Advocate for working families

A couple of weeks ago the U.S. Department of Health and Human Services (HHS) announced that Individual Development Accounts (IDAs) are successful at encouraging savings, building assets and moving low-income families into the financial mainstream. In fact, two significant studies highlight the ability of matched savings accounts to help low-income working families save, buy homes, pursue post-secondary education, and start businesses. More info here.

Through our “Funding Futures” initiative, United Way of Massachusetts Bay and Merrimack Valley is helping lower income families establish IDAs to match their savings toward the purchase of a home, post-secondary education or capitalization of a business. Since March 2007 over 75 individuals have enrolled and are saving a minimum of $25.00 a month. Enrollees, who are recruited by eight community organizations, must participate in Financial Education sessions on topics such as credit, banking, investing, budgeting, saving and more before they complete their savings and make their purchases. I've attached a PDF to this post on how matched savings work.

Characteristics of “Funding Futures” savers are similar to participants in programs nationwide. Data shows that in Greater Boston as well as across the United States:

• 75% of IDA savers are women;
• over 50% of them are single.
• Locally, most are 20-29 years of age compared to the nationwide age range of 30-39.
• In Greater Boston, the highest level of education attained by most savers is ‘some college’ while nationwide it’s high school graduation.

Call to Action
Share the success of IDAs with your legislators. Specifically request that they cosponsor S. 871/H.R. 1514, The Savings for Working Families Act (SWFA). At 900,000 accounts, SWFA would represent a thirteen-fold increase in savings incentives for low-income people. If enacted, the bill would provide Congress with an opportunity to address the country's negative savings rate and growing wealth gap.

Click here to send a letter to your Senators

Click here to send a letter to your Representative, requesting that they co-sponsor legislation that will build upon the success of matched savings.

You can also call your Legislator's office through the Capitol Switchboard at: (202) 224-3121.