2013 Conference

Financial Services

Financial Services

Recent studies have made the case as to why it is important to help children start saving money regularly early in life.  Savings have positive impacts on children's expectations on college attendance, academic achievement and preparation, and chances of attending and completing college.  Children with savings accounts tend to do better in math, get better grades, are almost twice as likely than those without savings to have higher college aspirations, and complete more years of education.  Among youth who expect to attend college, those with a college savings account in their names are four to six times more likely to attend.  Students with college savings are also more likely to complete their degree.  This study explored the extent to which low-to moderate income parents of elementary school-age children were saving for their future, and if they were also helping their children to save.  The data are from a convenience sampling of 1,764 low income households with a child attending a public elementary school.  A 26-question survey instrument was administered to the parent whose child attended a public elementary school that has 50 percent or more of their students in the federal lunch subsidy program.The instrument included questions about the demographic background of the child, his/her parent, pre-existing and newly opened savings accounts for the child, as well as questions directed to the parent about his/her attitudes towards saving.  Findings indicate a disconnect between parents' stated savings attitudes and actual savings behavior.  An overwhelming number of respondents (98 percent) agreed that saving is very important for the future.  Yet only 56 per cent were saving money regularly, and even fewer parents (42 percent) had started a savings account for their children. Policy and practice implications relating to psychological, physical or environmental, and institutional barriers are identified.