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Helping Families Save to Help Children Succeed

Family assets, including college savings, correlate to indicators of children's well-being. (Maryland GovPics/Wikimedia Commons)
Family assets, including college savings, correlate to indicators of children's well-being. (Maryland GovPics/Wikimedia Commons)
January 20, 2016

BALTIMORE - A new brief recommends changes in federal policies that would help low-income families save for their children's futures.

According to "Investing in Tomorrow" by the Annie E Casey Foundation, even modest savings could improve the economic futures of millions of families. Beadsie Woo, senior associate at the foundation's Center for Community and Economic Opportunity, said common-sense federal policies can create more opportunities for families to save.

"Those change the life course for their children," she said. "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. Woo said expanding access to the federal Department of Housing and Urban Development's Family Self-Sufficiency Program even could 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," she said.

The brief noted that while some 3 million people are eligible, only about 70,000 currently are benefiting from FSS.

On the state level, Woo said Maryland 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," she said.

The brief said helping families save will help close a persistent racial gap in net worth that has grown substantially wider since the end of the recession.

The report is online at aecf.org.

Andrea Sears, Public News Service - MD