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Kevin Dow

By Kevin Dow

Children’s Savings Accounts: What You Need to Know

Tue, April 25, 2017

Mother and baby

It’s a sound you probably loved as a child – the satisfying “plunk” of dropping another quarter into your piggybank. While your single coin didn’t seem like much at first, each rattle represented another step closer to a coveted toy or treat.

What you learned during those piggy bank days is still true today: it doesn’t matter how much you start with. You just need to start, and early.

Whether it’s through a piggy bank or a fund for higher education, building savings is important and there are many options. One example is a Children’s Savings Account (CSA). CSAs are long-term, incentivized savings accounts established for youth early on that grow until they reach adulthood.

And thanks to a new, two-year investment from Sun National Bank, our United Way will launch our first-ever CSA program. By helping local families and their children begin saving, we’re not only helping build the foundation of life-long financial health but also increasing the likelihood that more students in our region will pursue a college education.

CSAs have been shown to boost college expectations, improve college attendance and completion rates and reduce student load debt.

They also help bridge student achievement gaps. Studies show that youth from low-income households typically have lower expectations of completing college than their more well-off peers. In fact, fewer than one in 10 young adults from low-income backgrounds has a bachelor’s degree by the time they reach their mid-twenties. Youth with just $500 or less saved for college are three times more likely to go to college and four times more likely to graduate than those without savings, making the Impact of saving young truly life-changing.

The benefits of CSAs are not limited to children alone. CSAs engage families in the program, encouraging them to build their own financial capacity and learn new financial skills. In addition, many CSA programs provide financial education, college preparation or academic support, building brighter futures for this generation and the next and contributing to a stronger financial environment for all.

The path to financial stability starts young – what seems like a small step today could make a measureable, lasting Impact over time. Learn more about how United Way helps support self-sufficient families.