Social-Support System Discourages People From Saving Money

To the Editor:

As a mother with a master’s degree who has lived near, at, or below the poverty line since having children and choosing to stay home with them, I chuckled when I read “A Saving Grace for the Poor” by Paul Demko (September 10).

I have two children, ages 5 and 3, the youngest of whom is challenged with mild to moderate delays in all areas of development. Our financial status has been made even worse by my husband’s having sustained a back injury on his job 1 1/2 years ago and the worker’s-compensation company arguing that the injury is not “really work-related” and stopping the worker’s-compensation checks. Now, instead of just reading about poverty or seeing it, I am in it.

People are wondering why the poor do not take more advantage of these new individual development accounts, and some excellent reasons are suggested: even $10 seems like a big amount of money, and many fear being ripped off. But I would also like to suggest another reason why people who are poor are reluctant to sign up.

When you are poor you are always on the lookout for ways to provide for your family, and so if you are smart you apply for any assistance available to you. In the past few years we have applied for and/or used: our local food pantry; the Women, Infants and Children program; fuel assistance; local clothing exchanges; vouchers for preschool; yard sales; Supplemental Security Income for our son; COBRA and our state-supplied health insurance; Habitat for Humanity; and discounts on our gas, electric, and telephone bills. I know that others experiencing poverty also get food stamps, vouchers for child care, welfare (transitional assistance), subsidized housing, etc.

In almost every case there is a lot of paperwork to fill out and sign, and all agencies are trying to hold people accountable and to keep cheating down to a minimum — and there is almost always a cap on the amount you are allowed to have in savings.

To have savings means you don’t really need help. The whole system is set up to discourage savings. You can’t risk your other sources of assistance to begin a little savings account.

The second reason people aren’t quick to sign up, I believe, is because they don’t have hope. I had always been able to maintain my sense of hope until last year. When my husband was not getting any better month after month and I could not leave my two sons with him to get a job myself, I actually began to think that things would never get better, that this hole would just keep getting deeper.

And so then, without any hope that one day things would get better, what would be the point of saving? I was raised in a family that is strongly pro-savings, so can you imagine how much more quickly others might reach that breaking point.

Carol Holt
Quincy, Mass.