At Moneythink, we build the financial health of Americans by equipping youth and young adults to believe in themselves, navigate the financial decisions of adulthood, and achieve financial independence, instilling young people with the confidence and capability to successfully navigate the world of finance. Research has shown that nudging students towards decisions to save and set savings goals is most effective around an important financial decision, like when they decide to go to college or when they receive a paycheck. Inspired by this information, we have created our own Youth Employment Program. In partnership with After School Matters (ASM) during summer 2016, we piloted a program that gave hundreds of students the resources they needed in order to set and achieve their own financial goals.
Many of the students we worked with were receiving paychecks for the first time in their lives through After School Matters’ employment program. After last summer 2015, ASM reported that 33% of their 8,000 summer program students did not end up cashing their checks. Far too many of those that did were using check cashing services, which subtract a fee of in exchange for providing cash on the spot. Depending on the amount of the check, these fees could sometimes be upwards of $10-15. With an average check amount of $425, that left over $1 million dollars unclaimed by students, simply because they did not cash their checks. Additionally, 70% of their students were unbanked, leaving them without a reliable place to cash their checks in the first place. Considering these statistics, our goal was to provide our 322 students with our curriculum and weekly mentoring so they could be confident and knowledgeable when handling their personal finances.
By emphasizing the importance of cashing their checks and outlining the safest options, these students were equipped to make informed financial decisions. At the end of our program, 86% of students reported cashing their checks within two weeks of receiving them, an increase from the ~66% reported in summer 2015. Check cashers are easy and attractive options for students since they don’t need an adult present or a bank account, but we wanted students to be able to keep 100% of their take-home pay, and increase trust in financial institutions as a safe place to keep their money. We were thrilled to see that of the students that cashed their checks, 72% did so using a bank or other institution charging a fee of $1 or less. Additionally, of the students we worked with this summer, 20% opened their first bank account.
In order to supplement our weekly mentoring and curriculum, we designed Moneythink Goals, a mobile app for students that assists them in setting – and achieving – their savings goals. Through this app we encouraged our students to avoid short-term, impulsive spending, and instead save their money in an actionable way. With the help of Moneythink Goals, we supported students as they worked towards achieving a long-term savings goal, like saving up for a new pair of shoes, or to buy school supplies for the fall. By the end of the summer, 57% of the students who had set savings goals reported achieving them, and 15% reported partial progress towards their goal.**
Through our Youth Employment Program with After School Matters, our students and mentors were able to experience the positive effects of becoming more financially aware. In one example, an ASM student, Rochelle, reflected on a talk she had with our Fellowship Coordinator, Aj Wheatley. She said, “every two weeks, I have to go get my nails done, and that’s like 50 dollars. AJ added it up for me, and showed me how I could save over $500 dollars a year by getting them done only once a month! [Now] I’m able to keep saving for things in the future that I want, rather than simply spending it on things that I want right now.” One of our Summer Fellows, Priyanka Kadari, mentioned that after this experience,“Every week [Rochelle] would come in… and say ‘Ugh, now I can’t spend money on doing my nails, because every time I want to I just see AJ’s face and that big number!’”
Even when it didn’t relate directly to savings goals, there were still many instances where we helped students to become more financially empowered and independent. Priyanka described her connection with a student named Donald. “I remember he was really struggling because he was working so many jobs, but he wasn’t being paid minimum wage in one of his jobs…. He asked me about it, and I looked it up for him, and it made me really concerned because there wasn’t any reason that I could see that someone wouldn’t be paid minimum wage. He wasn’t working a wait staff job or anything. It seemed like it was because he didn’t have the information. He was surprised when I told him the minimum wage was $10/hr. It felt good to be able to empower him with that information. I pushed him to talk to his boss or someone about this problem, and although I don’t know what the end result [was], it was nice to be able to be there for him and give him more information about his situation.”
The lessons we teach our students are ones they’ll be able to take with them as they continue to navigate through their financial milestones. One of our students, Joshua, said he’s learned that “you can’t spend your money all in one place. In college, you may want to go out [all the time], but you have a $40,000 tuition that you’re paying; you’ve got to get your priorities in order first.”
By helping these students see the value in their finances and the importance of saving and using financial products wisely, we’ve helped them build better habits. As Joshua fittingly summed it up, “Take your time with money. It may be gone in a snap, [and] you may spend it on stuff you don’t need, but the time will come around that you wished you’d saved your money instead.”
To launch this program pilot with ASM, 17 Moneythink college chapter leaders were invited to serve as mentors and provide program feedback. One of our Fellows, Henry French, told us his thoughts on the Summer Fellowship.
“The Moneythink Summer Fellowship was an inspirational experience. Having the opportunity to make a tangible difference in a student’s life was incredible, and the reason why I originally joined Moneythink. I’ve always been disappointed by how seldom financial education is taught to students — it’s one of the most critical skills young people need to be successful. Even when it is taught, too often the topics are not applicable to a student’s current situation. Students need to be learning how to handle their own finances before they figure out the benefits of a 30 year mortgage.
That’s what was so great about this Summer Fellowship. The Youth Employment Program that Moneythink piloted showed students what to do when they received their first paychecks. We provided mentorship that met the students exactly where they were in their financial situation. Meeting with these students week after week, and seeing them progress, learn, and become more responsible and aware of their finances and spending habits was pretty awesome. By the end of the summer, our sessions had shifted from me explaining how to cash a check to an interactive dialogue about how we all could improve our spending habits and budgeting skills.
One of my biggest takeaways from my summer experience with Moneythink was the value of mentorship as a vessel for change. The students I worked with were barely younger than me, and as near-peers we were able to discuss and connect on a level that isn’t always present in a typical classroom setting. It made me really appreciate the value of mentorship for both the mentor and the mentee. It’s a relationship that both sides benefit from, and I’m grateful to have been a part of this program. The maturation my students showed was remarkable, and I can’t wait to see how Moneythink has improved upon this program for next summer.”
This summer’s Youth Employment Program was an incredible learning experience for not only the students, but also for the mentors and Moneythink team. As an organization, our goal is to empower young people with the tools to be financially independent by providing them with a financial capability education platform focused on long-term behavioral change. The results we have seen from this program are extremely promising, but we know there is still more to be done. We look forward to receiving feedback from our partner organizations, our students and mentors, and our data analysis from Moneythink Goals. This feedback will help us to understand how we can work with our partners to mutually assist each other in reaching our organizations’ program goals of preparing students for their future endeavors. Using our experiences from this summer, we’re excited to expand and improve upon this program as we begin to build new relationships and partnerships. With each innovation we make based on our collected data, we will be able to recognize what interventions are most likely to positively affect students’ decisions as they build their financial habits. As always, we will continue to encourage everyone to spend mindfully, save consistently, and use financial products wisely.
** Note: Statistics reflect results from 185 students surveyed via text message who attended every program session, and accessed our curriculum and technology