Stay Informed!

By Stephanie Halligan on 08/01/2012 @ 10:45 AM

Tags: Children's Savings Accounts, Events, Recommended Reading

On Thursday July 28, the New America Foundation hosted the event Youth and Their Money: New Insights on the Financial Lives of Youth in Developing Countries. Supported by The MasterCard Foundation, YouthSave is a consortium initiative led by Save the Children in partnership with the Center for Social Development at Washington University in St. Louis, the New America Foundation and CGAP.

Youth savings and behavior economics experts at the event highlighted findings from youth focus groups and early savings data, and discussed promising ideas on how to influence youth savings behavior and future directions in the field.

Video of the event, from the New America Foundation website.

What does this mean for youth saving in the US?

While YouthSave is only in its pilot phase, children’s savings practitioners and advocates in the U.S. can still glean early insights from this international program:

• There is a business case to be made to banks for youth savings: For over 90% of the youth participating in the pilot, the YouthSave account is their first bank account. This represents an important customer acquisition opportunity for the financial institutions. Depending on the structure of the account, the same business case can be made in the U.S. in unbanked or underbanked communities.
• Programs and products are re-focusing on clients and the needs of youth: YouthSave accounts were developed to specifically address the needs of low-income children in developing countries. Focus groups found that teens valued accessibility, simplicity and privacy, and that poorer youth have a complimentary set of holistic needs related to their finances, such as supporting a family, health concerns and on-going education. Just as YouthSave found with its focus groups internationally, understanding and listening to the target market is an important step toward maximizing program participation and impact in the U.S.
• There are opportunities to influence youth behavior beyond savings: Panelists discussed youth savings behavior, noting that consistent savings habits are more likely to “stick” at an earlier age. This holds promise for children’s savings programs that focus on early childhood and adolescence. At the same time, Alexandra Fiorillo, Vice President at ideas42 pointed out that the incentives for youth to participate in a savings program may differ from adults. When motivating a 13-year-old to open up an account or put aside money for savings, a 2:1 savings match maybe not be as attractive to a teen as a new backpack and a piggy bank.

Interested in learning more?

CFED is featuring a panel of experts to discuss effective youth savings strategies at the Assets Learning Conference, September 20 and 21 in Washington, DC. We are also hosting a day-long Children’s Savings Conference Institute on September 19, focused on the nuts and bolts of planning, program design and fundraising for children’s savings programs in the US. If you’re looking to start or grow a children’s or youth savings program, join us in September at the ALC!

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