As most teachers will probably tell you: Give kids the tools they need to learn, and they'll use them well.
The same holds true with giving them access to savings accounts, direct deposit and goal setting, according to a new study by America Saves on such things on low-income youth workers.
It found that low-income urban youth will save consistently when giving access to savings tools.
The survey respondents were 16-20 years old, participated in a summer employment program, and had low or moderate family incomes, according to the group America Saves for Young Workers.
Here are some of the highlights of the report:
- Following their summer employment, 58% of youth, on average, owned savings accounts, a 66% increase in ownership.
- Following their summer employment in 2015, youth ownership rates for savings accounts exceeded that of national low-income teens by 34%.
- 76% of young workers were given a choice of how to deposit their pay, and an average of 66% self-elected to use direct deposit.
- Following their summer employment program, and corresponding involvement in the America Saves program, 80% of young workers had established a savings pattern, an increase of 54%.
- By August 2015, 61% of young workers had met the pledge goal they had set at the beginning of their summer employment.
- Savings amounts remained relatively steady over time with an average of about $400 saved.
- Youth continued to save after their summer work experience with 61% of young workers having made a deposit eight months after their summer employment ended, despite only 38% of those youth being formally employed.
“This is the first time that many of these youth will receive a paycheck and the America Saves for Young Worker program plays a pivotal part in motivating them to save part of their pay for items they want and need, and for those unexpected expenses,” said George Barany, director of strategic initiative for America Saves, in a statement.
“This special moment in time then becomes an opportunity for employment programs, financial institutions, and America Saves to show young workers how to save and, more importantly, help them set up the systems to save automatically,” Barany says.