Children’s Savings Accounts: Building Wealth, Aspirations and Prosperity for Children and Families

When Christina McLean of Durham, North Carolina, realized her 9-year-old daughter, Lauren, was eligible for a program that will contribute $500 into a savings and investment account they can tap for education or career needs when Lauren turns 18, she was thrilled. “I did not see just the $500,” McLean said. “I saw $5,000… $50,000… $500,000… even $5 million! I saw a seed that, if I watered and nurtured it, would grow into a harvest that will help me fund my daughter’s future education.”

During this March 22, 2022 GLR Learning Tuesdays session, McLean joined a panel of program developers, funders, researchers and partners in exploring the ways that children’s savings accounts (CSAs) improve educational expectations, opportunities and outcomes for children and families from low- and moderate-income households. 

In addition to McLean, the panel included William Elliott, Director of the Center on Assets, Education and Inclusion at the University of Michigan; Carl Rist, a CSA expert and independent consultant; Patty Grant, Executive Director of the Community Foundation of Wabash County, Indiana; Muneer Karcher-Ramos, Director of the Office of Financial Empowerment for the City of St. Paul, Minnesota; and Colleen Quint, President and CEO of the Alfond Scholarship Foundation. The conversation was moderated by Ginger Young, CEO of Book Harvest, a Durham-based children’s literacy nonprofit that started a CSA program for graduates of its Book Babies program in 2021. 

Drawing on research and practice, the presenters described several CSA models and noted that they all have a positive impact on children’s social-emotional development, parents’ perception of economic safety, maternal depression, parenting practices, parent-child communication, and college enrollment and persistence. CSAs also serve as a two-generation tool for helping households get ahead and stay ahead by promoting financial literacy, building wealth and cultivating a college-going culture and identity. 

Presenters emphasized that long-term assets such as CSAs should not be seen as something that replaces income assistance for immediate needs; both are important. They urged listeners to connect children to CSAs early in life — at birth, if possible — to maximize the positive effects. They described creative ways to increase and incentivize savings. And they noted the way that CSAs create “tangible hope” for children and families.

“Poor kids dream, poor kids have aspirations. They just don’t have a strategy for achieving them that’s realistic for them,” Elliott explained. “Tangible hope means having a true pathway to achieving that dream.”