Dametria Williams started her financial life as a statistic — a poor single mom, just like her mother and grandmother before her.
But the San Francisco healthcare worker decided to break the cycle of poverty. Now the 38-year-old is a college graduate on the cusp of opening her own business. She is also raising a high-achieving teenager who is in position to win merit-based college scholarships.
She attributes her life’s 180-degree turn to two things: a new attitude and a savings account with matching funds provided to low-income participants.
"I used to walk through the world thinking there is never enough," she said. "There is not enough money, there is not enough food, there is not enough time.
"When you are in the mind-set of thinking there is not enough, you aren’t even looking for help. But when you realize that there is enough — that money is a manageable tool — you start to see what help is available to you."
The key for Williams was a so-called Individual Development Account, which funded tutoring for her daughter and is now helping Williams save for her business.
Unfortunately, IDAs like the one Williams discovered may be among the best-kept secrets in finance. These amazing accounts, offered in every state, help low-income workers set aside money for education, a first home or starting a business.
But they’re frequently overlooked because the programs are neither standardized nor offered on a national basis. Instead, they’re provided through a patchwork of local groups and charities, each of which may have different rules on who can qualify for help and what kind of help they can receive.
What they all have in common is a belief that anyone can break the cycle of poverty, regardless of how little they earn, through savings.
But it’s tough to save when you’re not good at money management and have little inspiration because your savings seem to grow so slowly. The solution: Link money management classes with the ability to earn a matching amount of savings that can boost the money in your account by as much as $3 for every $1 you set aside. Every program handles the matching differently.
That’s exactly what Williams got when she opened accounts with San Francisco-based Earned Assets Resource Network, better known as EARN.
She saved $500; EARN matched her threefold with $1,500. The combination was enough to pay for eight months of tutoring, which was the leg up her daughter needed to put her on a scholarship track.
"We talk a lot about the numbers," said Ben Mangan, president and chief executive of EARN, a San Francisco-based nonprofit organization. "But the most important thing that we see is the profound effect this has on individual people’s lives and their behavior."