There’s a famous proverb about poverty and charity that says, “Give a man a fish and he eats for a day; teach a man to fish and you feed him for a lifetime.” I’ve always thought this saying needed to be updated by adding, “…but teach a man to catch a lot of fish, to sell them at the market and to save his money to buy more boats, and pretty soon he catches enough fish for everyone.”
Okay, it needs a little work, but you get my point. The challenge of course isn’t teaching the man to fish, or even to catch a lot of fish; the challenge is getting him to save his money. That challenge has never been greater than it is today.
We are bombarded with ads convincing us to spend. Credit is dispensed like Pez candy: zero down, zero interest for a year, no payments for 30, 60, or 90 days — you get the picture. But when it comes to encouraging people to save money…silence.
And this silence is compounded by the fact our government punishes saving. Interest on a simple savings account, which accrues interest around a paltry one percent, is taxed on the first penny earned. Same with the interest earned on CDs and money markets, which also require deposits.
What about long-term savings for retirement? Not much better. Sure there are 401ks and IRAs. But there are limits on the annual amount that can deposited, the funds are nearly untouchable until retirement, and interest earned is almost always taxed upon withdrawal. And, of course, a stock market collapse like that which occurred in 2008 could wipe it all away just when you need it.
And this problem of punishing savings is more acute for the people Goodwill® serves. Prominent in the advertising bombardment are payday loans, pawn shops, and title loans that sap hard-earned wages from those most vulnerable to these lenders. Once an individual living paycheck to paycheck gets trapped in the cycle, saving becomes nearly impossible.
Educating people on how to save and avoid being exploited by payday lenders, and advocating for policies that support these goals, is a priority for Goodwill. We are experts at helping a person “learn to fish,” after all. In addition to helping them prepare for and find jobs, we advocate and support them in building financial wellness. We hope many will become the fishermen who buy the boats and feed everyone.
