My op-ed today at The Federalist discusses exciting developments in Canada and Britain regarding personal savings. Both nations have implemented universal savings vehicles of the type I proposed with Ernest Christian back in 2002. The vehicles have been a roaring success in Canada and Britain, and both countries have recently expanded them.

In Canada, the government's new budget increased the annual contribution limit on Tax-Free Savings Accounts (TFSAs) from $5,500 to $10,000. In Britain, the annual contribution limit on Individual Savings Accounts (ISAs) was recently increased to 15,240 pounds (about $23,000). TFSAs and ISAs are impressive reforms--they are pro-growth, pro-family, and pro-freedom.

America should create a version of these accounts, which Christian and I dubbed Universal Savings Accounts (USAs). As with Roth IRAs, individuals would contribute to USAs with after-tax income, and then earnings and withdrawals would be tax-free. With USAs, withdrawals could be made at any time for any reason.

USAs, TFSAs, and ISAs adopt the principle that saving for all reasons is important, not just reasons chosen by the government. When people can use such accounts for all types of saving and for any length of time, it increases simplicity, flexibility, and liquidity.

In the United States, the government chooses which savings to favor, with the result that we have a mess of separate accounts with different rules for retirement, health care, and education. Everyone agrees that Americans don't save enough, and one reason is the complexity of savings accounts. The creation of large accounts for all types of saving would simplify personal financial planning and encourage more saving.

There are differences between the Canadian and British accounts. While the annual contribution limit is lower for TFSAs than ISAs, unused contribution amounts can be carried forward under the TFSA, but not the ISA. Also, the TFSA is simpler because it is a single type of account. By contrast, the Brits created unneeded complexity by having separate "cash" and "stocks and shares" versions of ISAs.

Dividends, interest, and capital gains earned within TFSAs and ISAs are completely tax-free. Some UK news articles say that higher-earners may face a 10 percent dividend tax on shares held within ISAs. That is not correct, as Richard Teather confirmed to me. The UK has a complicated system for non-ISA dividends, which involves the use of a 10 percent dividend credit. That seems to have confused some reporters about dividends within ISAs.

If legislation to enact USAs moves ahead in America, we might expect complaints that such accounts would only benefit high earners. Such complaints would be both short-sighted and incorrect. In this new report, HM Revenue and Customs data show that ISAs have broad-based appeal in Britain. The columns in the chart below show that 13 million of the 23 million ISA account holders earn less that 20,000 pounds (about $30,000) a year. That high level of use by moderate-income individuals is great news.

The red line shows that the average value of accounts rises with income. That is not surprising given that people with higher incomes do more saving, which, by the way, is good for the overall economy. But note that the relative level of holdings is higher for people nearer the bottom. For example, earners in the 10,000-19,999 income range hold about 18,000 pounds of assets in their ISAs, so the average holding is about as high as annual income. But for higher earners, average account holdings are only a fraction of annual income.

In sum, policymakers in the United States have put too much emphasis on giving certain groups narrow tax breaks. USAs would be a better policy approach because they would help all Americans help themselves through their own thrift.

For more on universal savings accounts, see my op-ed with Amity Shlaes.

Games that create personal wealth. Imagine if every time you spent 99 cents on an extra life in the game "Candy Crush Saga," the funds instead were deposited into your retirement account. No longer a guilty habit, your favorite games would fund your personal savings.

Games that offer college credit and replace internships. In the STEM fields of science, technology, engineering and mathematics, young people could learn important skills and contribute to research just by playing their favorite digital games. As they "level up" in these STEM games, they would unlock real-world credentials that advance their education and careers.

Games that treat mental-health issues. Doctors and therapists could prescribe casual videogames similar to "Angry Birds" or "Clash of Clans" as a first line of attack against depression, anxiety and post-traumatic stress disorder.

Retirement may seem a distant spot on the horizon after graduation, but success depends on saving and investing as soon as possible. New grads can benefit from the IRS#x2019;s Withholding Calculator ( to determine the right amount of tax is being withheld from weekly paychecks. From there, he or she can evaluate personal retirement savings options and employer#x2019;s plans as well #x2014; both will be necessary to retire effectively. Signing up for automatic deposits into retirement accounts and personal savings allows money to grow without the temptation of spending it first.

Insurance is crucial. Renter#x2019;s insurance is important not only to cover personal belongings that are lost, stolen or damaged, but most policies cover living expenses in an emergency and offer liability and medical coverage if someone gets hurt at one#x2019;s apartment. Auto insurance is the law in many states, and even though disability coverage may be available at work, it is important to determine whether additional individual coverage should be purchased. Finally, the Affordable Care Act has made health coverage a must for young adults. New graduates may stay on a parent#x2019;s plan until the age of 26 even if they have the option for health coverage at work. After age 26, health insurance can be bought privately or through federal and state exchanges.

Young adults should get into the habit of tracking their credit reports from the beginning. By law, everyone has the right to receive all three of their credit reports for free ( each year, and it is important to stagger requests from the three credit bureaus #x2014; Experian, Equifax and TransUnion #x2014; to better check for inaccuracies and potential identity theft.

Finally, for those still having trouble making ends meet, moving home for a limited time period could be an option. New grads should negotiate an affordable rent on a fixed timetable and use those savings to create investment accounts that can pay for major goals like a home, a wedding or graduate school. If you#x2019;re working with a financial advisor already, ask them to weigh in with additional ideas.

Bottom line: The first year out of college, young adults encounter a range of financial challenges that will shape their money behavior for a lifetime. Embracing budgeting, saving and investing is crucial even with the smallest of amount of resources.

Jason Alderman directs Visa#x2019;s financial education programs. Follow him on;

Disappointing figures announced by the Commerce Department late last month triggered further economic concerns. The reported gross domestic product growth rate of only 0.2 percent for the first quarter of 2015 and the -0.1 percent annual inflation rate were far below estimates and deeply discouraging.

At the same time, Federal Reserve policymakers announced there would be no immediate change in interest rates. A number of factors were cited in defending the rate hold, including slower job growth and continued "underutilization of labor resource."

The Fed recognized that "business fixed investment softened." Companies are reluctant to trust figments of confidence without hard data support.

The fact that household real incomes rose strongly but growth in household spending declined points to a central problem in the Feds economic recovery strategy. Consumer demand is based on not only income but outlays. Without confidence, the profile of consumer spending is geared more toward frugality rather than spending on non-essentials.

The Commerce Department reported personal incomes, disposable incomes and outlays were up in the first quarter of 2015, yet personal savings increased by $124.4 billion. This occurred despite negative real interest rates of return on bank deposits.

Savings increase during times of uncertainty. A lack of confidence may explain the increase in saving and why, with unprecedented amounts of ultra-cheap liquidity, consumers are not spending liberally and businesses are not expanding.

Uncertainty caused by ever-changing government regulations and taxes is cited often as the reason for low corporate investment and employment.

Since 2008, the Fed has paid its member banks 0.25 percent on deposited excess reserves. According to the St. Louis Fed, excess bank reserves on March 29 stood at $2.6 trillion. This represents money that banks deposit with the Fed rather than lend to riskier small, job-adding companies.

According to Moodys, cash holdings of US corporations increased between 2006 and 2013 by 81 percent to $1.5 trillion, partly hoarded offshore because of relatively high taxes. In addition, companies such as Wal-Mart have borrowed at rates as low as 0.6 percent to boost their coffers.

Uncertainty may breed frugality among consumers, corporations and banks intent on saving to meet unforeseen changes. For stimulus to work, clarity must replace government unpredictability.

Lynn Franco, director of economic indicators and consumer surveys at The Conference Board, said she believes the fall in consumer confidence was "prompted by a softening in current conditions ... and apprehension about the short-term outlook."

Consumer confidence encourages business investment in jobs boosting income, consumer demand, business expansion and economic growth. Acting alone, the Fed cannot generate income-based consumer demand. Consumers need the security of more income before spending more freely.

Otherwise, the Feds stimulus appears doomed like the situation in Japan after 14 years of even greater monetary stimulation.

John Browne, a former member of Britains Parliament, is a financial and economics columnist for Trib Total Media. Contact him at This email address is being protected from spambots. You need JavaScript enabled to view it..