Blog Post: Insights and Takeaways from event "Youth and Their Money"
By Ashley Alman, New America Foundation
You probably brush your teeth every morning, a habit you started developing as soon as you were able to hold your own tooth brush. So, what if we applied the same logic to asset building – that as soon as you could grasp a handful of change, you started saving?
Members of the YouthSave Consortium and other youth finance experts gathered at New America yesterday to argue that this logic can – and should – be applied to today’s youth. In a series of presentations and panel discussions, the experts explained the successes early saving programs have had among low-income youth in developing countries, how such programs could benefit the greater public, and what needs to be done to encourage such behavior.
“Even low-income youth do have some money,” said Rani Deshpande, project director at Save the Children. “Most of it actually comes from their parents.” Kids at all income levels are granted regular allowances for everything from snacks to shoes, and though the under-the-mattress technique is private and accessible, Deshpande and members of YouthSave think these kids should be learning how to properly aggregate larger lump sums.
The experts said that exposure to formal savings habits will broaden youths’ understanding of financial services, develop positive behavioral cognition, and help kids to acquire better access to education and healthcare in the future.
“Savings habits can convert what is otherwise a pretty taxing mental process into an automatic, easy action,” said Jamie Zimmerman, director of New America’s Global Assets Program. “To me, the promise of the power of asset effects… is enough to encourage decision makers to find ways to enable youth to lead productive lives.”
Saving can benefit kids outside of the fiscal realm, too. Katia Peterson of Population Services International explained how financial empowerment is important to youths’ health, specifically the population of young women that have turned to prostitution. “When these girls are financially empowered, that sugar daddy has a lot less sway.”
So what’s the next step? Alexia Latortue, Deputy CEO of CGAP, says we need to evaluate the social impact of youth savings, develop smart incentives to get kids saving, and understand the full set of interventions youth need.
“It’s not just about the money in the bank, it’s about the access and the ability to participate in that process,” said Lissa Johnson, administrative director at the Center for Social Development. “It’s the ability to be a part of the economic world and the market world.”
To watch the webcast of the event, click here.