Center on Assets, Education, and Inclusion

In this study we examine predictors of adolescents' savings account ownership and use of mental accounting with a nationally representative, longitudinal sample of 744 adolescents ages 12 to 15 using Panel Study of Income Dynamics and Child Development Supplement data. We find sizable savings gaps along class lines. Further, findings suggest adolescents are more likely to have savings and use mental accounting when their parents have higher levels of education and have savings for them. Given that parents' education level and parents' savings for their child are directly related to adolescents' own savings, we suggest that traditional banking markets may not be able to equalize the advantage provided by having savings as an adolescent.