Asset Building
for Low-Income Massachusetts Residents

Building assets -- such as a house, a car, savings, education, or job training -- is one of the most effective ways for families to get out of poverty and become financially stable. To build assets, families need financial education, asset building opportunities, and asset protection. Policy changes are a critical part of the process. Based on the findings of the state Asset Development Commission and non-profit organizations, Massachusetts is now taking steps to help low and moderate income residents overcome barriers to asset building and find economic security.

What types of assets are important for financial stability?

The Massachusetts Asset Development Commission outlines three types of assets that are important for financial stability

Financial resources such as savings accounts and retirement accounts
Material possessions of value, such as a home, a car, or a business
Non-tangible resources such as education, job training, and social networks

Having assets can help you get through financial emergencies, plan for the future, and create opportunities for your children. Assets can help you avoid eviction, get a better job, and send your children to college.

How can low-income families gain and keep assets?

To gain and keep assets, low-income families need:

Financial education to learn how to manage money
Asset building opportunities such as matched savings programs
Policy changes that remove barriers to asset building
Asset protection to keep assets safe from scams, predatory loans, etc.

How does financial education help?

Financial education teaches you how to manage your money, increase your savings, and work towards financial security. You can learn about finances by taking a financial literacy workshop or class in your community; by taking an online financial education course; or by reading about money management topics on your own.

Note To find a financial education course or information, see Financial Education.

Financial education usually includes some or all of the following topics*:

Budgets	How to use a monthly budget to keep track of what you earn, what you spend, and how much you can save
Banking	How to use a bank or credit union for your banking needs to protect your savings, establish credit, and avoid high fees
Income Tax Preparation	Where to find free tax preparation services to help you get tax credits like the Earned Income Tax Credit if you qualify. Why to avoid Refund Anticipation Loans (RALs) that charge high fees.
Loans	How to save money by avoiding high-cost financial services such as payday loans. Why you should be wary of auto dealership loans and household goods rental contracts.
Utility costs	How to lower your utility costs by applying for fuel assistance, utility discounts, and weatherization services. How to choose the lowest cost options for telephone and Internet service.
Credit cards	How to choose a credit card, keep track of how much you are paying for credit, and know your rights as a credit card holder. Where to find a reputable credit counseling agency if you need help getting out of debt.
Credit reports	Why you should check your credit reports for mistakes. How to get a free copy of your credit reports from www.AnnualCreditReport.com.
Identify theft	How to protect yourself from identity theft. How to check your credit reports and bank and credit card statements for any suspicious activity. Why you should guard your name, Social Security number, PINs, and other personal information.
Scams	How to avoid financial scams. If an offer seems “too good to be true,” it is probably a scam.
*These topics are part of Staying Afloat: Managing Your Finances in a Changing Economy, a financial education booklet prepared by The Midas Collaborative and the Massachusetts Financial Education Collaborative, two non-profit groups who promote financial education in Massachusetts.

Financial education may also include information about homeownership and mortgages, insurance, retirement planning, and other personal finance topics. Some financial education programs are for specific groups such as teens, homeowners, or retirees.

What are asset building opportunities?

Asset building opportunities help you grow your savings and other assets at a faster rate than otherwise, and allow you to invest in life-changing assets such as a home, a college education, or a small business.

Three important asset building programs are:

Matched Savings Accounts:

A matched savings account is a special savings program for people with low incomes. For every dollar that you put into a matched savings account, the program deposits one or more matching dollars into your account. You can double or triple your savings (or more) over the term of the program, which is usually one to five years.

Individual Development Accounts (IDAs) are special matched savings accounts that can be used to buy a home, pay for college, or start a small business. Other types of matched savings accounts can be used to buy other types of assets.

For more information about matched saving programs, see Individual Development Accounts.
Earned Income Credit:

The Earned Income Credit (EIC) is a tax credit for individuals and families who earn low to moderate wages, especially working families with children. The credit lowers or eliminates any taxes you owe. If the credit is more than what you owe in taxes, you can get a cash refund payment from the Internal Revenue Service (IRS).

The EIC refund payment can be thousands of dollars for families with children. The EIC refund payment can be used to buy assets, pay off debts, or for any other purpose. You can get free tax assistance to help you file your taxes and claim the Earned Income Credit.

For more information about the Earned Income Credit, see Earned Income Credit.
Family Self-Sufficiency Program:

The Family Self-Sufficiency (FSS) Program is a five-year program for families with Section 8 vouchers. For most families enrolled in the FSS program, the Public Housing Authority sets up a special FSS escrow account. If your family's income and rent share go up during the program, the PHA puts funds into the escrow account.

The money stays in the account and earns interest until you finish the program. If you successfully complete the program, you get to keep the money. You can use the money to make a down payment on a house, buy a car, pay for college, or for any other purpose.

For more information about the FSS Program, see Section 8 Family Self-Sufficiency Program.

For other asset building opportunities, see:

What policy changes are recommended?

A goal of the Massachusetts Asset Development Commission was to find ways for low and moderate income families to build assets and work their way out of poverty. The Commission recommended a broad range of policy changes. Some of those changes are:

Policy change	Recommended actions
Allow families on public assistance to build assets	Increase the asset limits; change the car value rules; make college savings plans non-countable as assets; change the lump-sum rules.
Eliminate the "cliff" effect	Make sure that working families are better off as income increases, not worse off because of income-related cuts in benefits such as health insurance, child-care vouchers, cash assistance, food assistance, or housing subsidies.
Promote education and skills building	Encourage public assistance families to use education and vocational training to meet their work requirements; allow extensions of the time limit to finish programs; make sure that graduating high school students are ready for college.
Encourage low-income families to use college savings plans	Make college savings plans non-countable assets for public assistance; lower the initial deposit requirement for the U.Plan; provide financial incentives (such as a match program) to use college savings plans; market the plans to low-income families.
Protect families from losing their assets	Protect the supply of affordable housing; protect tenants living in foreclosed properties; protect consumers from high-cost and predatory loans such as refund anticipation loans (RALs), payday loans, car title loans, rent-to-own contracts, and unsolicited loans.
Make better use of the Earned Income Credit for asset building	Increase the state EIC; promote the use of free tax preparation services to claim the credit; expand the role of tax preparation services to include financial education.
Support financial education and asset building opportunities	Promote financial education programs statewide; incorporate financial education into the K-12 curriculum; continue to support matched savings programs; train public agency staff to link financial education to other social services.
Support housing-based family self-sufficiency (FSS) programs	Expand collaborations between FSS programs and support services provided by public and private agencies; improve data collection and evaluation of FSS programs; incorporate financial education and goal-setting into FSS programs.
For the complete Asset Development Commission report, see Asset Development: Removing Barriers, Building Futures (2009).

The Massachusetts Senate and House of Representatives have approved Bills S01839 and H01858, jointly called “An Act Promoting Financial Stability and Asset Development.” This Act addresses some of the Commission’s recommendations. For details, see Senate Bill S01839 and House Bill H01858.

How can families protect their assets?

You can protect your assets from loss due to financial hardships, financial predators, and other threats in several ways:

by using reputable low-cost financial services
by insuring your assets against loss
by avoiding financial scams
by learning about consumer protection laws and regulations

Massachusetts programs and information that can help you protect your assets include:

Financial Services:
Basic Banking	Basic Banking is a low-cost banking program with low minimum deposits and low monthly fees to encourage Massachusetts residents to open bank accounts and use banking services.
VITA Free Tax Assistance	Volunteer Income Tax Assistance (VITA) sites offer free tax preparation and e-filing of your tax return. VITA sites do not charge any fees. You get to keep your entire refund check.
Tax Time Savings Bonds	Tax Time Savings Bonds make it easy for you to invest a part of your tax refund in U.S. Savings bonds when you file your taxes. The bonds are safe and earn interest. The minimum investment is $50.
Credit Counseling Services	Credit counseling programs give free advice to people who are in debt or have questions about their finances. People who need help paying off their debts can enroll in a low-cost debt management plan.
More Than Wheels Car Buying Program	More Than Wheels is a non-profit organization that teaches you about money management, then negotiates with dealers to get you the best car price and best loan on a new or nearly new car.
Homebuyer & Homeowner Programs	Soft Second Loans, MassHousing loans, Section 8 Homeownership, Habitat for Humanity, and other reliable homebuyer and homeowner programs are trusted ways to buy a home.
Foreclosure Prevention Counseling	Foreclosure prevention counseling is a free service for Massachusetts homeowners who are having trouble with their house loans. Counselors review your mortgage and finances with you, discuss your options, and help you find a solution that is best for you. There is no charge.

Insurance and Protections:
Unemployment Insurance	Unemployment insurance is a government program that gives you temporary cash payments if you lose your job through no fault of your own. Most Massachusetts workers are covered. You must file a claim to get benefits.
LifeBridge Life Insurance Program	LifeBridge is a free life insurance program that pays $50,000 to a trust for your children if you should die before your children finish their education. The trust is for educational expenses only. You must meet income, age, and other eligibility requirements.
Homestead Act	The Homestead Act protects you from losing your home to creditors because of unsecured debts such as credit card debt. Automatic protection is $125,000 of equity. You can increase the protection by filing a Declaration of Homestead.
Tenant Rights After Foreclosure	If you are a tenant and the building in which you are living is sold at foreclosure, you have certain rights under Massachusetts and federal law. Regardless of the new owner's plans for the building, the owner cannot violate your rights.
Medical Hardship: Health Safety Net	If you have a medical hardship, the Health Safety Net will pay for all eligible medical expenses that are beyond your ability to pay. You qualify for Medical Hardship if your family's allowed medical bills are higher than a specified percentage of your family's income.

Financial Scams:
Scams and Identity Theft	The Attorney General's office suggests steps you can take to protect yourself from scams and what to do if you are a victim.
Do Not Call Registry	You can stop calls from telemarketers if you sign up for the Massachusetts Do Not Call Registry and the National Do Not Call Registry. It is illegal for a telemarketer to call you if you have asked not to be called
Consumer Advisories	Consumer advisories warn Massachusetts residents of current frauds and scams such as tax-related scams, credit card scams, financial aid scams, loan modification scams, and more.

Consumer Protections and Laws:
Consumer Protection Laws	The Office of Consumer Affairs web site includes laws about buying and selling a car or house, banking and credit cards, shopping and e-commerce, and other consumer protection laws. The site also includes Consumer Legal Resources if you need to take legal action to protect your rights.
Legal Services Programs	Legal Services programs give free legal help to low-income and elderly Massachusetts residents for non-criminal matters, including consumer fraud.

Useful links

These links are external links to web sites that are not part of MassResources.org. When you click on these links, you will leave our site. Click "Back" on your browser to return.

The Midas Collaborative
Statewide network of non-profit organizations that help Massachusetts residents build and protect assets to achieve economic stability.
MassSaves
Web site of the Massachusetts Financial Education Collaborative, whose goal is to make financial education and information available to all Massachusetts residents.
Massachusetts Asset Development Commission
Background, mission, reports, and links to resources regarding the Asset Development Commission.
Massachusetts Office of Consumer Affairs and Business Regulation
Massachusetts government office whose job is to protect consumers through advocacy and education.
Office of the Attorney General of Massachusetts
Resources for Massachusetts residents regarding consumer protection, fraud, civil rights, health care, insurance issues, and other legal issues.

Asset building topics

For information about specific asset building topics, follow the link(s) below:

Investing Money

Investing money in savings accounts, stocks and bonds, gold, real estate, or other types of investments can help you build your financial assets. To invest sensibly, you ought to understand some basic concepts about investing.

Special Topics of Interest to Massachusetts Residents

Asset Building for Low-Income Massachusetts Residents