Increasing Financial Capability of Vulnerable Youth: The My Path Initiative
Although financial education efforts have led to mixed outcomes for youth, early research suggests that financial capability initiatives may be a more promising approach. Financial capability efforts incorporate access to financial products and services in addition to an educational component. The Make Your Path (MY Path) initiative is a financial capability initiative that incorporates a focus on “teachable moments”, such as youth earning their first paycheck and managing their finances for the first time. The initiative provides peer‐led financial capability trainings, and connects participants with a savings account at a mainstream financial institution to promote financial security and catalyze economic mobility. This study examines the effectiveness of the MY Path pilot on increasing youth’s financial capacity. Specifically, it measures the program’s impact on savings, financial knowledge, financial attitudes and practices, and interactions with mainstream banking products.
A mixed methods evaluation design was adopted for the study. Participants’ financial attitudes and behaviors were surveyed at the beginning of the MY Path initiative and again at the end, using structured self-administered questionnaires. In addition, participants’ financial knowledge was assessed using pre- and post-workshop self-administered evaluation forms. Administrative data were also used to track participants’ socio-demographic information, as well as information on savings and asset accumulation. Finally, focus groups with the youth were conducted towards the end of the program.
A total of 280 youth between the ages of 14 to 18 from nine agencies across the city of San Francisco participated in this pilot. Of this sample, over 86% were from households that had annual incomes below half of the city’s median household income, and 58% were from households receiving some form of government assistance. The majority of participants were Asians (50%), while 32% were African Americans, 9% Hispanic, and another 9% identified themselves as being multiracial or others (e.g., White, Arab, Pacific Islander). Approximately 59% of participants were female.
Participants saved on average $507 over a six-month period, and accumulated $735 on average through MY Path. In addition, participants saved an average of 86% of their savings goal while 46% fully met their savings goal. Furthermore, youth reported significant increases in their financial knowledge and financial self-efficacy. Youth also reported increased positive financial behaviors such as budgeting, tracking spending, and saving. They also reported increased confidence in making financial decisions, and comfort in doing business with mainstream financial institutions. Finally, 60% of youth reported opening their first savings account.
MY Path demonstrates that a short-term, targeted, and peer led financial education and financial access program can be effective in increasing the financial capabilities of vulnerable youth and helping them establish good financial practices as they enter adulthood. Such programs can make a difference in youth participants’ financial and personal development trajectories. It is a highly promising model and additional research is warranted to explore its scalability across youth employment and youth development programs.