People with disabilities, whether they are living on Social Security, earned income, or some combination, would do well to become financially literate, learn about financial planning, asset building and other financial strategies, says Tammy Deininger, Director of Workforce Development, Goodwill Industries of San Antonio.

Part of what Deininger does is educate individuals on how to save and why it is important to save. She also teaches disabled persons the skills they need to maintain their assets, such as dealing with the mortgage, utilities and home repairs. Deininger does trainings through Money Smart Financial Literacy, a six-module program including a homeownership class that is funded through the federal government.

Individual Development Accounts
A major program in helping people with disabilities put away money is the Individual Development Account (IDA), a matched savings account, that allows people with disabilities to save for homeownership or education. Individuals can contribute money from earned income as well as Supplemental Security Income or Social Security Disability Insurance. However, legislation pending will allow IDAs to be funded solely by Social Security, enabling a greater number of people to benefit from the program. Advantages of an IDA over a traditional savings account, says Deininger, are that they don't count as an asset for purposes of qualifying for benefits, making them an extremely attractive savings option.

In 2003, the federal government funded a demonstration project called American Dream, in which IDAs were funded by the government with the agency administering the account agreeing to match the funding. Goodwill Industries participated in the program, assisting five people to become first time homeowners, with 40 individuals currently less than $1,000 away from becoming happy homeowners.

Says Deininger, the program allowed individuals to save for a home with investments as small as $25 per month. Thus, she says, it is rare to find someone who can't save successfully for a home or other major asset through an IDA. In the American Dream program, once an individual raised $1,000, Goodwill would fund the IDA with $4,000 more, providing that individual or family with a $5,000 down payment on a home.

To find an IDA fund manager in your area, go to the Corporation for Enterprise Development's website, www.cfed.org, for a database of IDA sources, searchable by funding source and location. "Each program," says Deininger "has their own qualifications. So be sure and call to find out if you meet the guidelines."

IRS Increasing Access to Economic Services
Goodwill Industries isn't the only program working to increase the financial literacy of people with disabilities, however. The Internal Revenue Service (IRS) recently created a disability initiative in 2004, aimed at increasing access to economic services. Theresa Lucotti-Bildik, Senior Tax Specialist with the IRS says the program started in 2004 as a partnership between the IRS, the National Disability Institute and Health and Human Services. As part of the program, they created a publication called "Living and Working with Disabilities" available in English, Spanish, Braille and in electronic formats.

Richard Keeling, a Tax Analyst with the IRS, added that many people with disabilities don't file tax returns, yet for some it may be beneficial to do so. "Certain states like Minnesota and Kansas have a lot of credits for people with disabilities, and filers may be eligible for earned income tax credit or elderly credits." Yet, says Keeling, many people with disabilities whose only source of income is from the Social Security Administration don't pursue filing.

How to Improve Your Credit
Lydia Rodriguez, Financial Counselor with ACS Financial Readiness, says credit affects people with disabilities the same as everyone else. Your credit score is calculated using the salary you earn or the source of your income. Recent legislation allows every person to get free copies of their credit report annually. Rodriguez recommends www.annualcreditreport.com to obtain these reports.

The FICO score, a credit rating, is the main thing creditors look at when deciding to offer you a loan or financing, says Rodriguez, so it is important to stay on top of your score. The best way to protect or increase your FICO score, she says, is to make your payments on time. "If you miss your credit card payment by one day," says Rodriguez, "your company can increase your rate to their maximum." Not only will this present a problem with that one card, cautions Rodriguez, but all your other credit cards might raise your rates as a result.

She also advises to avoid store credit cards. Store credit cards, she says, are dangerous. "They sound good when they offer you a discount in the store, but their rates are higher than bank credit cards."

If you apply for credit and get denied, Rodriguez says, write a letter asking why you were denied. Get the free copy of your report you're entitled to, and make sure there are no errors on it. If there are, write letters to the credit bureaus and to the creditor responsible for the mistake to get the errors corrected. "Don't," says Rodriguez, "under any circumstances, pay someone to correct your credit or clear your file. You can do it yourself."

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