The nonprofit Samaritan House has launched an initiative to help low-income San Mateo County residents become more financially healthy and less dependent upon social safety net services.
The financial empowerment program offers free tax preparation, budgeting classes, one-on-one financial coaching and matching funds to help clients build up emergency savings accounts.
Financial empowerment manager Saul Gonzalez said the program was created after Sandra Chaplin, Samaritan House director of homelessness prevention, noticed many clients didn’t have the tools to stay out of crisis after initially receiving help.
“She started to see a need with our clients,” Gonzalez said. “They kept coming back asking for more resources.”
The free tax preparation services are available through April 4 to households earning less than $52,000 per year, and can include up to three years’ worth of unfiled back taxes. Gonzalez said in many cases, clients are owed money. The program’s volunteer tax preparers have already processed 70 tax returns for this tax season, helping clients claim $50,058 in earned income tax credits, $17,225 in dependent child credits and $152,693 in federal tax refunds, he noted.
Some of the program’s clients are working under the table or are undocumented immigrants, but they want to participate in the tax system, Gonzalez said, adding that many social service agencies won’t give assistance to people who are unable to provide tax forms as proof of income.
Another component of the program is the Start2Save plan, which rewards participants for building up emergency funds in savings accounts by matching every dollar they deposit with two dollars in grant funds. To qualify, clients must attend 10 hours of financial education classes and save a minimum of $20 per month. Clients can receive a maximum of $1,000 in matching funds by depositing $500 of their own money.
The financial education classes are held in East Palo Alto once a week, for five weeks, and focus on helping clients improve their credit, establish bank accounts and enhance financial health.
Once clients complete the class, they’re offered one-on-one financial coaching.
“This is where they start to let loose and begin to really reveal personal stuff,” Gonzalez said. However, he noted that because many clients have a sense of shame about their money problems, getting them to open up can sometimes be “like a dance.”
Clients often see positive outcomes after just a few coaching sessions, Gonzalez said. One example he cited was a client who was a victim of identity theft and had $20,000 worth of debt affecting her credit score. The woman filed a police report about her stolen identity and took action to get the fraudulent debt removed from her credit report. After just three coaching sessions, she went from a sense of hopelessness to feeling like she was back in control of her life, Gonzalez said.
Another client is Jorge Flores, owner of Don Polvoron Bakery in Hayward, who had co-signed a home loan for his brother, who defaulted on the loan. Flores said this damaged his credit and made it difficult for him to obtain a loan, but through the financial education classes he was able to repair his credit and receive bank loans again.
He said Gonzalez helped him discern good loan terms from bad ones.
“Saul guided me and showed me how to look at the life of the loan,” Flores said. And since Flores is now able to grow his business, he says he anticipates hiring additional employees soon.
For more information on Samaritan House’s programs, visit samaritanhousesanmateo.org or call (650) 341-4081.Bay Area Newsfinancial empowerment manager Saul GonzalezPeninsulaSamaritan HouseSan Mateo County