In thinking about how to apply mental accounting to public policy, George Loewenstein writes:
The process of mentally bucketing money in multiple accounts is often combined with earmarking the accounts for specific goals…While it seems like an inconsequential process, earmarking can have a dramatic effect on retirement saving. Cheema and Soman (2009) found that earmarking savings in an envelope labeled with a picture of a couple’s children nearly doubled the savings rate of very low income parents.
The results by Cheema and Soman could explain why some US financial institutions offer clients the opportunity to label college savings accounts with a child’s name. Saving becomes easier because the money is earmarked for the education of a specific child.