A Balance Sheet Perspective on Financial Success: Why Starting Early Matters

Abstract

This paper offers four ideas. First, a balance sheet perspective on financial success is constructive, and that a meaningful measure of the success of financial capability efforts is the health of one's balance sheet. Second, given relatively weak balance sheets among younger Americans before and after the Great Recession, and given that economically vulnerable families assumed greater balance sheet risk heading into the recession, efforts to build healthy, diversified balance sheets early in life should be strongly considered. Third, policies that establish savings accounts at birth or when entering kindergarten, which have been enacted or proposed at the local, state and national levels, hold particular promise and thus merit further consideration by policymakers, researchers, and others. Fourth, efforts to build savings and assets early in life are likely to yield benefits to children, families, and the economy. Further research and demonstration efforts are critical to moving this agenda forward.

How Does Consumers' Financial Vulnerability Relate to Positive and Negative Financial Outcomes? The Mediating Role of Individual Psychological Characteristics

“…The FCA () and CFPB () report low literacy as a risk factor of financial vulnerability. In this regard, consumer research typically considers high school completion as a relevant cut‐off point, and finds that saving rates are considerably lower among high‐school dropouts (e.g., Boshara and Emmons ). Accordingly, not completing high school resulted in a score of one on the vulnerability scale (0.8% of participants).…”

Creating Financial Capability in the Next Generation: An Introduction to the Special Issue

“…The final contribution in this section is an invited paper by Boshara and Emmons (): “A Balance Sheet Perspective on Financial Success: Why Starting Early Matters.” They assert that the health of the household financial position is a meaningful measure of the financial capability of American households. Comparing balance sheets before the Great Recession with balance sheets after it, they call attention to the relatively weak financial positions of Americans in their 20s and 30s.…”

“…The final contribution in this section is an invited paper by Boshara and Emmons (2015): "A Balance Sheet Perspective on Financial Success: Why Starting Early Matters." They assert that the health of the household financial position is a meaningful measure of the financial capability of American households.…”

“…The Center for Financial Services Innovation provides leadership and funding for creation of quality and accessible financial products aimed at improving the financial health of US households, especially unbanked and underbanked ones . A key strategy of the center is to explore the potential of new technologies, such as mobile platforms, that may offer low‐cost ways to reach the unbanked but that have taken off slowly in the United States (Boshara and Emmons ; Huang et al ). The receipt of a large refund at tax time, owing to the Earned Income Tax Credit or the Child Tax Credit, provides another opportunity for families to learn about and accumulate savings (Romich et al ).…”

Financial Literacy and Consumer Financial Well-being in Ghana: Any Nexus with Economic Stability

“…The study first determined the association between household financial literacy and economic stability at the national level, and then separately estimated consumer financial well-being (stability) and economic stability (eqns. [1] & [2] respectively). The two variables were then merged in a complete model to determine their joint effect on economic stability in equation (3).…”