Capturing Real-Time Financial Behavior of Emerging Adults: Results from a Text Message-Based Survey of Foster Youths

Background & purpose:The challenges faced by the approximately 25,000 young people each year who exit foster care without finding a permanent living arrangement with a family are well documented: These young people “age out” to elevated risks of homelessness, early parenthood, poor health outcomes, and incarceration (DHHS, 2016; Courtney & Heuring, 2005). Adding to the challenge, these youths and young adults tend to lack experience with money and encounter barriers to holding jobs, engaging with postsecondary education, and connecting with financial institutions (Peters, Sherraden & Kuchinski, 2016). Despite documented need, however, we know little about how they negotiate the complex financial landscape that they encounter upon leaving care and must negotiate, unlike their peers, largely without familial support. Extant research to illuminate financial capability of youths is based almost exclusively on surveys and interviews that rely on recollection of past financial behavior. This paper describes the application of a two-month text message-based survey (TMBS) process that sought to collect contemporaneous data on financial behavior from young adults with experience in foster care.

Methods: Research participants included young people participating in an asset building program, Opportunity PassportTM, which is available to current and former foster youths in several US jurisdictions. In 2016, researchers conducted semi-structured interviews with 28 participants in four states to gather information on program participation, financial activity, efforts to build financial assets, and guidance (formal and informal) received by participants in making financial decisions. All but two participants subsequently agreed to participate in a two-month-long Qualtrics®-based survey, during which they received one to four text messaged questions every second day, for a total of 30 sets of queries. 

Findings: Response rates for the survey were high, with a mean response rate of 80.7 percent, ranging from 38 percent to 100 percent. Three-quarters of the sample exhibited an overall response rate of at least 75 percent. Income varied greatly, with a median of approximately $1200, and one quarter reported at least a month of receiving no income at all. More than half reported setting money aside for savings during the study period, but about half also reported using savings to pay bills, such as utilities or groceries. Expenditures reported by the TMBS generally exceeded those reported in the in-person interviews, but the TMBS data otherwise corroborated interview responses, especially around the volatility of participants’ financial lives. Sixteen respondents indicated facing an unexpected expense, usually involving car repair or maintenance. Respondents also indicated a high level of volatility in their reported level of confidence in meeting monthly financial obligations.

Conclusions and Implications: The study findings demonstrate the potential of TMBS for gathering contemporaneous and reliable information on financial behavior from young adults, including those facing economic disadvantage. The text message platform may also hold promise for programmatic benefits, as many participants indicated that the TMBS prompts led them to be more mindful of their financial lives.