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Encouraging the Working Poor to Save

By JLP | January 12, 2006

There was an interesting article by Jackie Calmes in yesterday’s Wall Street Journal titled New Programs Spur Working Poor to Begin Saving (free). I’m all for that! I like programs that actually help people better their lives rather than just give them something.

According to the article, the new programs match the participant’s savings but only if they consistently save and agree to attend financial planning classes. FINALLY! I would love to volunteer to teach financial planning classes. Maybe I should find out about any local programs and volunteer my services.

One of the obstacles to getting the working poor to save has been the fact that households with $2,000 or more in assets, including retirement plans, are ineligible for basic welfare programs.

It is an interesting article. I urge EVERYONE to read it.

Topics: Miscellaneous | 6 Comments »


6 Responses to “Encouraging the Working Poor to Save”

  1. Samerwriter » Blog Archive » WSJ.com - New Programs Spur Working Poor To Begin Saving Says:
    January 12th, 2006 at 11:06 am

    […] I got a link to this article from AllThingsFinancial. It’s a good read, about the difficulty of saving money for those with low-income and the disincentives to save caused by the welfare system. Basically the article advocates a program that matches the savings of lower-income participants in retirement savings programs. I like that. […]

  2. samerwriter Says:
    January 12th, 2006 at 11:11 am

    That’s a great article, and I like the idea. I’d much rather see my tax money going toward this type of program than other entitlement programs.

    I’m not sure I like the implication from the article that Ms. Hughes will be using the savings and matched savings for a downpayment on a house. $4,500 is a great start, but in my opinion home ownership should come after she’s got her finances straightened out, including a reasonable emergency account (a few thousand dollars would be a good start) and retirement savings.

    And for Ms. Hughes, I’d think it might be terribly discouraging to go from $4500 in savings to a $84000 mortgage.

  3. monkeyjoe Says:
    January 12th, 2006 at 6:25 pm

    Anyone who is interested in teaching personal finance classes can do so at the grade and high school levels through Junior Achivement (www.ja.org)

  4. fivecentnickel.com Says:
    January 13th, 2006 at 9:28 am

    Weekly Roundup – 01/13/06

    Happy Friday the 13th! Here are some of the best posts that I ran across over the past week.

  5. Consumerism Commentary Says:
    January 13th, 2006 at 10:42 am

    Best Of The Week

    Here are some posts from other bloggers that I have enjoyed this week: JLP talks about new savings programs for the working poor. Many of the working poor are inelgible for welfare, so these programs encourage them to create savings. Five Cent Nickel e…

  6. New York Bankruptcy and Consumer Law Blog Says:
    January 18th, 2006 at 7:13 am

    Tax Savings Plans For The Working Poor

    I picked up a story on the All Things Financial Blog discussing a Wall Street Journal article by titled New Programs Spur Working Poor to Begin Saving.According to the article, the new programs match the participant¬ís savings but only if they consiste…

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