Now that Congress and the White House have agreed on an economic stimulus package to spur spending and try to keep the U.S. economy from going into recession (if it isn’t there already), it’s time to think about ways to encourage more saving and investing in America.

Millions of Americans are barely getting by, living from paycheck to paycheck, or going into debt using high-cost financial services. One in five families lacks sufficient assets to survive at the federal poverty level for three months if they lose their income, according to CFED’s 2007-2008 Assets & Opportunity Scorecard.

What messages are workers and families in America hearing every day? Spend, spend, spend. Although continued consumer spending might help the broader economy and some families to stay afloat in the short term, this continued spending craze is not helping families living on the edge to become more financially secure in the long term.

What we need are policies that encourage people to save — for a rainy day, for home ownership, for college, for retirement, and for their children’s futures. Most of the current policies that encourage saving and investing primarily benefit those who already have assets. We need policies that also help low-income families to save and build wealth.

States and tribal governments can encourage public benefit recipients to use mainstream financial services and begin saving for the future by counting financial education as a welfare work activity, eliminating asset limits that discourage saving, facilitating direct deposit of cash benefits, supporting free tax counseling and preparation programs, and allowing taxpayers to split state refunds. Allowing self-employment as a welfare work activity and supporting car ownership programs expands the range of work options available to low-wage workers.

States, schools, and banks can partner to develop teen bank programs that bring a new generation into the financial mainstream and prepare teens for jobs in the high tech financial services industry. Savings programs such as Individual Development Accounts, Lifelong Learning Accounts, Family Self-Sufficiency accounts for public housing residents, universal Child Development Accounts, and automatic enrollment into portable retirement accounts help adults and children save for postsecondary education and training, homeownership, small business development, retirement, and other asset goals.

Banks and credit unions can partner with cities and states to bring everyone into the financial mainstream through innovative programs such as Bank on California and America Saves.

Policies that protect consumers from high cost financial services such as check cashing, payday loans and consumer installment loans, refund anticipation loans, and predatory mortgage loans allow people to redirect those resources into savings and investments.

Let’s work to implement these policies and encourage people to save, save, save!

Dory is Supervising Attorney for Community Investment at the Sargent Shriver National Center on Poverty Law in Chicago. For more information, contact Dory Rand at 312.368.2007 or doryrand@povertylaw.org.