COLUMBIA — Having lived in public housing and rental units most of her life, LaVonda Carter never really considered owning a house. That is, until she enrolled in a free program called Money Smart and bought her own home in 2004.
The path to first-time home ownership is a maze of paperwork, acronyms and fine print, especially to those unfamiliar with loans and credit. Money Smart helps people figure it out.
The Money Smart program runs for 10 weeks and consists of one 90-minute class per week. Those interested in getting on the waiting list to enroll may call the Columbia Housing Authority at 443-2556.
The 10-week program, sponsored by the Columbia Housing Authority, began in 2002 and became free to the public in 2004. Since then, its representatives have worked to help more than 400 people, most of them with low incomes, understand the importance of creating budgets, avoiding debt and saying no to frivolous spending. During a ceremony on Monday night, another 24 people celebrated their completion of the course.
Phil Steinhaus, executive director of the housing authority, said the program has been a success.
“One in 10 Money Smart graduates have gone on to become homeowners, (and) they are usually one of the first in their family to try to own a home,” he said.
Vikki Pauley,* Director of Housing Programs, started the Columbia Housing Authority’s Money Smart program.
“Getting a home loan is a lot more difficult than it used to be,” said April Steffensmeier, a former Money Smart instructor. “Now lenders are requiring a 5 percent down payment. It is very difficult now to find 100 percent financing on a home.”
That means having an ideal credit score is as important as ever for mortgage applicants.
A cook in Columbia Public Schools, Carter was struggling five years ago with a $4,000 credit card bill, two car payments and a $1,400 signature loan, and she was relying on Section 8 housing assistance. After graduating from Money Smart, she began to raise her credit score by paying off her debt. She eventually qualified for a mortgage and, after a $500 down payment, moved into a quiet neighborhood in north Columbia with her family.
Carter, 44, lives near Mexico Gravel Road with her husband, Thomas Carter III, and her sons, Thomas IV, 19, and LaMarco, 8. Her home has three bedrooms, two bathrooms and a two-car garage — a big step up from her previous homes, a duplex on Southview Drive and a two-bedroom apartment in Columbia Square.
“It’s a blessing, it really is,” Carter said. “My kids can go out to play, and I don’t have to worry about my boys getting into trouble in the inner city.”
Now Carter focuses on making her monthly mortgage payments and survives without credit cards. And she's discovered what she said are some other simple but nifty strategies for saving money.
"You'd be amazed at how much money you'd save if you take all your coins from January to December," she said. "That's a lot of extra Christmas money."
Penney Harrington also raised her credit score after taking Money Smart.
Harrington, who manages Paquin Tower for the housing authority, enrolled in the program last October and raised her credit score by 100 points in four months.
“The Money Smart program was a real excitement in my life,” Harrington told Monday’s graduates and families.
Money Smart instructor Cornelia Williams told the Monday night audience that one of the most important lessons to saving money is the need to “re-educate yourself to learn to say no.”
One new graduate, Tammy Sue Mejia, 41, said she learned to say no to caramel apple ciders from Starbucks, both because of the money she was spending and the fact that she had gained five pounds in a month. Mejia said the class taught her the importance of balancing a checkbook, paying off creditors and consolidating loans.
“I took out a loan for $289 and used that toward other loans since 2000 so I’d end up with only one (loan) out there,” Mejia said.
Mejia is working on her general education diploma and hopes to own a home within a few years. She might even try to buy the house she’s renting in north-central Columbia and fix it up. She said her 10-year-old son, Erick, inspired her to take the class.
“I want to do things different in my younger son’s life that I wasn’t able to do for my older son,” she said.
Suzanne Sanders was seeking rental assistance when she stumbled across a Money Smart flier. She and her 18-year-old daughter, Shadoe, both enrolled.
“I’ve learned more things in these (Money Smart) classes that will help me in life than I’ve learned in a classroom,” she said.
Money Smart has gained the support of businesses such as Bank Midwest, Boone County National Bank, Century 21 Advantage, Edward Jones and IaskEmma.com.
Chris Johns, co-founder of IaskEmma.com and a Money Smart guest lecturer, attended Monday night’s graduation ceremony.
“It was amazing how proud people were of their accomplishment,” Johns said.
Money Smart has also grown in popularity among its participants. Housing authority coordinator Caira Dean, who will teach the next Money Smart session that begins July 13, said there already is a waiting list for the program.
Williams congratulated her class on completing the program.
“Once you educate yourself, you no longer are a victim," Williams said. "You become a victor.”