February 21, 2001
The Charlotte Observer
by Amber Veverka

Spurred on by new studies that show that the average American household has less than $10,000 in net financial assets - including retirement savings - the Consumer Federation of America has launched a program to help low- and moderate-income people save more money.

The Consumer Federation of America, with a $300,000 grant from the Charlotte-based Bank of America Foundation, has created America Saves, a campaign to get 100,000 low- to moderate-income Americans to regularly save money in a bank account or pay down debt and to connect them with free money-management counseling.

The Consumer Federation, a Washington-based nonprofit association of consumer groups, announced America Saves on Tuesday. It's modeling the program, which is free to participants, after its pilot in Cleveland. In April, it will launch its next campaign in Kansas City, Mo. Consumer Federation Executive Director Stephen Brobeck said he did not yet know which other cities will later launch programs, though he said the CFA is talking to several cities in the Southeast. It's not being offered in Charlotte now. Brobeck said two recent CFA studies, one detailing changes in Americans' financial assets between 1995 and 1998 and the other measuring people's desire to save money, support the need for the push to build savings.

"There is a relatively low level of savings by most Americans," Brobeck said. "The good news is there's a strong desire to save and build wealth."

One study, conducted for the Consumer Federation by an Ohio State University consumer professor, showed that the average household in 1998 (the most recent data available from the Federal Reserve) had a net worth of $71,700, mostly from home equity.

But that same household had only $9,850 in net financial assets, including retirement money. And households with income under $25,000 had net financial assets of just $1,000.

But even people who don't earn a lot of money still want to save, another CFA study shows. Half of Americans earning less than $20,000 say they have at some time set money aside for a financial goal, though those people also say they don't think they earn enough to save regularly.

America Saves participants will agree to identify a financial goal and create a plan to reach it - such as "I will build up an emergency fund to $500" or "I will pay down $300 in credit card debt," Brobeck said. Organizers will connect members to financial planners who have agreed to work in the program for free.

In some cases, banks that work with the program may waive fees to get people to save. In Cleveland, Brobeck said, CFA persuaded 10 banks and credit unions to remove minimum-balance fees for savers in the program.

"The research is clear that at almost every household income, almost everyone can save," Brobeck said. "The question is one more of interest and opportunity. We're trying to create interest, provide encouragement