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Training and Small Business Development
© 2006 Acre Family Day Care
Updated April 27, 2007
Something they can bank on: 20 people graduate from city program that provides money, skills
by Jason Lefferts, Sun Staff
Lowell Sun
November 14, 2000
Lowell -- Maria Lopez has a steady job, but with five kids, the thought of saving money has been something of an unreasonable goal.
In the last year, however, she has tucked away about $1,200 through the Individual Development Account Program operated by Acre Family Day Care. Along with that money, Lopez has also been able to bank on some new financial skills that she has learned through the program.
The program drops $3 into Lopez's account for each of the $25 she saves each month. She also takes classes that teach her ways to save money and stretch her dollar, snowballing her saving potential.
"The way I see it, I'm being paid by the hour, and you get a business mind out of it," Lopez said of the classes. "It really reinforced that the things I tried to do were really helping. Sometimes you have doubts because you don't know if you're doing the right thing, but I was."
Lopez is about halfway through her two-year program, and on Thursday the IDA Program graduates its first 20 members. Part of the first IDA program in the state (there are now five), the people leaving the program are using the money to buy homes, fix existing homes, pay for education or make improvements to their businesses.
The program demands that participants save at least $25 a month, and up to $75 a month in matching funds is put into a savings account at Enterprise Bank. The money can be spent only on the handful of uses this year's graduates have targeted.
At the same time, participants are learning new financial skills. In some cases, they have not had a checking or savings account in the past, and were burdened by poor spending habits, such as buying lottery tickets, buying lunch every day, or entering pricey rent-to-own agreements for furniture or appliances.
"It's easy to focus on how much was saved, but also the financial education is equally, if not more, important," said Anita Moeller, the executive director of Acre Family Day Care. "Hopefully, they'll maintain their skills in the future and teach their children."
One of the benefits of the program, Lopez said, is that the money is off-limits until the participants graduate. In an iron-clad lockbox that would make Al Gore jealous, withdrawals need to be approved by both IDA personnel and the participants, and checks for the final use of the money are sent directly for payment.
"It's unreachable," Lopez said. "I think that's one of the good things about it. It really takes it off their minds. I know it's safe and that I'm not giving my money to some company."
Along with the peace of mind comes some financial confidence, said Zelma Khadar, director of the program.
Khadar said there are 48 people in the program, and they have saved a total of $73,000. The most recent additions to the IDA project have come from Lowell High School, where students from the Upward Bound program have started to save and learn.
"You see them make positive changes in their lives and save some money on their own," Khadar said. "It's hard for me to explain it. When talking to the participants, you get a sense of the strides they have made. It's just a sense of accomplishment."
The first IDA participants came from the Family Day Care program, targeting people who run day care out of their homes. Three graduates are buying new homes, three are reinvesting in their business, one is renovating a home, and six are paying for education. The other seven are keeping the account open with a goal of saving more money.
Lopez said she does not know what she is going to do with her money when she completes the program. Two of her children are already in college, and the other three are nearing college age. She may use the money, she said, to pay for some of their education.
Khadar wants to add more people to the program, but she needs more funding. A handful of local agencies has given money, but IDA won't add participants unless money is already available. The Lowell project and the other IDA programs in the state will push the state Legislature next year to supply the matching funds needed to become eligible for federal money.
Moeller said one of the goals of the program is to give its participants some fiscal flexibility. The 20 people who leave the program Thursday will be moving on after being given an opportunity they normally wouldn't have, Moeller said.
"They don't see matching funds that people in other, higher-income classes see, like 401K's," Moeller said. "It's a group that's trying to get the big-picture look of people moving out of difficult situations."