Posted by Mike Smith :: October 3, 2008 @ 8:42 am

At times, it can be difficult to save money. All too often we feel that we have enough trouble just staying afloat, let alone trying to get ahead. Seeing others find success can provide the inspiration we need, particularly when they are even worse off financially than we are.

That’s exactly what I took away from reading about low-income families saving nearly 5% of their income as part of a non-profit program based in San Francisco. The program is offered by the non-profit Earn, and it couples financial education with incentive matching towards a specific savings goal. For each dollar saved by participants, up to $2,000, Earn adds another $2. One dollar of the match comes from a government program and another comes from Earn itself. The money is held in an Individual Development Account, which can only be used for the specified savings goal, such as paying off credit card debt.

While programs like this are certainly worth our attention on their own merits, they also show us that anyone can save a significant portion of their own income. You might think that the 2-for-1 matching is the incentive for program participants, but nonetheless you must credit these savers for making do without nearly 5% of their income. With an average household income of about $18,000, every penny counts. Yet they are still able to save.

The financial education aspect of the program is also something that you are capable of achieving. Reading the Lending Club blog, personal finance books from the library and other Internet resources can all go a long way towards advancing your financial education. Setting a specific savings goal will also help your cause. Unless you qualify for such a worthy program like Earn’s, your savings will be just what you yourself are able to save. Nonetheless, seeing low income families saving 5% of their own money hopefully makes you realize that you could probably do the same.