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HARDY: Hello, and welcome to "FEAB 101." I'm your host, Mel Hardy, and this is a unique series that the IRS has come up with.

We're going to be traveling across the country, talking to our partners about what they're doing around financial education and asset building.

Today, we're here in the nation's capital, as you can see. We're going to be talking to one of the partners here, CAAB -- Capital Area Asset Builders.

And CAAB has been in business since 1996, helping taxpayers broaden their understanding of financial education and asset building and building wealth.

So, each one of these video series will highlight a unique concept.

CAAB is going to talk to us today about credit counseling, so let's head over to CAAB and see how they bring this work to life, all right? Come on.

WOMAN: Mel Hardy of the IRS. How are you? It's so good to see you. Come on in.

HARDY: And, you know, today I came  because we're shooting a series of videos, and we want to talk to partners across the country, and, of course, this is the first one here in Washington, D.C., and we want to talk to whoever's handling the Financial Education and Asset Building teaching to find out more about credit counseling.

WOMAN: Okay, well, that's a great thing, especially in this economy -- a lot more people are interested in credit counseling and paying more attention to their credit scores, because credit is an asset, actually, now.

As you know, it can make a huge difference between what you pay for your home. You know, you can pay a tremendous difference in buying a home based on what your credit score is now.

Right, we're doing a lot more stuff in the community, as I said, so you will get to talk to Linda Stroman, who's put together a number of financial cafés out in the community. they have one-on-one counseling sessions with financial planners and credit counselors.

STROMAN: Hi. How are you?

HARDY: I'm well, Linda. How about you?

STROMAN: Nice to see you again.

HARDY: Good to see you.

STROMAN: And our classes are really about -- They're about different financial topics, but it's really about empowerment for folks, to help them, one, analyze their behavior with money and to figure out what's going to work with them.

What can they do differently so they can become whole with their money. They can be in harmony and healthy and have good relationships and not stress about money like most of us do.

So, our classes cover things like money behavior, tracking expenses, budgeting, several classes on credit, and also on savings.

We realize that credit, it just ties into everything that we do these days, and, more importantly, employment, so folks are kind of seeing that more and more.

So what CAAB offers is, first, through our classes, we talk about, "What is credit? Why is it so important?" to help people get a healthy understanding about it.

And then we have the opportunity to sit down and do a one-on-one, and that's to kind of just analyze their own personal finances -- kind of look at their credit reports, see their behavior as far as their spending, and then help them come up with a plan and a goal to try to figure out what they want to do to get in, you know, a healthy situation, get that credit score moving up.

HARDY: A lot of partners around the country may not know how to set up a program like this or employees in the IRS may not know how to talk to their partners about starting something.

How did you guys get started with this, and what advice would you give to another organization like CAAB wanting to start something like this?

STROMAN: Well, we got started -- We started, actually, doing financial education in general in 2006, and it was attaching to our Matched Savings program, where folks can purchase homes, go back to school, start a business. And one of the things we realized is we didn't want to send people out there to buy a home and not have the education about particularly their personal budget, 'cause if they go from an apartment to a house, that whole budget just changes...

HARDY: Right, right.

STROMAN: ...and also having good and healthy credit before they actually sign on the dotted line, you know, to purchase a home.

The classes here at CAAB are free, so --

HARDY: They're free?

STROMAN: They're free.


STROMAN: Doesn't cost anything but just some time and energy to come in and just kind of just look at -- you know, do a self-assessment and look at your own circumstances.

We're also taking it out to the community, so we're attaching our financial education series to tax sites.

HARDY: How do you see tax prep -- free tax prep through VITA -- going into credit counseling?

STROMAN: Oh, it's a perfect match.

HARDY: All right. Tell me how.

STROMAN: A number of folks are getting back decent returns, and what we want them to do is do something healthy with that return besides going out and buying stuff or things, you know, purchasing things that don't have much value or go down in value.

So taking that, figuring out that, "I have this lump sum of money. What can I do? "I have some debt over here. I have some savings goals.

"Can I use it to pay off this debt?

Can I put it into savings, or can I do a combination of both?"

HARDY: Why would a partner very similar to CAAB want to get involved in credit counseling?

STROMAN: Well, it's really to help the community, to help their customers become comfortable with their finances.

HARDY: Mm-hmm.

STROMAN: So one of the things that we like to do here at CAAB is we call -- we call credit -- It's credit counseling. People recognize it that way.

But what we really want to do, what CAAB's goal is, is actually to do credit coaching.

HARDY: Ah. Okay.

STROMAN: And I think the word "coaching" is a little softer for folks when they hear that. A lot of us just don't have the awareness of finances.

HARDY: Mm-hmm.

STROMAN: You know, what is it all about, particularly with the credit piece -- You know, what do we need to do with that?

There's a fear out there as far as finances.

HARDY: What type of fear?

STROMAN: Well, one of the things that I say when I'm in class is I say a saying, "What you don't know won't hurt you," and most of us have heard that saying, but, actually, my version of it is, "What you don't know will hurt you or can hurt you."

HARDY: I like that.

STROMAN: Right. And, basically, it's because, if we don't look at our credit, if I'm not monitoring my credit, somebody else is. Somebody else might be out there using it.

It ties into self-esteem for us.

HARDY: What do you mean by that, self-esteem?

STROMAN: As far as, you know, how we -- Our behavior with money comes out through our self-esteem, through how we project things, through the things we buy, you know, our behavior.

And sometimes if we don't have enough finances or our credit is not that great, it kind of, you know, puts a -- brings our self-esteem down.


STROMAN: Or we think about how people view us because we have these situations going on as far as our finances are concerned, and what we want to do is just help people kind of come through that and not tie money into self-esteem, but just find a way to have a healthy balance with their finances.

HARDY: Linda, thanks so much. I look forward to the class tonight. Thank you so much for being on our very first "FEAB 101" video.

STROMAN: Thank you.