Financial Literacy Tools that Can Help Families Break the Cycle of Inherited Poverty

Written by: California State Treasurer Fiona Ma

There is a vital conversation among families throughout California on the importance of ongoing financial wellness. You can make a start on building generational wealth by taking advantage of the free resources offered by the State Treasurer’s Office. 

California's Treasurer Fiona Ma

California’s Treasurer Fiona Ma

The STO administers multiple savings programs and collaborates with other state agencies to help narrow the generational disparities in wealth that continue to burden many households throughout California.

According to the Public Policy Institute of California, incomes have grown 63 percent at the top, but only seven percent at the bottom since 1980. Low incomes coincide with persistent poverty. In 2023, five million Californians were unable to meet their basic needs, according to PPIC and Stanford research (California Poverty Measure) that accounts for cost of living and safety net benefits. 

The Annie E. Casey Foundation reports that 16-percent of children in California – 1.363 million — live in families with incomes below the federal poverty level. A family of four with annual earnings below $29,678 is considered poor. The average white family has five times the wealth of the average Hispanic family, according to the Brookings Institution’s analysis of the Federal Reserve’s 2019 Survey of Consumer Finances: White families have a median wealth of $188,200, compared to Hispanic families’ median wealth of $36,100. 

The following programs provide a means for families earning a low income to save money, thus creating economic mobility and future opportunities. 

  • ScholarShare 529: California’s college savings plan offers investment options, tax-deferred growth, and tax-free withdrawals on funds used for qualified higher education expenses. ScholarShare 529 offers a savings estimator, college planning calculator, and webinars. 
  • CalABLE: Enables people to save for disability-related expenses while protecting their eligibility for means-tested public benefits programs. Cal ABLE’s Financial Fitness Center offers 5-minute modules in nine subject areas that walk you through many aspects of financial wellness. 
  • CalKIDS: Helps children save for college or career training after high school. Children born in California starting on July 1, 2022 and eligible low-income public school students are awarded a CalKIDS college savings account with an initial deposit in it. Resources include savings calculators and estimators, and tools to help you plan. 
  • CalSavers: California’s retirement savings program for workers to save for their future. Financial education guides can help you set goals and make the most of your money. 
  • California Housing Finance Agency: CalHFA’s homebuyer tools outline the steps toward buying a home, including the California Dream For All program, which offers down payment assistance for first-time homebuyers. 
  • HOPE for Children Program (coming soon) will provide a trust account to an eligible child who lost their parents or guardian to COVID-19 during the public health emergency, as well as children who have been in the foster system for over 18 months. By providing resources to children facing economic hardship, this program aims to narrow the wealth gap and advance social and economic well-being.  

Finally, a friendly reminder about the 2024 tax season: Many tax filers are eligible for cash-back tax credits that can increase your refund. That’s money you can use for rent, tuition, utilities, groceries, and other important expenses. Low-income workers, including ITIN holders, may be eligible to claim the following tax credits:

Fiona Ma is California’s 34th State Treasurer. She was elected on November 6, 2018 with more votes (7,825,587) than any other candidate for treasurer in the state’s history. She is the first woman of color and the first woman Certified Public Accountant (CPA) elected to the position.

California's Treasurer Fiona Ma visited MEDA in March.

California’s Treasurer Fiona Ma visited MEDA in March.

The State Treasurer’s Office was created in the California Constitution in 1849. It provides financing for schools, roads, housing, recycling and waste management, hospitals, public facilities, and other crucial infrastructure projects that better the lives of residents.

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