MONDAY, JULY 2, 2012
PAGE 16
THE UNIVERSITY DAILY KANSAN
FINANCE
Saving early improves finances in future
ANNA ALLEN
aallen@kansan.com
Saving your money can do more than pad your wallet. According to a recent report by University social welfare professor Terri Friedline, children ages 13 to 17 who have access to savings accounts and relationships with financial institutions have a higher chance of being successful with their finances later in life.
The report focuses on the benefits of helping children become involved in financial activities, such as opening a bank account, so they begin to learn about — and feel involved in — the financial process.
"It's important to include young people in these financial services so they have access to these types of accounts but also to give them the education and the knowledge to be able to use their accounts wisely and to make decisions that are appropriate for them." Friedline said.
Matt Cross, senior from Kansas
City, Kan., said he never had a savings account growing up because he didn't have money to put in it.
"I had absolutely no guidance in saving because from where I'm from, saving is the start of a good joke you tell your friends," Cross said. "It cannot happen."
For this, Friedline said possible legislative acts could help overcome such issues.
One act in particular, the ASPIRE Act, would set up saving funds for every newborn child with $500.
From then it would have restrictions similar to retirement funds or 401(k)'s, such as penalties for withdrawing before a certain year, Friedline said.
ASPIRE was first introduced in 2004, and most recently in 2010, but has yet to pass committee.
But Friedline said it's not the amount in the account that's important.
"From what we know so far, it might not be that the actual amount of money in the account matters so much, it's perhaps more just owning the account creates this expectation that kids can go to college later in life so they prepare throughout their whole lives for a future that might not have seemed possible without this savings account," Friedline said.
from Dallas, had a savings account growing up and his parents encouraged him to save, he said he didn't realize the importance of saving until college. He plans on starting savings accounts for his children and wants to give them knowledge of their savings.
"Children shouldn't have money, but should know what a dollar buys, and what a dollar truly costs," he said. "Only then can they start saving their own earnings, and I will provide knowledge towards that goal."
Friedline said getting families to involve children in finances — whether the ASPIRE Act has passed or not — can empower kids to continue their involvement with their finances through life.
- Edited by Allison Kohn
Though Will Parke, a senior
POLITICS
Congress passes anti-interest bill
ASSOCIATED PRESS
WASHINGTON — Congress emphatically approved legislation June 29 avoiding interest rate increases on new loans to millions of college students, giving lawmakers campaign-season bragging rights on what may be their biggest economic achievement before the November elections.
The bill sent for President Barack Obama's signature ends a bareknuckle political battle over student loans that raged since spring, a proxy fight over which party was best helping voters muddle through the economic downturn.
Obama signed a one-week temporary measure Friday evening, permitting the loan program to continue until the full legislation reaches his desk.
Under the bill, interest rates of 3.4 percent for subsidized Stafford loans for undergraduates will continue for another year, instead of doubling for new loans beginning on Sunday as scheduled by a law passed five years ago to save money.
Had the measure failed, interest rates would have mushroomed to 6.8 percent for 7.4 million students expected to get the loans over the coming year, adding an extra $1,000 to the average cost of each loan and antagonizing students — and their parents — four months from Election Day.
The Democratic-led Senate sent the measure to Obama by a 74-19 vote, just minutes after the Republican-run House approved it 373-52. The unusual display of harmony, in a bitterly partisan year, signaled lawmakers' eagerness to claim credit for providing transportation jobs, to avert higher costs for students and their families and to avoid being embarrassed had the effort run aground.
To raise other revenue, the government will start charging interest on subsidized Stafford loans no more than six years after undergraduates begin their studies. Today no interest is charged until after graduation, no matter how long that takes.
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