Saving early linked to financial success later
Research shows that young people who start saving early have more success meeting goals later.
Research done through the University of Kansas has found that young people who start saving at a young age are more likely to be financially savvy as well as fulfil their educational goals.
The data in the research showed if a young person had a savings account, they were more likely to successfully maintain the account. The information also indicated that they were more likely to invest in products that would assist in accumulating more savings then those who did not start with an account. The studies also found that if that young person had a savings account as a child, they accumulated more savings then those who did not have an account at a young age.
The studies controlled for a number of different variables that might affect such outcomes. These variables included income level of the family, single parent or two parent families, and parents’ educational background. The findings indicated that regardless of the family demographics there was a positive correlation between saving early and positive financial outcomes later.
In another research study done on the relationship between assets and children’s educational outcome, similar finding were found on early savings and higher education completion. If the student had savings designed for school they were twice as likely to be on path for college completion compared to students who do not have designed funds. What is even more interesting is that small amount of designated funds ($1 to $499) saved for education is impactful for success. The data showed that a young person is four and half times more likely to graduate from college then a student with no saving account.
Both of these studies indicate that teaching youth how to save at a young age has tremendous outcomes related to financial management as well as obtaining their education goals. Just opening a basic savings account can provide children the incentive to reach their financial and education goals.
Michigan State University Extension offers a number of educational programs including programs on financial management and housing education. Visit MIMoneyHealth.org where there are a number of educational materials and resources available for free.