Meet Stephanie Vann,
DC Saver

“I'm more in tune with my budget... I have a goal I want to accomplish. It's not that I didn't have goals before, but I am motivated even more now because I have a support system.”

"They say when the student is ready, the teacher will appear," says Stephanie Vann. "And I believe that I am ready to learn."

Before she found DC Saves and enrolled in money management classes, Stephanie was learning about financial stewardship the hard way, as an unhappy borrower of a payday loan that she was struggling to pay off.

A single mother of three who works for a television production company while she finishes her graduate degree from American University, Stephanie turned to a payday lender when her paycheck couldn't cover a big expense. "Around August I took out a loan at a payday loan place," she explains. "I've done it before even though I don't like to." Stephanie received the loan of $500 to enroll her children in the aftercare program where they go after school while she's at work. Normally she budgets for this expense, but she had used the money set aside for aftercare for her kids summer camp. Stephanie often uses her tax refund to pay for camp, but unexpected expenses had already used that money.

Feeling beholden to the payday lender and frustrated that she didn't have the means to pay off her loan, Stephanie read with interest an article in DC North by DC Fiscal Policy Institute Executive Director Ed Lazere. His column described then-pending legislation in the DC City Council that capped interest rates that payday lenders can charge at 24%, which lenders said would prevent them from making a profit and force them to shut down. Prior to the enactment of the Payday Loan Consumer Protection Amendment Act of 2007, payday lenders had typically charged borrowers 300% to 700% in interest.

"As I read the article," Stephanie recalls, "I got excited and I said 'I hope they shut them all down.'" Stephanie contacted Lazere to find out whether this legislation would result in forgiveness of her loan. He referred her to CAAB to get more financial guidance.

Capital Area Asset Builders Executive Director Colleen Dailey worked with Stephanie to connect her with a credit union so she could pay off the rapidly rising amount of her payday loan. After trying one credit union that denied her a loan because her debt to income ratio was too high, Stephanie was able to take out a loan through the Treasury Department Federal Credit Union.

"There's no quick fix," Stephanie says. "I remember the [payday loan] company said 'Once you pay this off, you can apply for another one.' I thought why would I want to do that? You're trapped. That's how I felt every time I go in there. I feel ashamed that I'm even going in."

Now that she's paying off the payday loan, Stephanie is getting her financial house in order. "I know I need to start saving for an emergency fund to start putting things aside. I've opened a savings account. Hopefully I'll start saving more. I'm trying to reduce debt by finding a roommate or moving to a cheaper place so I can save properly. Once I take care of this debt I'll start saving so I won't have to go back to payday lenders."

"Being able to take the money management classes has made me take a serious look at budgeting my money," Stephanie says. "I'm more in tune with my budget because going to the class keeps it in the forefront of my mind. I have a goal I want to accomplish. It's not that I didn't have goals before, but I am motivated even more now because I have a support system."

"In the money management classes I have learned about credit scoring and the ins and outs of credit cards and financial organizations," Stephanie explains. "I learned about how they determine your FICO score and how to get a better FICO score. I'm working toward the larger goal of purchasing a home someday. Meanwhile, I'm definitely going to take care of this debt so it won't affect my credit. I want to have a better credit rating so I can have a home. I plan to enroll in an IDA account."

CAAB also introduced Stephanie to DC Saves--the local branch of a national program that promotes saving for everyone and offers online tools for wealth building and financial management. "DC Saves is a great benefit," Stephanie says, "to get ordinary people thinking about saving and actually saving. Even if it's ten dollars a month."

It sounds like the lessons are paying off, in more ways than one. Stephanie's story of savings and change has helped her win the grand prize in the Essence magazine Brighten Your Financial Future contest. Her prize package included $500 to open a savings account and additional information and services to help her on her way.