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Volunteers in Madison, Wisconsin helped complete more than 490 federal income tax returns this season. Sixty-two volunteers working under the aegis of the UW Credit Union offered the free help in eight locations around the city.
Evan Smith, a junior accounting major at the University of Wisconsin-Madison was one of the trained volunteers. A native of the Milwaukee suburb of Brookfield, Smith helped about 20 people with their tax returns, and “enjoyed every minute of it,” he says.
“Lots of times people came in and told me how much they needed the money, and I was able to fill out the tax forms and show them they got a couple of thousand dollars back or a couple of hundred dollars back, and they were grateful. It did make me feel really good,” says Smith, who volunteered through Beta Alpha Psi, an accounting fraternity.
For the average client the tax help in past years meant $500 more into his or her pocket than would otherwise be the case. For someone earning $11/hr, that amounts to a 2 per cent raise. That’s money that does not come out of the employer’s pocket, meaning both the worker and the employer benefit.
Does online financial education work?
A report sponsored by the Filene Research Institute and conducted at the University of Wisconsin-Madison in cooperation with the Wisconsin Credit Union League suggests that online investor education improves financial literacy and changes behavior.
Employees from 45 credit unions participated in the program, known as RP3, Real Progress and Paths to Prosperity. Originally completed in 2009 and 2010, more employees reported writing budgets (6% increase), having a written financial plan (5% increase), increased use of IRAs (8 percent increase), and increased likelihood of having saved enough money for three months of expenses (5 percent increase).
Author J. Michael Collins, PhD, assistant professor, director of the Center for Financial Security at the University of Wisconsin and John Hoffmire, PhD, directed a series of surveys in conjunction with financial education modules for hundreds of employees at Wisconsin credit unions.
A full report on the effects of the course is available from the Filene Research Institute, a not-for profit research organization focusing on scientific analysis of consumer finance issues. It examines matters vital to credit unions. Additionally, more information about online financial education from one of the partners, Precision Information, LLC can be found at http://www.educatedinvestor.com/index.html.
This project is funded in part by a grant from the Investor Protection Trust (IPT). The IPT is a Washington, DC-based nonprofit organization dedicated to investor education. Since 1993 the IPT has worked with the states to provide the independent, objective investor education needed by all Americans to make informed investment decisions. Visit www.investorprotection.org
Another tax preparation site started with major support from Progress Through Business is run by UW-Marathon County in Wausau, is facilitated by the AmeriCorps VISTA program and falls under the umbrella of the Wisconsin Institute for Public Policy and Service. This program fits into the mandate of both the UW Colleges and UW-Extension.
UWMC VITA programs promote financial literacy by helping clients learn how to best use their refund to accomplish long-term goals. For the average client the tax help means $500 more into his or her pocket than would otherwise be the case. For someone earning $11/hr, that amounts to a 2 per cent raise. That’s money that does not come out of the employer’s pocket, meaning both the worker and the employer benefit, especially as employees tend to stay with employers when the workers feel that they are receiving fair value for their labor.
The 2011-2012 AmeriCorps VISTA volunteer, Deanna Meek, serves with the national network of VISTAs that coordinate programs for non-profit organizations. So far this year, the volunteers have completed 92 sets of tax forms, about a 100% increase over last year.
Pensions & Investments Magazine recently recognized a collaborative effort by Doorways to Dreams, Staples, and New York Life Retirement Services with the Eddy Award for The Bite Club. The award has been sponsored by P&I magazine since 1995 and recognizes best practices in investment education by defined contribution plan sponsors and service providers.
Placing first in the “Special Projects – Corporate 5,000+ Employee” category was The Bite Club, an online retirement game which allows players to be the supposed owners of a vampire nightclub. Players must make financial decisions as the game progresses to fix up the nightclub and still save some for the future. The game is part of a multi-faceted effort to educate employees about making financial decisions and how different actions affect outcomes.
The Bite Nightclub game as well as other games created by Doorways to Dreams can be found at www.financialentertainment.org. Players can try farming with Farmblitz, help celebrities getting out of debt with Celebrity Calamity, give tax refund advice in Refund Rush, and decide how to handle money in Groove Nation.
