Advice from Successful Savers

Edgar Proctor

"I was taught that the $1 or $2 that I would save each day would end up being important – that was one of the biggest lessons – to not always think of savings in terms of putting $100 in the bank today."

After spending two years in transitional housing, Edgar Proctor purchased a 2-bedroom home in the River Terrace neighborhood of Ward 7. Edgar talks about the change in perspective that made it possible for him to become a home owner.

What was your attitude about buying a home before you joined the IDA Program?

It seemed way out of my reach. I was saving a little, but even if I could get a down payment together, I didn’t think I’d be able to afford a mortgage payment every month. But then some things changed - I found out about the IDA program, interest rates came down, and people were willing to help me find a home that I could afford.

How did you learn about the IDA Program?

A friend in the SRO (single room occupancy) facility turned me onto it. I guess it was advertised, but I wasn’t paying attention. So my friend kept telling me about it, but it took me a while to sign up because it sounded too good to be true – that someone would give me $4 back for every dollar I saved. So I was skeptical at first, but I finally sat down with a counselor and found out a little more about the program, and my skepticism started to fade.

What were some of your biggest challenges as you saved to buy your home?

The biggest challenge was to start denying myself some of the things I wanted instantly – like clothing, jewelry, a new car. I always liked to buy flashy things, but I had to change my paradigm and start concentrating on saving to buy things I had never thought about before – like appliances and dishes – things that I would need if I bought a home.

I also had to work a little harder. After joining the IDA program, I renewed my barber’s license and started working part-time at Lewis Barber Shop [in Northwest DC]. I had been a barber for nearly 15 years, but I let my license expire.

Did you have any debts to pay off before buying a home?

Very little, because I was coming from a life of almost total irresponsibility. I was locked up from 1991 to 1998, so there were trivial debts that were written off as “uncollectible.” But when I got out I did have to settle a $2,000 debt I owed to a property management company. I had to pay it off because when I first went to a lender, I found out that it was making my interest rate higher. It took me a year and a half to pay it off, but my credit score was much better after that.

What kinds of things did you learn in the IDA program?

I learned how to be a better consumer, how to improve my credit score, how to save. I was taught that the $1 or $2 that I would save each day would end up being important – that was one of the biggest lessons – to not always think of savings in terms of putting $100 in the bank today. I learned to find ways to live in a more frugal manner. Instead of spending $6 on lunch every day, I started buying cold cuts and packing my lunches for $6 each week, and putting that extra money in my IDA.

How did you find the home that you bought? Did you have a real estate agent?

I have a friend - a client of mine in the barber shop – who is a real estate agent, and she helped me a lot. She’s a good friend.

Tell me about your house.

It’s 2 floors, with 2 bedrooms and 1 bathroom. I have a front yard and a back yard, washer and dryer, central air conditioning. I love it. It’s just enough house for me, and it’s in a real nice section of the city. Most of the people in the neighborhood are retirees, so it’s pretty quiet, and everyone is real nice, and we look after each other.

Are you currently saving for any home repairs or home improvements?

Well, since I’ve been here I’ve done a few things – like refinish the floors. I still want to change the kitchen and bathroom floors, and I need to purchase a back door. There’s always something to do. I’d like to get professional help with some yard work, too. But I’m not rushing – I’m not going to put myself under any strain, because I’m happy with the way things are now. I’ve learned not to get in over my head – some things I’ll have to put off until later.

What types of accounts have you been saving in since graduating from the IDA program?

I have several accounts. When I started the program, I had a checking account at the credit union, and then I opened the IDA savings account at Citibank. Today, I’m still putting money in a regular savings account, and I have a brokerage account, where I trade stocks and bonds. And I also have a retirement account through my job at the hospital. I’m managing my financial life a lot better now.

Have you influenced family and friends since becoming a better saver and home owner?

Oh yeah, two of my friends who hadn’t even thought of owning a home, they’ve both become home owners. One of them makes about the same as me, and the other earns about twice as much. When he saw that I was able to buy a home, he said “Man, if you can do it, I know I can!” So people see what I was able to do, and it helps them to get the ball rolling.

Are you saving for anything else now that you’ve bought a home?

Well, not right now. You know, I’ve been driving the same car for a long time, and I thought about getting a new car, but not right now. I’d rather put my money into my home – maybe work on the lawn, because I like a beautiful lawn. A new car would be nice, but I don’t really need it. I try to keep it that simple now – do I need it, or do I just want it? So I think I’ll keep my car for a few more years.

So if you were asked to sum up your experience in the IDA program, what would you say?

They really got me to start thinking about my future – to see that things were possible for me. Just because I had messed up a period of my life, it didn’t mean the rest of my life had to be like that. A lot of people get derailed in life, but that doesn’t mean you have to stay derailed. You can always get back on track.

When I got out [of prison] in 1998, I had nothing – my mother and father were deceased, and I was divorced. I came home with nothing, and nowhere to go. I started out living in my sister’s basement, and in a few short years, because of the IDA program, my life is altogether different. This program makes it possible for other people like me – people who have desires but just need a little help – to reach their goals.

It took me longer to save for my down payment than I had hoped, and it was a struggle at times, but now that I’ve done it I’m so happy. Because when I look at how rental prices are going up, I know I don’t have to worry, because I have a fixed mortgage payment. That’s a big relief.

Editor’s Note: Since enrolling in the IDA program in 2000, Mr. Proctor has increased his annual income by 20%.

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