By Chris Thomas
Washington News Service

SEATTLE – Every penny counts when you’re raising a family, and a new policy brief says the federal government could be doing more to help people sock money away for emergencies, college and retirement savings.

The Annie E. Casey Foundation research says families should be able to have modest savings and still qualify for public assistance. It says retirement savings and moving people toward home ownership should be priorities so more families can have secure futures.

Beadsie Woo, senior associate with the Casey Foundation, says helping parents build their assets has longer-term benefits for their children.

“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.”

The policy brief says Washington and other states that have increased the asset limits for public benefits have not seen an increase in participation.

It also makes the case that, without savings, too many low-income families rely on expensive payday loans that compromise their chances of financial stability.

One big idea the Casey Foundation proposes is a federal savings account set up for every child at birth, with a “starter” amount of a few hundred dollars. A family could add to the account over the years, to be spent on the child’s college or job training, starting a business or buying a home. Woo says for children in lower-income households, just the ability to save is a game-changer.

“The opportunity to save changes the way that children think about their future,” says Woo. “Research shows that children that have modest savings in their own name are more likely to go to college than those who do not.”

The policy brief notes many families still haven’t recovered from the Great Recession.

It says between 2010 and 2013, white families’ net worth rose by two percent. Latino families saw a net-worth drop of 15 percent, and African-American families saw a 34 percent drop.