Let's Make America Thrifty Again

What if convenience stores sold savings bonds instead of lottery tickets? A call to turn our nation of debtors into savers.

I loved this article in today's online edition of Money Magazine. Though interest rates are in the toilets these days, the concept of making "saving" and giving access to savings instruments is a great idea. I remember my savings account as a kid growing up at Tracy Collins Bank [bought out by West One Bank, then bought out by US Bank] was 10%. My employer now even offers payroll deduction for various savings programs, which can be a great idea for people who are not disciplined enough to save every pay period. The point in the article that the average U.S. Household spends more on lottery tickets than they do on basic dairy needs for their homes was shocking. Saving for some people must really be a hard thing. If you just learn to do it automatically, even if it's only a few cents or bucks, it becomes habit.
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Here's one really simple plan to reach all kinds of would-be savers: Make U.S. savings bonds ridiculously easy to buy.

Peter Tufano of Harvard Business School observes that the government has actually eliminated its marketing budget for EE and I bonds. Yet these are very effective savings tools, especially for the younger and lower-income savers that banks aren't trying to attract. (Bet you didn't know this: It's not uncommon, Tufano has found, for banks to turn down people for a basic savings account if they've bounced checks in the past.)

Tufano and Princeton's Daniel Schneider have proposed adding a line to tax forms so you could get part of your refund back in bonds. Aside from the convenience, this would send a signal that Uncle Sam thinks saving is a good thing to do with your refund. Another idea is to sell savings bonds in retail stores, perhaps in the form of gift cards. My grandmother would have loved that.

Tufano has also been studying a wilder notion. How about combining savings and lotteries? "The average household spends $514 a year on lotteries," says Tufano. "That's more than they spend on dairy products."
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Though some of these suggestions are a bit extreme and most likely will never happen, I agree on the main point. Consumers and retailers alike need to be more focused on savings, and less contingent on credit.