INDEPENDENCE WAY:

Special savings accounts can help break cycle of poverty: Programs in every state provide matching funds for the poor who put money away for expenses such as education, a home purchase or starting a business. (Kathy M. Kristof, July 4, 2010, LA Times)

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.