Description of the programme
The MyPath Savings Initiative aimed to promote and improve savings behaviour among young people, while helping them access mainstream financial products. It targeted young people in youth development and employment programmes at the time of their first ‘paycheque’. The workshop-based intervention comprised a comprehensive range of financial education and signposting, including encouraging good practice with regards to saving and explaining access to mainstream financial products. The authors state that there was an emphasis on peer-learning and peer-support, delivered through a hands-on, ‘experiential’ approach. Behavioural economics principles were incorporated to minimise barriers that participants may have faced, and incentivise saving.
The programme comprised of three, ninety-minute workshops that were approximately two months apart, focusing on:
- Financial goal-setting, budgeting and keeping track of expenditure;
- Savings, account management and the ‘power’ of compound interest;
- An overview of financial institutions and financial products.
The study
The MyPath Savings Initiative was devised and piloted between October 2011 and April 2012 in the United States. This article seeks to understand the impact of the intervention and its impact on financial behaviours among 275 economically disadvantaged young people in employment, in receipt of their first regular income.
The study utilised a mixed-methods design with quantitative and qualitative components. It incorporated:
- Questionnaires asking about participants’ financial attitudes and behaviours at both the beginning and end of the initiative;
- An assessment of the financial knowledge of participants using self-administered evaluation forms immediately before and after each financial education session;
- Three focus groups that were conducted at the conclusion of the initiative to assess perceptions and insights regarding the intervention.
The article focuses on the quantitative element of the evaluation.
Key findings
The evaluation identifies the following key findings:
- Participants experienced an increase in their knowledge as a result of the workshops.
- The most significant results were from the session focussing on budgeting and goal-setting. On average, before the session participants were able to answer 43% of the items on the associated ‘knowledge quiz’ for that session. This rose 19% to 62% immediately after the intervention among all participants. Furthermore, in the data that could be matched (153 participants), there was a greater and statistically significant increase of 24% from pre to post intervention.
- A statistically significant improvement of 8% was observed among participants in the session concerning their knowledge of savings, account management and compound interest. Prior to the session participants answered less than 50% of the associated questions correctly, rising to 57% after the session.
- There was also a statistically significant increase of 8% in financial knowledge scores regarding the session on financial institutions and products. Participants answered 43% of the questions correctly after the session compared to 35% before it.
- While the results demonstrate a significant improvement in knowledge, the authors acknowledge that there is room for substantial improvement, particularly regarding the knowledge of financial institutions and products.
- Young people had more confidence in their ability to conduct financial tasks at the end of the intervention than they did at the beginning.
- After the intervention, 96% were confident in their ability to save, compared to 88% before.* 92% were confident in their ability to budget, compared to 76% before.
Lower levels of increased confidence were exhibited in relation to using credit.
- Following the intervention 79% reported they were confident using credit, compared to 58% before the intervention.
- However, all of the results compared well to the national averages (taken from another, third-party survey).
- The results also indicated that there was a statistically significant increase in financial confidence in general.
- Financial behaviours also improved. At the end of the initiative:
- Three-quarters (75%) reported that they saved regularly (compared to 56% beforehand);
- Two-thirds (66%) reported that they kept track of their spending often or all of the time (compared to 42% beforehand);
- Over half (54%) reported that they budgeted often or all of the time (compared to 29% beforehand).
- MyPath participants had a savings account opened in their name as part of the initiative. By the end of the evaluation period, each of the 246 participants remaining in the programme had saved an average of $507.
Points to consider
Methodological strengths and limitations:
- While participants are followed-up immediately after the evaluation, there is no longer-term follow-up to explore the lasting impacts of the intervention.
- Results are tested for statistical significance throughout the evaluation.
Generalisability/ transferability:
- While this intervention occurred in the United States, many of the findings are pertinent and transferable to the financial environment in the UK.
Relevance:
- This report is relevant to all stakeholders and policymakers with an interest in financial education among economically disadvantaged young people, particularly those entering employment for the first time.
