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."
There are two problems with getting low-income workers to save, experts note.
The first is that they simply feel that they can't afford it. The second is that, because they don't have savings, relatively small upsets — a car repair or an illness that keeps them from work for even a few days — can push them into high-cost borrowing and unravel their financial lives.
Williams, for example, was earning about $14,000 annually and felt there was no way she could save because she was spending every dollar on basics: rent, food, car payments and tolls to get across the bridge into San Francisco.
"A week after I got my paycheck, I needed to borrow money," Williams said.
But during the mandatory counseling with the EARN program, Williams discovered an array of government and social assistance programs that could help defray some of her expenses, including her rent. She also got coaching on how to set aside money in advance for regular expenses, like the $50 she spent each month on tolls.
She says she's now using her money so effectively that she's able to donate a small amount each month to her daughter's school in addition to saving for her business.
Her goal: save another $2,000, which the EARN program will match with $4,000. That should help create some economic cushion for Williams to identify potential customers for the business she plans to launch later this summer, which will connect aged and disabled people with the health services they need.
"It's a work in progress," she says. "I'm hoping to launch in August, but I'm waiting for licensing and Department of Justice clearances … and I'd like to have a few clients signed up."
How can you find an Individual Development Account program? The Corporation for Enterprise Development in Washington maintains a listing of IDA programs offered in every state on its website, http://www.cfed.org, but each program has different criteria and makes different promises. In Southern California there are more than a dozen IDA-type programs available.
Some match savings on a dollar-for-dollar basis; others provide more generous matching grants, depending on your savings goal.
You have to call each program to find out if you qualify. Eligibility standards typically are based on where you live and how much you earn. Some also only provide money to those saving for a specific goal, such as homeownership, while others will provide matching grants for education and business start-ups.
Williams' message: If she can do it, so can you.
"I've learned to live off about 70% of what I earn, rather than 100%," she said. "No matter what you have, it's manageable if you utilize your resources properly."