After a multi-year decline in the personal savings rate, economists now say the average American household is on track to set aside more than five percent of their annual income.

For many households, an increase in personal savings means a greater ability to pay for college educations, start a small business, cover personal emergencies or prepare for a secure retirement.

While this is indeed good news for everyone who has the means and the motivation to save, the fact is millions of Americans still face some very big challenges in trying to build an emergency fund and put aside money for the future. There is more that can and should be done to encourage and reward savings at critical income levels.

At lower income levels, it’s hard enough for families to just make ends meet. Saving even a small portion of a small paycheck is a pretty tall order. And for those who are able to save a little, unexpected expenses or losses of income often means draining the pot of savings, making the ability to accumulate money very difficult.

Like so many of the issues that we face as a country, we believe our national savings challenge requires government and the private sector to pull in the same direction, using multiple means to inspire and incentivize Americans to save more.

For our part, Intuit has supported and participated in a personal savings initiative that was developed in collaboration with researchers at Washington University in St. Louis and Duke University.

It’s called Refund to Savings, or “R2S”, and a big part of its mission is to apply lessons of behavioral economics to encourage tax filers to save a portion of their refunds at tax time.

Using behavioral economics principles in Intuit’s tax preparation software offered through the IRS Free File program, researchers have developed motivational messages prompting people to save for emergencies, as well as future expenses like college and retirement. Each message suggests a different amount of the refund that should be set aside for these future events – and the research shows they work. More people saved more money as a result.

For most Americans, especially those at lower income levels, tax refunds are often the biggest single payment they receive all year. What this R2S project has taught us is that the tax time moment is an opportune time for people to take account of their finances and to help people think about setting aside money for the future. It has also demonstrated that specific behavioral cues and messages about real life events provide a real motivation for people to save.

Most telling from this research are the follow-up surveys that Washington University researchers have with the taxpayers, asking them questions such as whether they still have their savings, what type of savings vehicle they use, and whether they fulfilled their savings and/or debt reduction goals they set to achieve at tax time.

For the government’s part, economists generally agree that the tax code could work more effectively to incentivize savings. Particularly at lower income levels, savings could be made simpler and more rewarding.

One example is the Retirement Savings Contribution Credit, or “Saver’s Credit.” The credit is intended to encourage low and moderate-income taxpayers to save for retirement by providing a tax incentive for contributions made to retirement accounts. It’s a well-intended idea, but only a small portion of the people eligible for the credit take advantage of it.

Ultimately, the country needs comprehensive tax reform. But the current lack of consensus on big reforms should not be an impediment to taking smaller steps toward a simpler, more productive tax code.

Making it easier and more worthwhile for people to save and better prepare for their own futures, we believe, would be a good place to start.