Youth Financial Education as an Asset-Building Tactic

Community and Economic Development – Blog by UNC School of Government

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Youth Financial Education as an Asset-Building Tactic

By Tyler Mulligan

Published February 23, 2012

Tyler Mulligan is a School of Government faculty member.

This post is part of a series that highlights approaches described in a School of Government web guide on asset-building tactics for individuals and communities on the economic margin.

As explained in an earlier post, financial education can play an important role in efforts to encourage low-income persons to save and accumulate assets. Why not start with young people? This post describes two programs to illustrate how youth financial education can be accomplished.

One of the most innovative programs in the country was established by Alternatives Federal Credit Union (FCU), of Ithaca, New York. Alternatives FCU’s award-winning Student Credit Union program combines financial education and financial services by offering opportunities for youth to learn about finances while managing their own money.  Offered at elementary, middle, and high schools, the program gives youth the chance to learn the basics of banking, saving, and credit through real-world activities.  Participating students open a checking account with no monthly fees and no minimum balance and earn a higher dividend rate than offered for a regular savings account. The program employs educational programs and activities to encourage students to make small weekly deposits.  In addition, some students have the opportunity to be trained as tellers for an in-school Student Credit Union and to process transactions for other students.  At the end of 2007, there were almost 1,300 Student Credit Union members, with total deposits nearing $1.1 million.

It is not necessary to establish an elaborate in-school credit union to teach youth about personal finances. Many financial education programs for youth are conducted in partnership with local financial institutions. For example, in 2010, The Support Center in North Carolina directed a youth financial education program that provided age-appropriate financial education curricula for schools on topics such as saving, spending, investing, and money management. The program also offered savings and investment clubs, summer camps, and after school programs.  While in operation, the program partnered with local school districts, youth groups, and local credit unions to undertake the educational activities.

You can read about these and other programs designed to improve financial literacy in the asset-building guide here.