CSAs: The Ultimate Two-Generation Approach

Thursday, February 19, 2015

Scholarly inquiry, policy design, and program demonstrations aimed at combating poverty are increasingly employing 'two-generation' approaches, working with both parents and children to construct pathways to greater prosperity. These interventions include educational investments, financial products and services, and social engagement. In places like Colorado, Children's Savings Accounts are already part of the two-generation conversation. CFED and the Aspen Institute are pioneering innovative strategies to build children's assets alongside parents' wealth holdings and financial capability. In other contexts, the growing attention to the power of cross-generation work warrants emphasis on CSAs, uniquely capable of building the well-being of parents and children simultaneously. This two-generation lens suggests not just additional components of a CSA initiative, however; explicitly articulating the value of CSAs for adults in and near poverty, as well as for their children's futures, could engage a broader constituency in championing children's asset building as an anti-poverty tool.

Parents whose children are saving may be more likely to become banked themselves, reducing their dependence on marginal or even predatory financial institutions. They may expand their expectations for their own educational and vocational futures as they see their children take on college-saver identities. They can increase their financial knowledge alongside their children, raising their human capital stores. They may operate as more empowered consumers, as they witness their children as financial agents. Their children can encourage the habit of saving, in a way that any parent who has been prodded by her children not to text and drive, or to give up smoking, or to always wear a seatbelt, can attest.

Significantly, there is rhetorical power in taking a two-generation approach to CSAs, and to financial empowerment more broadly. A two-generation stance neither holds low-income parents culpable for children's poverty or assumes that parents are powerless to help their children succeed. Children are seen as more than just dependents, and parents are viewed not just as essential bread-winners, but as people with their own aspirations, as well. The family is a unit, however constructed, and they are supported in working together to reach their respective and collective goals. A two-generation approach suggests, then, not just some nuances in how to run a CSA or what to measure about its effects, but also a different language for talking about who saves, who changes, and who benefits from shifting to an asset-empowered foundation for anti-poverty policy and practice.

Americans dream, together, in families. Children's Savings Accounts are properly understood as an intervention to support those dreams, for parents, and for children.

Do you have examples of CSAs that use a two-generation approach? Please point us to promising examples in the comments--we love learning about great developments in children's savings!

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