The long-term economic security and development of a family depend largely upon saving and asset-accumulation, yet most measures of economic well-being focus on short-term consumption needs. This study takes a broader view, developing precautionary, retirement, homeownership and education savings goals. Together these savings goals constitute a new set of asset-based measures of family financial well-being. Estimated savings needs depend upon family type and other assumptions, and we consider investment gains and differences in dollar values over time in our calculations. This study shows that families should save $155 to $572 every month to address all four savings needs. The number of children in a family affects total monthly savings goals considerably, but the number of adults has limited impact. The study’s savings goals can assist families in making financial plans and provide target savings amounts to inform public discussion and policies.
Subsequent publication: Nam, Y., Lee, Y., McMahon, S., & Sherraden, M. (2016). New measures of economic security and development: Savings goals for short- and long-term economic needs. Journal of Consumer Affairs, 50(3), 611–637. doi:10.1111/joca.12078
Project: Livable Lives Initiative
Citation
Nam, Y., Lee, Y., McMahon, S., & Sherraden, M. (2014). New measures of economic security and development: Savings goals for short-term and long-term economic needs (CSD Working Paper No. 14-28). St. Louis, MO: Washington University, Center for Social Development.