In the latest installment of our “Future of Success” series – we took a look at the idea of creating a savings account for every child that’s born in the U.S. Basically, when you’re born, you’re given not just a Social Security Number – but also what would be called an “American Stakeholder Account.”
Here are the basics:
- Anybody can contribute to your account, helping you save money
- You can only get $2,000 in contributions each year
- When you turn 18, you can have access to some of the money to put toward school or training
- Once you start working 4% of every check goes into your account
- At 25 you can have access to some of the money to help buy a house or start a business
- The rest of the money is earmarked for retirement
This would do a couple of things, but first and foremost: It teaches kids about their finances at a young age. They have an idea of what it means to save, how to save, and why you save. Now, as a 28 year old who just recently opened a savings account (mainly thanks to prodding from my girlfriend), I can’t tell you how valuable this is. Nevermind the social sciences showing over and over again that kids who save, tend to get better grades, and have a greater likelihood of attending college… but financial literacy is one of the biggest problems facing the country. People are unprepared for drought, so to speak.
The fact is, somebody like me is trusting a 401K and the promise of future payment from my employer to protect my retirement. And if I were to lose my job tomorrow, I could probably only survive on my own for about 3 months.
I’ve also grown up in the Internet Era of Automation, which means: Now, that last one doesn’t really have anything to do with finances, but it’s honest, and serves as a pre-apology to friends and family. Anyway – I wish I was more financially literate, and I wish I had more money stocked away. As a 28 year old, I wish somebody had a plan like this when I was born.
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