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Kids with Savings Accounts More Likely to be Better Investors Later in Life, Study Finds
Monday, October 7, 2013 7:00 AM

A report by the Assets and Education Initiative at University of Kansas’ School of Social Welfare reveals that children who are actively involved in maintaining a savings account are more likely to be better investors later in life.

"We found they were twice as likely to continue to have savings accounts and four times more likely to have invested in stocks," said study author, Terri Friedline, assistant professor of social welfare at KU. "We also found that if young people had a savings account as a child, they accumulated an average of about $2,000. Those who didn't have a savings account earlier in life only accumulated about $100."

The study, "Children as Potential Future Investors" is a three-part series based on data analysis from the Panel Study of Income Dynamics. Friedline tracked young people from 2002 to 2009, starting the study at age 17 and ending at age 23. She found that those who had savings accounts when they were young were more diversified with investments as adults and accrued more savings than those who never had a savings account during their youth.

External factors were taken into consideration including college attendance, employment, being raised in a single or dual parent household, income level and whether the child’s parents attended college.

"Holding for all of those things we found that the positive relationships between early savings accounts and financial outcomes held true," Friedline said in the report. "In the long run it shows young people were more likely to invest. We can begin to see the financial benefits of savings accounts opened just a few years earlier. Imagine what these effects could look like if accounts were opened in kindergarten."

One important aspect of Friedline’s report is the necessity of kid-based savings accounts. "We see down the road that young people are saving more and using other financial products," she said.

Even if financial institutions have to think long-term, Friedline suggests it might be beneficial to generate early relationships with consumers who are potential future investors.

Helpful Resources: The Cornerstone Credit Union Foundation’s “Train the Trainer” sessions. This one-day interactive and hands on training program is offered at no charge to credit union staff, teachers, and community partners interested in teaching or distributing the NEFE HSFPP and/or BizKid$.

BizKid$ is a financial literacy initiative that includes an award winning TV series, free classroom curriculum, outreach activities, a website and a monthly online newsletter targeting children 9-16 years old.

Revised in 2012, the NEFE HSFPP is a turnkey financial literacy program specifically focused on basic personal finance skills that are relevant to the lives of pre-teens, teens, and young adults. Organized into six module topics (planning, borrowing, earning capability, investing, financial services, and insurance), the program includes six topical Student Guides, an assortment of 45-minute teacher lesson plans, and a growing collection of online resources and learning activities.

The Foundation is offering the one-day program on the following dates:





Amarillo, TX

Courtney Moran


Little Rock, AR

Courtney Moran


El Paso, TX

Courtney Moran


Oklahoma City, OK

Courtney Moran

Credit unions can learn more about the “train the trainer” session on the Foundation’s web site at