Financial Capability Month Recap
Greetings Partners & Friends,
We hope your Financial Capability month was a good one! While every month feels a little like financial capability month here at MyPath, this past April was a big one. We kicked it off with an incredible half-day conference focused on youth financial capability and low-income working youth, where we envisioned a national youth employment system that embeds banking, saving and credit-building to boost the power of first paychecks and put low-income working youth on a path to upward economic mobility. Thanks to all who participated in that lively conversation!
May is already off to a big start with this week’s release by the Federal Reserve Bank of San Francisco of a Working Paper summarizing the results of the first ever in-depth study of a youth financial capability program in the country. Boosting the Power of Youth Paychecksshows how effectively our scalable MyPath Savings model engages low-income working youth in banking and saving, with a remarkable 97% of youth opening two accounts; 96% of youth meeting their savings goals and saving 34% of their income. Thanks to our many partners for making that study possible. We are grateful to our partners and supporters for making this year a groundbreaking one for youth financial capability.
Half-day Conference Co-hosted by MyPath and SF Fed Advances Field Thinking On Getting to Scale.
On April 5th, MyPath and the Federal Reserve Bank of San Francisco co-sponsored a half-day symposium to share lessons and proven practices around integrating financial capability into youth employment programs, to explore how to scale effective models, and to hear from youth directly about their experiences with banking barriers and with banking and saving.
San Francisco’s Treasurer Jose Cisneros kicked off the event, and field leader Michael Sherraden keynoted, offering a vision forward that included bold thinking about national youth policy. Panelists included local and national stakeholders from government agencies, youth employment programs, financial institutions, philanthropy, and universities, all sharing lessons from innovative partnerships and exploring how we build on effective practice to scale these approaches. The day closed with field leader Margaret Sherraden reminding us that financial capability is not just about people, but about the systems operating around them. Bringing home this idea, MyPath Youth Advocates described the impact of banking barriers, and the impact that banking and saving opportunities have had on them, and why they have launched a campaign to ensure that all working youth have such opportunities. As one youth leader noted, “Adults are always telling us to think about the future and plan for it, but they never tell us how to pay for it.” Youth asked participants to support MyPath’s Youth Banking Standards to make quality, safe banking accessible to all youth.
First-ever Experimental Design Study on Youth Financial Capability Demonstrates MyPath Savings Effectiveness.
Tuesday, the SF Fed published its Working Paper Boosting the Power of Youth Paychecks:Integrating Financial Capability into Youth Employment Programs summarizing the results of a study conducted by Vernon Loke of Eastern Washington University, along with MyPath research partners Margaret Sherraden and Michael Sherraden from the Center for Social Development, Trina Shanks from the University of Michigan, and Laura Choi from the SF Fed. The paper summarizes the results and lessons from a groundbreaking two-year study of MyPath Savings funded by the Center for Financial Services Innovation and Citi Foundation. The first ever quasi-experimental design study conducted on a youth financial capability model in the country, it compared the outcomes of two groups of youth that received MyPath Savings with a comparison group. Both MyPath Savings groups received facilitated account-opening into two non-custodial accounts; goal-setting support; direct deposit and auto-split; and financial education, while one group also received Peer Coaches. The study results demonstrate that both MyPath Savings groups achieved statistically significant outcomes: 97% of youth participants enrolled into two accounts; 96% met their personal savings goal; youth saved 34% of their income on average. Youth without Peer Coaches were 3-5 times more likely than the comparison group to have increased confidence to carry out basic financial behaviors (i.e., saving, budgeting, smart spending), while those with Peer Coaches saw greater gains in financial knowledge. The Working Paper can be downloaded here, and the Study Snapshot here.
MyPath is extremely grateful to our study implementation partners, funders, and outside research team and dissemination partners for making this rigorous study possible and for sharing it widely with the field. We are thrilled to be able to share the good news, as well as the lessons and our reflections on next steps the field can take to bring effective practice to more communities and more low-income working youth across the country.
Stay tuned, as a report by researchers from the University of Georgia highlighting the lessons and outcomes from our tested MyPath Credit model – which combines financial coaching, credit-building and saving for low-income young adults – will be released in the coming weeks. In the meantime, you can read our recently released essay, Financial Coaching for Youth and Young Adults, regarding the critical design and delivery elements of this model, that was published last week in The Cities for Financial Empowerment Fund’s The Professionalizing Field of Financial Counseling and Coaching: A Journal of Essays from Expert Perspectives in the Field.
If you are interested in bringing our Savings and Credit models to the youth employment programs in your community, please reach out to Director of Strategic Partnerships, Sabrina Kansara, at [email protected]
The MyPath team