ALBANY, N.Y. – A new brief recommends changes in federal policies that would help low-income families save for their children’s futures. “Investing in Tomorrow” by the Annie E Casey Foundation, says even modest savings could improve the economic futures of millions of families.
And according to Beadsie Woo, senior associate at the Casey Foundation, there are commonsense federal policies that can create more opportunities for families to save.
“And those change the life course for their children,” says Woo. “Children whose families can save will do better in school and have stronger outcomes through access to opportunities.”
Those policies include creating universal savings accounts from birth seeded by small amounts of federal money, and increasing access to the federal My Retirement Account, or MyRA, program.
And Woo points out that expanding access to the Family Self-Sufficiency, or FSS, program could even help some low income families purchase a home.
“HUD’s Family Self-Sufficiency Program provides a way for those families who are currently receiving assistance in their housing costs to begin to save, and increase their earnings,” says Woo.
The brief notes that while some 3 million people are eligible, only about $70,000 are currently benefiting from FSS.
On the state level Woo says New York is one of 15 states taking advantage of Federal legislation that allows financial institutions to encourage people to save by linking chances to win cash prizes to deposits.
“Saving both for short-term emergencies, but also saving for long-term aspirations like post-secondary education, or chances that will change their kids’ lives,” says Woo.
The brief says helping families save will help close a persistent racial gap in net worth that has grown substantially wider since the end of the recession.
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