Integrating Financial Capability Services in the Head Start Program: An Example of the Asset Project in a Midwestern Metropolitan Area

Background and purpose:  Many low-income families with young children are at risk of poor health and educational outcomes. Research suggests that financial capability services (e.g., financial education, counseling, and asset-building programs) integrated with social-welfare supports provide positive benefits for family well-being. This study used a mixed-methods approach to evaluate a financial capability program, the ASSET (Access, Savings, Support, Education, and Training) Project, provided to Head Start families in a Midwestern metropolitan area. The primary goal of the intervention is to increase the financial capability of Head Start families.

Methods: The intervention in the ASSET project has five key components implemented sequentially, including (1) an entry-level screening on state benefits, (2) five 2-hour financial educational sessions, (3) budget and credit counseling, (4) one-on-one financial coaching, and (5) small-dollar matched saving with a 2:1 match rate and a match cap of $400. Between 2013 and 2015, three cohorts of Head Start families have been recruited to participate in the program (N=339). There are 113 participants who have finished all program components up to this point. Participants complete pre- and post-assessments for financial education sessions. In addition, survey information on participants’ financial attitude (one’s perceptions and opinions on their financial knowledge, needs, and future), and behavior (engagement in financial activities) was collected at three time points—baseline before the intervention, the first follow-up after the third intervention component, and the second follow-up after all intervention components. We use the paired-sample T-test to compare the changes in scales of financial knowledge, attitude, and behavior scales between surveys. Finally, additional qualitative data were collected from program administrators, participants and Head Start staff.   

Results:  Among 169 participants who finished the pre- and post-assessments on financial education, the mean financial knowledge score increased from 10.85 (SD=4.91) to 15.56 (SD=3.85), statistically significant at the .01 level. The comparison of the baseline survey with either the first or second follow-up survey suggests that the intervention statistically significantly improved participants’ financial attitudes (p<.01) and financial behavior (p<.01). Participants were less likely to use payday loan (21% vs. 13%) and had considerably lower level of financial stress (73% vs. 53%) in the follow-up surveys.

Conclusions and implications: Findings suggest that integrating financial capability services in social welfare programs such as Head Start increases low-income parents’ financial knowledge, and improve their financial attitude and behaviors. This Integration strategy may have long-term impacts on financial outcomes (e.g., debt and savings) and non-financial outcomes (e.g., stress, parenting, and child development), which should be examined in future research. Findings from the study also provide insights into how to better implement program.