Children’s Savings Accounts in NM
Prosperity Works will facilitate a 12-month planning process, starting May 1, 2012, to bring Children’s Savings Accounts to New Mexico.
Funded by a $299,977 grant from the W.K. Kellogg Foundation, this will be a community driven process learning from the experience of demonstration projects that have been implemented in the United States over the past decade. By the end of the 12 month period a New Mexico children’s savings account product will be developed. It is anticipated that the first roll out will happen in the Fall of 2013 in South Valley, Albuquerque, impacting about 1,400 children. It is our goal to have a product available to be utilized throughout the state by 2015.
Today, 27 percent of families are living in “asset poverty,” which means they don’t have the savings necessary to live at the poverty level for three months if they lost their income. For a family of three, that’s about $4,500. Living paycheck to paycheck, these families do not have the resources to cover basic expenses if faced with a layoff or other expensive emergency. It’s not just emergency savings that Americans lack: One-third of households never save for retirement, and only about 55 percent of the workforce is covered by their employer’s retirement plan. Designing a system that provides avenues for savings to all people will bring more stability to New Mexico’s households, and reduce the demand on emergency services.
There has been extensive research demonstrating the vital role that children’s savings plays on college success. When children have savings accounts they are more likely to enroll and complete college and, interestingly, children’s social and psychological development, as well as their sense of community is substantially enhanced. Prosperity Works has distinguished itself as a leading innovator with its intention to make children’s savings accounts available to all of New Mexico’s children. As product design facilitator, Prosperity Works is committed to paying special attention to social and educational equity and the potential to help close the gaps that exist between those who have a pathway to build fulfilling lives, and those who do not.
When given an opportunity, New Mexicans have always chosen to strengthen their future. Prosperity Works has seen over 1,200 families throughout the state save hard-earned funds to open or expand a business, purchase a first home, or continue in higher education. Over $3 million has gone back into the New Mexican economy as families have realized their dreams and strengthened their future.
Watch for announcements of community meetings and opportunities to engage in the planning process. For more information, or to sign up for planning process alerts, please email us at firstname.lastname@example.org.