U.S. Savings Bonds

On April 9, 2013, the Savings Bond Working Group, a coalition of national and grassroots non-profit organizations, commercial tax preparers, tax software firms, and public officials, sent a letter to U.S. Secretary of the Treasury Lew regarding access to U.S. Savings Bonds at tax time. Asset Building Program Director, Reid Cramer, along with other members of the working group, called for continued commitment from the Treasury Department to preserving and modernizing access to U.S. Savings Bonds as a secure, simple, and powerful savings tool for working Americans at tax time.

This post is co-authored by Krista Holub, a program manager for the Center for Social Development at Washington University in St. Louis and works primarily on the Refund to Savings initiative, focusing on development, implementation, and research; and David Rothstein, a research fellow in the Asset Building Program, as well as a researcher at Policy Matters Ohio.

This is America Saves Week, which is an annual campaign that encourages nationwide discussion on savings and promotes good savings behavior. For those of us in the asset-building field, this is an opportunity to elevate research on the relationship between savings and life outcomes. This research can help justify the importance of good savings behavior, especially when these habits and behaviors start early in life. So in honor of America Saves Week, here are some of the research highlights from the asset-building field. Specifically, these highlights come from our research at the Assets and Education Initiative (AEDI) at the University of Kansas School of Welfare, where we are studying the relationship between children's savings and their financial and educational outcomes later in life.

Asset building practitioners are regularly trying to make the case that saving can be fun. It's a tough sell. The Doorways to Dreams Fund (D2D Fund) is a big believer that harnessing the excitement behind lotteries, sweepstakes, and other competitions can help make saving more fun and more successful for individuals. Their work on prize-linked savings has shown that "'winning' is a powerful and motivating experience for savers and prospective savers." D2DFund is making some serious headway in making saving fun this year with a new tax-timed savings promotion called the SaveYourRefund Sweepstakes.  Here's how it works:

The SaveYourRefund Sweepstakes makes taxpayers a winner this tax season with chances to win $250 in weekly drawings or a grand prize of $25,000 by saving just $50 of their federal refund! Beginning February 1st, 2013 and running through April 15th, 2013, all U.S. Citizens and legal residents over age 18 that are due a federal tax refund can save a portion of that refund using IRS Form 8888 and enter the sweepstakes.

If you live or work in the Washington, D.C. / Virginia / Maryland area and are interested in asset-building, you are in for a treat. During January 11-15, 2012, approximately 20 individual research papers and posters focusing on asset-building research will be presented at the annual conference of the Society for Social Work and Research (SSWR). This research is the latest and greatest from some of the leading researchers in the asset-building field, including Gina Chowa, Michal Grinstein-Weiss, Vernon Loke, Jin Huang, and Youngmi Kim. Topics include savings at tax time, financial capability of youth in international settings, home ownership and housing stability, and debt and asset accumulation. The conference will be held at the Grand Hyatt Washington. Presentations that are "don't miss" are listed below. Click on the number at the end of the titled presentation for a direct link to the complete abstract.

During one of our recent events, Sheldon Garon of Princeton University and Ray Boshara of the Federal Reserve Bank of St. Louis referred to the weak household balance sheet as one of the core economic challenges of our time, suggesting that households must focus on asset-building rather than rely on credit and debt.

On December 13, 2011 the Asset Building Program hosted Professor Sheldon Garon, author of Beyond Our Means: Why America Spends While the World Saves. While economists often claim people save according to universally rational calculations — saving the most in their middle years as they plan for retirement and saving the least in welfare states — there are substantial differences in savings rates across high income countries. For example, Europeans save at relatively high rates despite generous welfare programs, while Americans save little, despite weaker social safety nets. The assumption that generous social benefits will provide a disincentive to save doesn’t hold up.

This presentation was given for “Coming Up with Cash in a Pinch: Emergency Savings and Its Alternatives,” a Family Financial Security Webinar by the Center for Financial Security at the University of Wisconsin.  The webinar details a comprehensive review of savings and households' ability to access cash quickly to meet unexpected expenses, policy recommendations that can support emergency savings, and the work of a non-profit counseling and financial empowerment center in New York City. 

Former IRS Commissioner Fred Goldberg and Peter Tufano, formerly of Harvard Business School but now Dean of the Saïd Business School at Oxford University, have a terrific op-ed at the New York Times today on the issues around the purchase of paper savings bonds.

A bipartisan group of Representatives sent a letter to Secretary Geithner today. The letter shows their concern over Treasury's announced plan to eliminate over-the-counter sales of paper savings bonds. The group is led by Reps. Richard Neal (D-MA) and Jim Gerlach (R-PA) and includes Reps. Petri, Tsongas and Pitts, all Co-Chairs of the Congressional Savings and Ownership Caucus. The key issues with the new policy: