Auto insurance claims adjuster Rex Fuhrmann thought he was stretching his paycheck as far as he could while striving to raise his three sons alone in their Chandler apartment.
Then in April, Fuhrmann attended a pilot workshop at his office sponsored by a nonprofit group called Arizona Saves. The speaker explained how to set financial goals and how to identify the ways many families waste their precious income.
Fuhrmann said he took a hard look at his credit card payment and the thrice-a-week dinner outings for chicken wings.
“I did the numbers and realized I was spending $200 a month on wings,” Fuhrmann said. “That’s kind of crazy. We do a lot more cooking at home and a lot less fast food. We’ve been able to trim our budget considerably because of the little things I learned here.”
Some experts believe the United States faces a “savings crisis,” with one in four households holding less than $10,000 in assets. Coming out of World War II, Americans typically saved about 10 percent of their income. Now, the typical American saves 4 percent, said Elliott Pollack, a private economist in Scottsdale.
Arizona Saves seeks to reverse that trend by teaching people the basic tools for building a nest egg. The group will launch a public campaign today with a proclamation from Gov. Janet Napolitano and a rally at the state Capitol.
The message is anyone can build a surprising amount of wealth by saving a few dollars every week.
“It’s a little thing, but I see what happens in workshops,” said Arizona Saves executive director Julia Ogden. “It changes people’s attitude from pessimism to optimism, that I can do this.”
A variety of conditions have encouraged people to spend more to help push the economy out of the 2001 recession. That includes two sets of tax cuts successfully sought by President Bush.
But several economists said the relationship between consumer spending and family savings is complicated, and people should never live from paycheck to paycheck when even a small financial crisis could force them into bankruptcy.
“A program like America Saves is largely targeted to people who are overextended or are in constant distress,” said Tracy Clark, associate director of the Bank One Economic Outlook Center at Arizona State University. “That isn’t going to have much an impact on the overall economy, but it has a tremendous impact on individual survivability.”
Arizona Saves is modeled on a national program started in 1999 by the Consumer Federation of America and the Ford Foundation, and costs no money to join. Elements of the program include:
- Signing a written document to become an Arizona Saver. This represents a specific commitment to start setting aside money, Ogden said.
- Speaking with a “wealth coach,” a volunteer who shares ideas about how to create a budget and how to cut spending.
- pening a no-fee savings bank account that doesn’t require a minimum balance. Arizona Saves has special arrangements with several local banks because no-fee accounts have become rare, Ogden said.
Arizona Saves is focusing on Maricopa County. But Ogden hopes to take the program statewide by the end of 2004.
Fuhrmann became a volunteer motivational speaker because of his experience. He tells people he doesn’t live like a monk. He and the kids still enjoy pizza and a movie rental on Friday nights. But the family has made progress in just six months in paying off credit cards and saving money for college.
“It just comes down to a goal, and being able to review your lifestyle and make a conscious effort,” Fuhrmann said. “It’s not a large effort, but it’s a conscious one to be able to say, ‘I’ve got money going out the door that really isn’t necessary and today that’s going to stop, or at least, cut back.’ ”