Asset building enhances the growth of financial resources, creates a financial foundation and results in stable futures for many low-income families in the United States. With a significant degree of wealth inequality in the United States among low-income, minority populations, asset building can improve the financial, psychological and social wellbeing for these populations. Possession of assets is associated with economic stability for a household, a decrease in residential mobility, an increase in property maintenance, encouraging long-term planning among individuals, an increase in personal efficacy and creating a sense of social connectedness.
One of the most valuable financial assets in the United States is a retirement account; however only 10% of families in the lowest income quintile (families earning less than $18,500) have such savings and with amounts much lower than the average American family. On average, for a family in the bottom fifth, debt is greater than 40% of income. Lack of assets also affects the financial future of our nation’s children. The intergenerational impacts of poverty are too important to ignore—42% of sons born to a father in the lowest income quintile remain in the bottom fifth when they grow up.1
The relationship between financial stability of families and its impact on children is obvious: lack of financial resources results in fewer opportunities for children to engage in social and academic settings. In sum, policymakers should focus legislative efforts on asset building in their respective states to assist low-income families “save” their way out of poverty.
In 2008, the Family Economic Success Task Force recommended that states
should enact policies that allow families to earn an adequate level of income and benefits to build financial assets. States should require K-12 financial literacy programs in schools, and promote financial and job training, workforce development, affordable housing, and access to higher education for adults. Federal, state, and local governments should consider support for tax policies that minimize the burden on low-income families as they work their way out of poverty.
 Asset Building and Low-Income Families, edited by Signe-Mary McKernan and Michael Sherraden, Urban Institute Press, 2008. Unless otherwise indicated, all statistics are for 2004.
According to the U.S. Department of Health and Human Services, a quarter of American households are "asset poor," meaning the individuals and families have insufficient financial resources to support them at the poverty level for three months (during a suspension of income).
Asset poverty affects children at a disproportionately greater rate. Forty-seven percent of all American children live in households with no net financial assets. Rates for racial and ethnic minorities and minority children in the United States are even more severe.
Research shows that families with assets:
demonstrate an orientation toward the future
demonstrate a decrease in marriage dissolution
demonstrate an improved housing stability
experience improved health and well-being
experience increased civic and community involvement
experience decreased rates of transfer of poverty to the next generation2
 U.S. Department of Health and Human Services, Office of Community Services, Asset Building, http://www.acf.hhs.gov/programs/ocs/afi/about.html
Families in low-income areas are often the most vulnerable to exploitative market practices. In order to offset these exploitative market practices, financial literacy and empowerment can assist low-income families in securing a stable financial future. Families can increase their personal savings and investments through fair and effective financial management. Financial literacy empowers families to take control of their financial futures and gives low-income families the tools to establish or improve their financial credit, educate themselves about financial planning, improve their financial status through proper savings and investments, and contribute to personal and community financial growth.
Laura Beavers Speer, an Associate Director with the Annie E. Casey Foundation, and Melissa Boteach, the Director of the Half in Ten and Poverty & Prosperity Program for the Center for American Progress Action Fund, were featured speakers at Women In Government's 19th Annual State Directors’ Conference and Tenth Biennial First Term Legislators’ Conference. They both work to build the political and public will to reduce poverty by creating good jobs, strengthening families, and promoting economic security, and talked to legislators about we can do to promote those goals. Ms. Speer gave her presentation on KIDS COUNT, an organization that tracks the well-being of children in the United States. They provide high-quality data and trend analysis, to enrich local, state and national discussions concerning ways to secure better futures for all children — and to raise the visibility of children's issues through a non-partisan, evidence-based lens. To access her presentation and data, click here and visit the KIDS COUNT website for more information. Ms. Boteach's presentation featured her work on Half in Ten, an organization's whose goal is to cut the current number of over 46 million Americans who live below the official poverty line in half within ten years. To learn more, visit the Half in Ten website here, and view her presentation here.
At Women In Government's Outreach to Vulnerable Populations Conference, which took place from May 9-10, 2012 in Portland, Oregon, one of the segments featured information on financial literacy and building assets for America's youths. This session featured Linda Jekel who was appointed State of Washington’s Director of the Division of Credit Unions in 2002, and has been a financial regulator since 1989. She spoke about her work to incorporate financial education into school curriculum and prepare students with the skills that are necessary in managing personal finances. Ms. Jekel has been an active member of the Financial Education Public-Private Partnership since it was established by the legislature in 2004, and currently serves as chair of the Communications Committee, where she is committed to providing financial education outreach for students and teachers. The segment talked specifically about legislation and financial education programs adopted in Washington State. To learn more, please view her presentation here.