggling financially, so I took a financial coaching program through Compass Working Capital. I found out how to save money, improve my credit score, increase my wages and even was able to eventually buy a house. Having been in my clients’ shoes, I am in a unique role that allows me to understand the challenges low-income families face and how to help them navigate their way out of poverty.

Q: Why do people fall into trouble with their own financial mismanagement?
A: It’s usually because of lack of know-how and lacking the right financial skills.
Finances are taught at home, and for low-income families, this isn’t a priority. It becomes a vicious cycle – people are just thinking about getting by month-to-month. It becomes a matter of “Do I pay the gas or groceries this week?” They’re not thinking about “What’s the interest on my credit card?” or “Should I be saving at a different bank?” These bad habits and lack of knowledge is passed on.

Q: Do people on public benefits have a lot of misconceptions?
A: Some recipients of food stamps or housing vouchers think they can’t have any savings. So they literally put money under the mattress; in a jar or coat pocket; ask another family member to hold it, or send it to their country. But eligibility for the housing voucher, for example, might only take into consideration the interest earned during the year, and not the amount of actual savings. I also show people how little interest is actually earned while savings can build, and also how it might be worth paying some income-based rent because of the value of having the housing itself.

Q: Is it true that when people think about their financial goals, they’re too often only thinking about buying a car or home or other big goals?
A: Yes, people have big dreams or aspirations such as “making a lot of money” but they don’t know how to achieve these goals. I tell them to think “SMART”: Specific, Measurable, Actionable, Realistic and Target Date. For example, if a goal is to start saving money towards homeownership, a small, actionable and measurable step is to open a savings account and have $25 dollars or some other amount automatically withdrawn from your paycheck.

Q: What about that saying, “It’s expensive to be poor”?
A: Low-income people might be using check-cashing services, where a high percentage taken out to cash each check. Or perhaps they’re renting-to-own, which ends up costing three to five times more than an item is worth because of interest and charges. Or they might be late paying their credit card bill – and interest hikes up if you’re even just late one time in payment. Finally, someone might be struggling to get by, but still have internet, cable, and a cell phone – and still eating out. I show them how all these expenses add up.

Q: Do you encourage the use of lending circles?
A: No, because after contributing your set amount to everyone else in the “circle,” often by the time it’s your turn to get the money, the other lenders often disappeared or defaulted. Many of our clients are Latino, and lending circles were a common practice between Dominican Latinos, but it’s of course it’s better for money to be banked with a reputable lender.

Q: Almost everyone has a financial indulgence – what’s yours?
A: A weekend trip to an amusement park for my kids, age 13 and 8. Our last trip was to Canobie Lake Park and they loved it.

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