Saving for a Rural Snowy Day

MAINE — In the dog days of summer, it’s hard to think about winter, let alone sky-high home heating costs. But low-income rural families in southwest Maine can’t start saving early enough in their Rainy Day Savings Account – a matched savings account that they can use to save up for emergency expenses like an unaffordable winter heating bill.

Maine Centers for Women, Work & CommunityCostly home heating “is a big issue here,” says Janet Smith, of the Maine Centers for Women, Work & Community (WWC) office in the Franklin County seat of Farmington. “There’s a lot of older housing stock in our rural county that might not be weatherized and we have pretty cold winters. People have a hard time having enough funding to make it through.”

WWC has tailored a widely-used tool – matched savings – to the specific needs of their counties’ residents. Unlike Individual Development Accounts (IDAs) – which are used to save for a specific asset such as a home purchase or a college education – the Rainy Day Savings Accounts are more flexible. The accounts can be used for any emergency – for example, to repair a car needed to get to work or school, to pay rent or a mortgage in a tough month, to cover unanticipated school activity costs for children, or to pay the monthly bill for heat, water or another essential utility in the case of lowered income due to a job loss, short-term disability, or reduced work hours.

QUIZ! Adequate Emergency Savings?

What percent of households in the United States lack sufficient “liquid assets” to subsist at the poverty level for three months in the absence of income?

15%… 25%… 35%… 45%?

Scroll down to see the answer!

“Emergencies happen in all our lives. How do we create some basic financial security in the face of that knowledge?” says Laurie McDonnell, also of WWC.  “If you can have a little nest egg, you’re going to have less financial stress.”

In Maine, saving for the potential high cost of winter heating is emergency saving that makes sense. Rural residents – especially in the severe winter regions of the Northeast and Midwest – report the highest rate of energy assistance from government programs. But government funding shortfalls and narrow eligibility rules leave too many out in the cold.

Emergency Savings for Low-Income Families: The Maine Way

WWC’s emergency savings accounts encourage families to set aside $20 to $50 per month in a no-fee account. They receive a dollar-to-dollar match, funded by private donors, to build savings up to $600 over a six-month to two-year period.

dollarsA Rainy Day participant saving to pay for an emergency must meet specific income guidelines and complete a 15-hour money management training. Rainy Day participants are not required to have earned income, which broadens the program’s eligibility to include people who, say, receive public assistance or social security. Savers also have access to WWC’s other programs, including job search, career planning, and small business counseling that can change “people’s lives and move them to increased self-sufficiency.”  Overall, there are fewer barriers to participation than an IDA, and plenty of incentives and benefits.

WWC raised their own match funds to create the Rainy Day Savings Account option. In Lewiston, WWC partnered with Maine-based Frances Hollis Brain Foundation to provide the match and Androscoggin Bank as a banking partner to hold the accounts. Smith notes that the program was initially a harder sell for private donors and banks but that the investment pays off in the end. “We helped them see that we are building on a successful IDA program, and that this emergency savings program provides more intensive programming and support – money management education and developing a savings habit,” says Smith.

Results: Working, Popular and Spreading

Nine Lewiston Rainy Day accounts have been opened – and one has already been put to use for an emergency, by a non-traditional student to pay for emergency dental care. He has since been approved to open an education IDA, which shows that starting the small-savings habit for emergencies can lead to continued savings and asset building!

Lewiston participants range in age from their late 20’s to early 70’s. All are single, eight are female, four have school-age children, two are retired, and one is Somali.  What they share, says McDonnell, is a desire to save in case of an emergency, something that “people are more aware of” in the wake of the recent recession. This suggests that the emergency savings opportunity can likely appeal across the board with any population in any kind of rural community.

In fact, this summer, WWC’s program added two sites – Franklin County and the Bath-Brunswick area. WWC secured funding from the United Way to provide the match. Bath Savings is the banking partner in the Bath-Brunswick area and a partner is still being sought for Franklin County.

Quiz Answer

What percent of households in the United States lack sufficient “liquid assets” to subsist at the poverty level for three months in the absence of income?


Surprised?  Well, with that knowledge, help rural low-income families save up to handle such emergencies. Learn more about insufficient emergency savings in CFED’s 2013 Assets and Opportunity Scorecard. Download the scorecard here:

Do It Yourself: Rainy Day Savings Account Resources

Want to move this relatively simple RuFES idea forward in your rural community?  Here’s help:

  • Maine Centers for Women, Work & Community provides information on its Rainy Day Savings Accounts. See: or contact Janet Smith at 207-778-2757.
  • Learn about another model for matched emergency savings: Start2Save in San Jose, CA. Watch this video. Read more at the Opportunity Fund’s website.

Sources for this Alert

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RuFES is a project of the Annie E. Casey Foundation and the Aspen Institute Community Strategies Group.
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