Better Balance Sheets are Not Just Up to the Individual

Most individuals and families have resolved to make 2014 the year they get finances under control by paying down debt and saving more.  There are a lot of tips and warnings that families and individuals are inundated with regarding the best way to improve finances.  But is it enough to just provide people with advice and not have policies in place that help them as well?

The advice that getting a college education is a good financial decision is for the most part true.  In the long run, an individual with a college education is more likely to be able to obtain substantial payoffs across the course of their life.  Today, however, most students are leaving college with significant amounts of debt that they may not likely be able to pay off quickly.  What if there was a policy in place that could reduce the risk of this happening?

Many have suggested that the government needs to design policies that help individuals and families build balance sheets that tip toward saving more.  One policy that has been suggested is the Child Development Account.  This specially designed savings account would be opened at birth and have progressive features that would assist those living in poverty save for their future.  Building better balance sheets shouldn’t be solely up to the individual; there should be policies in place that aid in reducing debt and encouraging saving.

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