Individual Development Accounts (IDAs)
Assets are the building blocks of long-term financial stability and success for people of all income levels. Yet building assets - and achieving a life goal like buying a home, pursuing a college education, starting a business, and securing a nest-egg for retirement may feel out of reach for people who struggle to pay basic expenses each month.
AAA Fair Credit Foundation (FCF) seeks to change this cycle of financial insecurity by creating opportunities for people to accumulate, leverage and preserve their assets. The Utah Individual Development Account Network (UIDAN) is a statewide collaborative program managed and administered by FCF. UIDAN is an asset-building strategy and multi-faceted financial education program gives working low-to-moderate income individuals and families the opportunity, incentive and institutional support necessary to save for and acquire 1 of 4 productive assets that promise a higher income, and the ability to sustain themselves in the financial mainstream.
Individual Development Accounts (IDAs) accounts are matched savings accounts designed to help people invest in assets that will become more valuable in the future. IDA participant savings and the matching dollars they receive can only be used towards specific assets such as (i) Home ownership; (ii) Post-secondary education and training; (iii) Developing or growing a small business; or (iv) Assistive technology devices.
All IDA participants must attend 8-10 hours of financial management training prior to application. The curriculum includes: budget development; money management including financial institutions, keeping financial records and basic investing; the wise use of credit and consumer education. In addition all participants must attend asset specific training to prepare them for their asset purchase. Participants receive on-going financial coaching which includes annual review of their budget and financial documents and are encouraged to attend additional financial education workshops offered by FCF.
Save - Learn - Earn - Invest are the foundational tenants of the program. The match incentive - similar to an employer match for 401(k) contributions - is provided through a variety of government, public and private sector sources.
Save Steady. Dream Huge
According to the Center for Enterprise Development (CFED), every public dollar invested in IDA's generates $5 for the community. This is measured in new business and job creation, increased earning and educational achievements, new homes and improved neighborhoods, higher tax receipts and reduced welfare expenditures.
Assets provide benefits that income alone cannot offer. People with assets have more options in life and can pass on status and opportunities for future generations. Broadening the ownership of assets through IDAs is one way to help low-income working families move out of poverty, giving them a "leg-up" to enter the financial mainstream.