There are 20 million young people ages 16 – 24 working in the U.S., earning their first paychecks, often through youth employment programs. Many of these youth and young adults are growing up in financial deserts — communities without ready access to safe, quality financial tools and information. As a result, when youth from these neighborhoods take the critical step to secure a job, too many lose their hard-earned income to high-cost check cashers, and end up on a dead-end financial path.
Reaching youth with financial tools and information as they are starting their first jobs gives them a real shot at economic mobility. This teachable moment—a first paycheck—offers a powerful touch point where access to banking, saving and credit-building are especially relevant and timely. What’s more, reaching young people before and as they transition into adulthood can prevent the kinds of financial challenges facing so many adults in America today, such as damaged credit, unmanageable debt and lack of emergency savings.
The vision of MyPath, a national nonprofit based in San Francisco, is that every low-income youth has the chance to make their first paycheck not just about income, but lasting economic mobility. MyPath provides proven, youth-centered models that boost the power of first paychecks by connecting working low-income youth with banking and interactive financial education (including a youth budgeting and saving online platform, MyPath Money). MyPath’s evidence-based programs support youth to manage their income and save for personal goals, and, in doing so, to build their financial capability and confidence. MyPath provides technical assistance, training and materials to cities and youth employment programs to support these partners to “bake” banking, saving and credit-building tools and information directly into their existing youth employment programs. MyPath also supports credit unions to adapt financial products and enrollment processes that reduce barriers for youth (based on MyPath’s Youth Banking Standards). MyPath initiatives in eight communities– including Oakland — have generated the following outcomes: MyPath’s 50+ youth employment partners in 8 cities have engaged 5,000 low-income working youth in banking, saving, and credit-building, generating over $1.5 million in savings.
MyPath’s youth financial capability models have been rigorously tested and proven to be effective in achieving financial behavior and attitude change outcomes. MyPath recently completed a two-year quasi-experimental design study on MyPath Savings. The MyPath Savings model brings together youth employment programs and financial institutions to combine first paychecks with banking and saving. Through MyPath Savings, youth participants ages 14 – 24 have access to a combination of banking tools and a blended model of interactive, youth-centered online and in-person financial education, with the goal of building personal savings, and ultimately turning their paychecks into a future pathway for economic mobility.
One of the key lessons from the study is that young people do bank and save when given the opportunity, but they need youth friendly accounts in order to do so. MyPath’s high take-up and account enrollment rates reflect the strength of using the MyPath Youth Banking Standards with partner financial institutions to reduce youth barriers to banking and maximize enrollment. Another key lesson is that youth workforce staff and settings differ from classroom settings and require different curricula. MyPath Savings’ action-based curriculum is tailored for youth workforce and employment staff and settings: it is shorter and designed to give youth earning their first paychecks a positive experience banking and saving for the first time.
MyPath will soon release a report on the results of its two-year MyPath Credit pilot. MyPath Credit, a youth credit-building model, combines credit-building loans and saving products with financial coaching and embeds these services into existing youth employment programs. Results of the report show powerful impacts on both credit scores and saving among 18-24 year old participants with youth employment partner Year Up Bay Area.
Learn more about MyPath on their website, or reach out to Director of Strategic Partnerships, Sabrina Kansara, to learn more about bringing their Savings and Credit models to your youth employment programs.