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TESS VIGELAND: Saving money is not easy. And that goes double when you earn so little money that there's barely enough for the essentials.
Last year, New York City started a program to encourage low income residents to save.
And guess what? It's working.
Marketplace's Alisa Roth reports on the first anniversary of "Save NYC."
Alisa Roth: The program is aimed at New Yorkers like Carmen Lopez. She has a full-time job as a home health aide, taking care of an older woman in Brooklyn. She took time out of her lunch break to talk to me.
You do the math and you realize she doesn't have anything extra.
Carmen Lopez: Since they take taxes out, I think I take home $260 a week. It's not a lot.
No. It's just over a thousand dollars a month. Take out $633 for the rent, plus the electric bill, cable, and well . . . you get the idea.
She knows she should have a little cushion.
Lopez: You know, the light bill is not going to wait for you to get a paycheck. They're going to cut you off. They don't wait.
So she was excited when the city offered to pay her 50 cents for every dollar she put into a savings account. That's the point: to see if people like Lopez can be convinced to save, even if there's nothing to spare.
This is how it works: The city got banks to set up special savings accounts. Low-income New Yorkers were encouraged to deposit some or all of their income tax refunds. And the city pays up to $250 in matching funds.
For a lot of the participants, this was their first bank account.
Jonathan Mintz is in charge of the Department of Consumer Affairs, the office that oversees the program.
Jonathan Mintz: When given the right opportunity and given a safe product, even those with very low incomes can and will save money.
Different cities have been trying all kinds of incentives, so everything from setting up automatic deductions from paychecks to sending text messages to remind people to save. New York already expanded the program once. And Mintz, the commissioner, says he'd eventually like to see it tried on a national scale.
There are obviously questions about how cost-effective these programs, so how much are people saving versus how much it costs to get them to save. And it seems like nobody's sure yet what works or for how long. Plus, let's be realistic here, saving a couple of hundred dollars a year isn't going to make anybody rich.
But it can make a big difference in somebody's life. Peter Tufano is a professor at Harvard Business School. And he says it can mean having enough the money to fix your car when it breaks down.
Peter Tufano: Fixing your car may seem like a trivial thing to do. If by failing to fix your car you lose your job, the economic ramifications of it are pretty big.
As for Lopez, she put $500 into the account. With the matching funds and interest, she'll get an extra $260. And she plans to do it again next year.
In New York, I'm Alisa Roth for Marketplace Money.