Investing in Tomorrow: Helping Families Build Savings and Assets

For a low-income family, a day's wages might only fulfill today's basic needs: food, clothing and housing that may be temporary. But some families' daily struggle to support themselves leaves nothing for tomorrow. To help children realize their full potential, families need savings and assets, the currency of the future.Assets -- emergency savings, a college fund, homeownership -- provide the financial stability a family needs to create a quilt of resources that turns children's dreams into plans. That quilt also serves as a security blanket of a family's own making. Without it, what should be a temporary difficulty -- a flat tire, a sick child, an injury -- can become a crisis with permanent consequences, including a lost job or impossibly large debts. Family financial stability can easily be undermined by such events, eroding prospects for self-sufficiency and long-term success.The Great Recession was devastating for U.S. families, causing a collective $16 trillion loss in net worth. This loss disproportionately affected low-income families of color, perpetuating a racial wealth gap even as the racial income gap has narrowed. The median net worth of white households was more than 10 times greater than that of African-American or Latino families in 2013. While white families' net worth rose by 2% from 2010 to 2013, Latino and African-American families' net worth fell markedly -- by 15% and 34%, respectively. The typical white household has slightly more than one month's income in easily accessible savings, compared with just 12 days for the typical Latino household and only five for the typical African-American household. These dramatic differences are especially troubling given the critical importance of assets as an engine of the American Dream -- a dream that is, increasingly, unequally achieved