Saver Handbook. I will deposit $ each month into my VIDA account at. name of bank/credit union

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1 Dear VIDA Applicant: Saver Handbook Congratulations on applying for an Individual Development Account (IDA) where you will receive $3 or every $1 you save. This program is called VIDA and we are excited for your interest in building your assets. The VIDA Collaborative is made up of organizations that support individuals like you in achieving life goals and building assets. CASA of Oregon (CASA), the VIDA program administrator that will review your application and works behind the scenes to ensure program success. Through this program, you will receive not only the match but an opportunity to receive high quality training and education to help you prepare for purchasing your asset and how to best manage it afterwards. This handbook will provide you information about VIDA and the expectations of your participation in the program, if approved. Please read this handbook carefully and refer to it when you have a question, or contact your VIDA Specialist. Your VIDA Specialist is there to help you understand the program requirements, connect you with or provide the training components, and serve as a resource and support to you. The last few pages of this handbook will also serve as your personal development plan (PDP). The PDP is designed to help you and your VIDA Specialist to assess your needs, identify any assistance you may need to get to your goal, and schedule your required training. Fill in the worksheet below for a quick reference during your participation in the program. These details will be a useful reminder if you are accepted into the program. I am saving to purchase. asset goal I will deposit $ each month into my VIDA account at. name of bank/credit union I will reach my savings goal of $ by. (This is called your Savings End Date ) total savings goal month/year I will complete my financial education by. month/year I will complete my asset training by. month/year I must complete my purchases by. month/year (no later than 6 months after savings end date) My VIDA Specialist is and can be reached at. name phone number and/or address savings for life 1

2 Table of Contents Four Steps to VIDA 3 STEP 1 OPEN YOUR VIDA SAVINGS ACCOUNT 3 STEP 2 MAKE MONTHLY DEPOSITS 3 Your VIDA Statement 4 STEP 3 COMPLETE TRAINING REQUIREMENTS 4 Personal Development Plan (PDP) 4 Financial Education (10-12 hour requirement) 5 Asset-Specific Training (6-8 hour requirement) 5 STEP 4 PURCHASE YOUR ASSET 5 Payment Process 5 Getting Your Match Money 6 Withdrawing Your Savings 6 Receipts 6 Deadline to Purchase Your Asset 6 FINANCIAL EMERGENCIES 7 Leaving the Program 7 Emergency Withdrawal 7 Leave Of Absence 7 FAILURE TO MEET PROGRAM REQUIRMENTS 8 IDAs AND TAXES 9 QUESTIONS?? 9 Signature & Notes 10 savings for life 2

3 Four Steps to VIDA STEP 1 OPEN YOUR VIDA SAVINGS ACCOUNT Your first step as an approved VIDA saver is to open your savings account, known as an Individual Development Account or IDA. The money in this account is separate from any other savings account you might already have. After CASA reviews your application (7-10 business days) and confirms you are eligible to participate, you will receive a welcome letter from CASA with instructions for opening your account. Open the account at the bank/credit union that you selected in your application and also listed in the letter. Be sure to open by the date listed on the letter. Not doing so may require you to reapply. The savings account you open will be a joint account with CASA. This type of account requires permission from CASA to make a withdrawal. For ease and timeliness, please set up direct deposit or automatic transfer for your monthly deposit. The money you deposit is always YOURS and available if you need it in the event of an emergency or if you leave the program. Contact your VIDA Specialist for information. When you go to your chosen bank/credit union branch to open the account, please take: your welcome letter ( ed and mailed to you from CASA); two forms of identification (e.g., driver s license and social security card); and your first deposit and documentation for setting up direct deposit or automatic transfer If you don t have one already, we recommend opening a personal savings account for emergencies and other unexpected costs to avoid the risk of needing to end your participation in the VIDA program should you need the savings. Ask your VIDA Specialist for more information about savings accounts. Please be advised, the VIDA account cannot be used in place of a personal account. This means that it cannot be used for cashing checks, depositing payroll or social security or receiving tax returns. STEP 2 MAKE MONTHLY DEPOSITS Reaching your goals through the IDA program requires that you make a deposit every month according to your Savings Plan Agreement. Any lump sum deposits must be stated in your Savings Plan Agreement and pre-approved by CASA when you apply. These deposits can be from tax returns, Earned Income Tax Credits (EITCs), bonuses from your job, and prior savings up to $700. If you have problems making deposits, talk to your VIDA Specialist. S/he will work with you to include savings in your monthly budget and help you stay on track to achieve your goal. Once you meet your savings goal, we highly encourage Savers to continue To deposit at least $25 into your account each month until you purchase your asset. Be sure to time the speed of your savings so that you reach your goal when you are ready to spend. You will be expected to spend your money within 6 months of reaching your savings goal. savings for life 3

4 Four Steps to VIDA Missed Deposits If you are unable to make the full deposit stated in your Savings Plan Agreement, you must make at least a $25 deposit to avoid a Missed Deposit. If you deposit a lesser amount in one or more months, be sure you make it up by depositing larger amounts in the following months to keep on track to reach your goal by your Savings End Date. Not making regular deposits may disqualify you from the program and from receiving matching funds. You cannot miss more than 3 consecutive deposits or 6 total and still remain in the program. If you miss a deposit, CASA will mail you a missed deposit letter and this should serve as a reminder to continue making regular, full deposits. Remember to maintain good recordkeeping and always save your deposit slips for your own records. This is your account and you are responsible for obtaining and keeping your account number and being aware of your balance. Missing excessive deposits will result in your early exit from the program. Your VIDA Statement CASA will send you a VIDA statement monthly. Your bank/credit union will also send you statements. The VIDA statement shows your savings, the match money you have earned, and the total VIDA funds available. Please review both the CASA and financial institution statements for accuracy and be sure to notify us if you see an error. Keeping your statements is also a great practice in good recordkeeping. Please take time to review your statements in order to understand your account activity. If you have any questions or concerns about your statements, please contact your VIDA Specialist. STEP 3 COMPLETE TRAINING REQUIREMENTS Preparation, training, and skill development are key components to the VIDA program in addition to the monthly deposits. As a Participant, you will complete two types of training before you can make use your funds for your goal. One focuses on financial education to increase your knowledge skills with money management and financial planning. The other training focuses on preparing you to be successful with the asset you are saving to purchase. Personal Development Plan (PDP) You will complete the PDP once you are enrolled in the program. It is a plan for your time in the program and highlights key areas for growth and development as well as identifying where you will work with your Specialist to gain additional skills and knowledge. Topics reviewed as part of the PDP include identifying strengths and weak points, how to increase resources, taking a look at debt, credit, creating a savings plan (for savings outside of your IDA), and generating a coaching/training plan with your Specialist to ensure you are thoroughly prepared to make your purchase(s) when the time comes. Please be sure to work with your Specialist to complete this within your first six months of saving in the program. savings for life 4

5 Four Steps to VIDA Financial Education (10-12 hour requirement) These classes provide you with information about: Banking Basics Money Management Household Budgets Personal and Consumer Credit Investments and Insurance Developing Wealth Asset-Specific Training (6-8 hour requirement) The asset-specific training will prepare you to purchase your asset and have long term success with it. Depending on what you are saving for, there may be a variety of options for accomplishing your 6-8 hours of training. This may include research, online training, one-on-one or group classes or a combination of all of these. Often times, Specialists will connect with you a training expert in your area or may complete the asset-specific training with you themselves. STEP 4 PURCHASE YOUR ASSET Keep a copy of your training certificates for your records! After many months of savings, you will have reached your savings goal, completed your training, and be ready to make your purchase! Here are some important notes about your purchase: Assets are purchased with both your savings and match funds. Your savings covers 25% of the total cost and the match funds cover 75% of the total cost. Your vendor will receive two checks - a cashier s check from your VIDA savings account, and a business check from CASA of Oregon for the match funds. All purchases must be requested and approved before completing the transaction. It is your responsibility to ensure the vendors you work with will accept a third-party business check and a cashier s check as the form of payment. Payment Process Your VIDA Specialist will help you complete the Withdrawal Request paperwork and submit it to CASA after their initial review. To complete the form, you will need: The vendor name, the financial institution that holds your IDA, An itemized quote from the vendor, and The amount listed on the Withdrawal Request should match the quote. Note: Each asset class has their own Withdrawal Request paperwork and there may be other specific information you will need to provide such as a school ID, for example. savings for life 5

6 Four Steps to VIDA Getting Your Match Money CASA tries to be as fast as possible, but please allow 7-10 business days for CASA to process your withdrawal request. Once your request is approved, CASA will mail the match money portion of your payment in the form of a business check. CASA mails this check to you, the Saver. In some cases, a wire transfer is appropriate (home purchase) in which case the match funds are wired. It is your responsibility to keep your mailing address up to date. Checks that are lost due to unforwarded mail may not be reissued. If you make any withdrawals from your VIDA savings account without CASA s permission, you will be exited early from the program and will lose any match money you have earned. Withdrawing Your Savings Because your savings account is a joint account with CASA, you will need CASA s permission to withdraw the savings portion of your payment. CASA will send you a Withdrawal Authorization Letter that you need to take to your bank/credit union. This letter tells the bank/credit union: CASA has approved your request The amount of savings you are allowed to withdraw The vendor name to write on the cashier s check They will not charge you any money for the cashier s check You will also receive a letter to go to the vendor. In some cases, especially with colleges and universities, the vendor may not accept the checks without the letter, so please be sure to include it when you bring the checks to the vendor. The permission letter to withdraw your savings from the bank/credit union is only good for 30 days. Make sure you withdraw your funds right away! Receipts Along with the withdrawal permission letter CASA sends, you will also receive a memo for the business where you are making your purchase that directs the vendor to provide you, the purchaser, with a receipt. Make sure you keep a copy of the receipt and send it to your Specialist for every purchase. You will not be able to make additional purchases until we have the previous receipt on file. Deadline to Purchase Your Asset You must purchase your asset and close your VIDA savings account no later than 6 months after the Savings End Date you determine with your Specialist on your Savings Plan Agreement. If you don t reach your goal by your Savings End Date or spend the total funds within 6 months after that date, you may lose any remaining match funds, and your savings account will be closed. savings for life 6

7 FINANCIAL EMERGENCIES Financial emergencies can disrupt your household s stability and be very stressful. Even minor emergencies can have a huge impact on a household s financial well-being. While VIDA recommends that you have a separate savings account for financial emergencies or unexpected circumstances, we understand that sometimes these emergencies and circumstances are unavoidable. If your household has a financial emergency, you have some options to consider, including: Leaving the program and closing your VIDA savings account Requesting permission to make an Emergency Withdrawal from your VIDA savings account Taking a Leave of Absence from the program If you choose any of these three options, the VIDA Specialist will have you complete the appropriate paperwork. CASA will then review your request and let you know your next steps. If you are experiencing a financial emergency, contact your VIDA Specialist, who will be able to help you find solutions and provide information about your options. Leaving the Program You can leave the program at any time. Leaving the program will allow you to close your VIDA savings account and withdraw all your savings. You will not be eligible to receive any of the match money earned. Emergency Withdrawal You must have made monthly deposits in the program for at least six months before CASA will consider allowing you to make an emergency withdrawal. Your VIDA Specialist will help you complete and submit the required paperwork to CASA. Once approved, you will only be able to withdraw money from your VIDA savings account. You will not be able to use any match money. Please keep in mind that your account will not be extended an additional 12 months for the time you have to redeposit the withdrawn savings. You will still have 36 months to save and 6 months after that to purchase. Emergency withdrawals are only considered for the following reasons: Critical medical costs Preventing eviction Preventing foreclosure Critical living expenses following the loss of a job After making an emergency withdrawal, you have 12 months to redeposit the money you withdrew from your savings account. If you don t redeposit the money by that time, your account may be closed. Leave Of Absence A Leave of Absence (LOA) let s you take a break from making monthly deposits in your VIDA savings account so that you can put your money toward a short term financial crisis. If you would like to request a LOA, contact your VIDA Specialist. You must have made monthly deposits in the program for at least six months before CASA will consider this request. Your leave can last no more than six months. You still need to meet your savings goal by the deadline date in your Savings Plan Agreement. Savers are allowed one LOA during their time in the VIDA program. savings for life 7

8 FAILURE TO MEET PROGRAM REQUIRMENTS If you are having trouble meeting the program requirements, you should meet with your VIDA Specialist. S/he can help you work through your difficulties and help you stay an active participant of VIDA. Unfortunately, people sometimes violate program requirements and are no longer allowed to participate in the program. If you are exited early from the program, you will be required to close your VIDA savings account. The money in your VIDA savings account will return to you, and the matching funds that you earned will return to the pool of match money available for other VIDA participants. If you want to participate in the program in the future, you must wait at least six months before reapplying. If you are exited early from the program, CASA will send you the paperwork required to receive your savings and close your account. You may be exited early from VIDA for the following reasons: Not opening your VIDA savings account by the deadline date in your welcome letter Making a withdrawal without CASA s permission Missing more than three consecutive deposits or six deposits total Not attending the required financial education and asset-specific training Not communicating with your IDA Specialist or cooperating with his/her requests Not following your Savings Plan Agreement, which you signed with your application to the program savings for life 8

9 IDAs AND TAXES Savers do not have to report the IDA funds - both savings and match - when filing their taxes. However, savers may take an addition or subtraction; SUBTRACTION ORS Oregon allows a subtraction on the Oregon tax return for deposits to your IDA. Your subtraction is the amount of deposits made and interest received that are included in the saver s federal taxable income. ADDITION If a saver made a nonqualified withdrawal, he or she must report the amount as an other addition on the Oregon income tax return. WITHDRAWAL CREDIT ORS A tax credit is available to IDA account holders for withdrawals from an IDA. The withdrawal must be used for settlement, financing or other closing costs incurred in purchasing a primary residence. This credit is in addition to the subtraction for contributions to the IDA. The credit is the least of: The amount withdrawn from the IDA The qualifying closing costs to purchase a primary residence The taxpayer s tax liability for the year, or $2,000. There is no carry forward and the credit is not prorated for part year residents or nonresidents. For more information on the interaction of IDAs and taxes, consult a tax professional and view the following links: IRS ruling on the treatment of IDA funds: Oregon Department of Revenue IDA page: QUESTIONS?? If you have a question or a concern, take notes below and be sure to contact your VIDA Specialist. S/he will address your questions and concerns according to the policies of their organization and of CASA of Oregon. The IDA Team at CASA of Oregon sincerely congratulates you on working toward reaching a major life goal. We wish you the very best! CASA of Oregon ida@casaoforegon.org Please sign and date the next page and return to your VIDA Specialist savings for life 9

10 Signature & Notes Questions or Comments to Discuss With Specialist: By signing this, I declare I have carefully read this Saver Handbook and have discussed any questions I have with my VIDA Specialist. Signature Date savings for life 10