ABOUT PAM MADDOX:
Pam Maddox is a financial counselor at the Washtenaw County Financial Empowerment Center, which is part of the Washtenaw County Office of Community and Economic Development.
RESOURCES:
Washtenaw Office of Community & Economic Development (OCED)
Washtenaw County Financial Empowerment Center (FEC)
TRANSCRIPTION:
David Fair: This is 89 one WEMU, and in the highly politicized and polarized environment we find ourselves, there are often people criticized for looking for handouts. Well, the truth is we find ourselves at a time when more people are in need of a hand up. I'm David Fair, and welcome to this week's edition of Washtenaw United. There are a number of organizations, nonprofits, and government entities that work to fill in the financial and resource gaps and do offer a hand-up and a way out. That includes the Washtenaw County Financial Empowerment Center. It is part of the Washtenaw County Office of Community and Economic Development. Pam Maddox is a financial counselor at the Empowerment Center, and she's on the other end of the WEMU phone line. Thank you for making time today, Pam! I appreciate it!
Pam Maddox: Thank you for having me! I'm very excited!
David Fair: Well, when you have people walk through your door and sit down with you, what do you find is the biggest challenge they're facing when it comes to creating financial stability?
Pam Maddox: Most times, the biggest challenge that I find is that either there's not enough money, they're underemployed and they don't know how to get out of the financial situation they're in. And also, lately, what I've also been finding is that the rental market has just blown up as far as how much rent is. Sometimes, rent is 15, 16, 17, $1,800, and you have to have a certain income in order to be able to afford rent and to eat.
David Fair: Yeah. Sometimes, the prices of food have gone through the roof, too.
Pam Maddox: Exactly, exactly!
David Fair: Well, a lot of times, the way people accommodate rising prices and the need to find a way to live day-to-day is the use of credit cards. And that can be a dangerous endeavor. Do you find that people are maxing them out?
Pam Maddox: Oh, tremendously! So, not only are they maxing them out, maxing out their credit cards, what also tends to happen is once your credit card is maxed, the interest rate goes up. So, if you already start with an 18% interest rate and now you maxed the credit card, you could be looking at a 26-28% interest rate hike.
David Fair: That's almost criminal!
Pam Maddox: It is! It really is! And it's usury, basically. But because of the fine print that many people don't read, it's legal to do. And so, when you have an interest rate that's 28%, it makes it very difficult for you to pay that card off. I'll give you one example. I had a woman who came in. And she had a credit card. I will not name the credit card. And it was a 29.99% interest rate. Her monthly payment on that credit card, because she had of high balance, was $789 a month.
David Fair: She'll never touch the principal.
Pam Maddox: $589 of that money went to interest only.
David Fair: That is a certain way to end up in bankruptcy, which is no good for anyone. So, what is the process you find most effective in helping people get out?
Pam Maddox: The first thing: we got to create a budget. We got to figure out why are you using these credit cards? What are you using these credit cards for? Most times, people use credit cards as an extension of their cash. Now lately, I've been seeing people using it just to afford food. Before, I used to see them doing vacations, buying furniture that they really didn't need, things like that. Now they're using it just to buy regular things, like food, clothing and those types of things. So, the first thing we have to do is create a budget, and then we have to get your income to stay within that budget. Because, again, credit cards are not an extension of your cash. I hate to even say that they you should use them for emergencies. Honestly, we need to save for emergencies.
David Fair: Washtenaw United and our conversation with Pam Maddox continues on 89 one WEMU. Pam is a financial counselor with the Washtenaw County Financial Empowerment Center. I'm always interested in why people choose the work they do. What was it that brought you to a career in financial counseling?
Pam Maddox: Oh, my goodness! Let me tell you!
David Fair: Sounds like it's a story!
Pam Maddox: Oh, yes, it is! But I'm going to try to make it as concise as possible. So, I have personally been through foreclosure, divorce, IRS problems in the tune of owning over $200,000, credit card debt, car repossessed and garnishment. So, it all started in college with the free credit card offers that they offer students when they come up. And it peaked when my husband--my ex-husband--divorced me, leaving with $200,000 in IRS debt. So back then, when all of this was happening, social media wasn't really as prevalent as it is now. So, now with social media, you can find somebody on YouTube, Instagram, Facebook that has had the same problems as you've had. But I had to go to the library. I had to research how do you correct these types of problems that I've had. One thing that I did is I went to different accountants, and I got a free consultation about my IRS problems. And so, I wrote down everything that they said. And then, I went to the IRS and negotiated on my own. So, I like to say this job kind of fell in my lap because my experience and everything that I had been through, it helped me want to help other people that experienced the same thing that helped them get out.
David Fair: So, do you share that story with your clients?
Pam Maddox: You know, not all the time. Like, when they come in and they have tax problems, then I say, "Let me tell you about a tax problem." So, it encourages them. They're like, "Oh Pam, I can't get out of this!" Of course you can. Now, I do sometimes share about my credit card debt. I had, like, $40,000 in credit card debt. And then, one time, I had $80,000 in credit card debt, and I wasn't even making $80,000. And people say, "How do you do that?" I was just trying to live. After I got divorced, I was just trying to live just trying to catch up on things and then you start getting cash advances. And it just becomes a bad cycle. So, yes, my life has brought me to be a financial counselor.
David Fair: And it is my experience that I learn better from people who have been through a particular hardship than from someone who's never gone through it. So, when you do choose to share the story, do you find that a client is more receptive to your help and more open to it because you have something in common?
Pam Maddox: Definitely! You know, there's a saying that says, "Experience is the best teacher." I say no. The best teacher is learning from someone else's experience.
David Fair: Yeah, I like things the hard way personally, I guess.
Pam Maddox: Most of us have gone that route. So, most of the time they open up more because now they see that, "Oh, she's been through a lot of this stuff!" Because, a lot of times when they come to me, they think I'm just going from book knowledge. Now I understand I have the book knowledge as well, but I also have the experience. And so, I'm able to help different clients out of different things because it's like, "Oh yeah," when they come in, "I been through that!" Here's what we're going to do. And then, I just walk them through the process.
David Fair: This is 89 one WEMU's Washtenaw United. And we're talking with Washtenaw County Financial Empowerment Center financial counselor Pam Maddox. Now, getting out of these problems requires a great deal of patience and diligence. And often, those are hard commodities to take on with any degree of consistency. How do you help people acquire those traits?
Pam Maddox: Well, not only that, you also have to be consistent. So, with our program, you can come see me as many times as you need. So, I have them come. And honestly, I talk to them weekly. I give them homework. So, that way, I can keep them accountable. And I know what they're doing. If they have questions, they can email me. And they can talk to me. And so, I'll even check in. If I haven't heard from you in a couple of weeks, I'm going to check in with you, because somewhere, when I haven't heard from you in a while, that means you fell off the the path. And so, if I have to call you. I'll call you in just to make sure. Okay. What's going on? Let's get back on the path. Remember, we have goals. We want to be debt-free. We want to buy a house. Those types of things. So, yeah, consistency is key.
David Fair: Getting people to financial stability and security is one thing. But I'm sure you have people walk through the door that need immediate, if not emergency assistance today. How do you direct them? And who do you work with that can help take care of those needs?
Pam Maddox: Usually, we work with Barrier Busters. Barrier Busters is a program where they have funding where they can help people who are delinquent on their rent or who needs--
David Fair: Electric bills? That kind of thing?
Pam Maddox: Electric bills. Exactly. Anything like that. They can help people with that. But then also, I have contacts if you need food. Some new mothers may need, like, a car seat. So, we have a list of different contacts that can help you if you have immediate needs. And I can give you that information, so you can talk to them as well.
David Fair: If people are going to walk away from our conversation today with one crucial piece of financial advice, what is it?
Pam Maddox: I would say you got to have a budget. If you do not have a budget, your money will just go all over the place.
David Fair: And that's regardless of income level, right?
Pam Maddox: Exactly. A budget helps you map out how much you have. I always tell people I find people that have financial problems if they only make $10,000 or if they make $10 million. And the problem is, if you don't have a budget, you don't know where your money is going or where it's supposed to go, you have to create a budget. So, once we create a budget, then I look at it. Okay, so now we're going to need more income getting what's going on or we need to decrease your expenses. Preferably, I like to decrease the expenses and make more money because then, that way, we'll have money for you to save on things that will come up like car repairs or if you need new furniture because your bed is just broken, those types of things. So, I would just say to leave away with it, you must have a budget--so a max-out where your money needs to go every month.
David Fair: Well, thank you for sharing with us today, Pam! It's been a true pleasure!
Pam Maddox: Thank you for having me!
David Fair: That is Pam Maddox. She serves as financial counselor at the Washtenaw County Financial Empowerment Center. It's part of the Washtenaw County Office of Community and Economic Development. Now, you can find out more about Pam and the center and the work it's doing by stopping by our website at wemu.org. We'll get you all linked up. Washtenaw United is brought to you in partnership with the United Way for Southeastern Michigan. And we bring it to you every Monday. I'm David Fair, and this is your community NPR station, 89 one WEMU FM Ypsilanti.
UWSEM STATEMENT:
The Financial Empowerment Center (FEC) and Barrier Buster program are under the Washtenaw County Office of Community & Economic Development (OCED)—a division of Washtenaw County that supports individuals, families, and the local economy to enhance quality of life.
This year, Joyful Treats Community Development received a $10,000 award from the 2024 cycle of United Way for Southeastern Michigan’s Power of the Purse Fund—an investment that supports existing and emerging agency programs and initiatives that increase the financial capability of people who identify as women.
This funding was used for a caseworker collaborative that delivers direct cash assistance to women who fall within the ALICE thresholds to increase financial stability and mitigate unanticipated crises.
Every year, United Way hosts the Power of the Purse event, which showcases the work of grantees and generates funds for future grantees.
WEMU has partnered with the United Way for Southeastern Michigan to explore the people, organizations, and institutions creating opportunity and equity in our area. And, as part of this ongoing series, you’ll also hear from the people benefiting and growing from the investments being made in the areas of our community where there are gaps in available services. It is a community voice. It is 'Washtenaw United.'
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