What is matched savings?
Matched Savings, also known as Individual Development Accounts (IDAs), is a type of asset-development program.
More well-known anti-poverty programs like SNAP and TANF focus on stabilizing income to meet current or short-term needs, while asset development programs are future-focused to help participants to experience upward economic mobility, strengthen financial security and build wealth over time.
Examples of assets are endless. They include bank savings accounts, which is the focus of this bill. But assets also include financial investments (e.g., stocks, bonds and mutual funds), real estate, personal property (e.g., a car), retirement account (e.g., 401Ks) and pensions. From an anti-poverty lens, the idea is that by accumulating and having assets, individuals will have sufficient money to pay off their debts and sustain their current lifestyle.
Assets are more than an accounting term. For many people, it gives a feeling of being secure. Assets give people peace of mind.
What is the bill?
Sponsored by Senator Eldridge and Representative Fluker-Reid, S.737; H.1158, will create a state funded matched savings program.
The bill will create a program, which will be available to people who are below 80% area median income. Participants will be entered into a program where they will be able to build savings with their contributions matched up to 4:1.
The cornerstone of the bill is that it empowers participants to make their own financial decisions. After graduating, participants can use their savings on a wide range of wealth building activities, including, a down payment on a home, higher education for themselves or a dependent, and running a small business.
Additionally, participants will be enrolled in financial coaching sessions while in the program; giving participants the skills and financial know how to continue saving post graduation.
The Matched Savings bill has been reported out favorably from to the Joint Committee on Financial Services, S.737; H.1158. This milestone marks the first time the bill has received a favorable report by the committee. The coalition is advocating with both Senate and House leadership to move the bill to a floor vote. If you want to support this effort, sign-up for United Way of Massachusetts Bay policy alerts below.
Matched Savings Program: Participant Stories
