The Federal Deposit Insurance Corporation (FDIC) released a report last week outlining the results of its Youth Savings Pilot. The pilot consisted of 21 participating banks carrying out different financial literacy programs to identify the most effective approaches to financial education. The report is essentially a blueprint for creating a successful financial education program.
The participating banks were successful in creating more than 4,500 youth savings accounts and identified several key benefits to providing financial education programs to local schools. A few of those benefits include the fact that financial education helps children build a foundation to improve their financial future while helping banks achieve their goals of supporting their communities. The report also indicates that financial literacy programs help individuals throughout the community build trust with their bank as they see the bank’s commitment to future generations.
Participating banks also offered advice on how to create successful programs. Following are some of the top comments from the report.
Quote: “The program needs to be relevant to kids’ lives. Kids like to see how the skills they are learning have real life value. One way to do that is role-playing.”
Who said it: Richard Martinez, Young Americans Bank, Denver, Colorado.
Why it’s important: For information to stick with a large number of children, they need to know how it applies to their lives. Showing real-world applications to financial education can ensure that children will retain that knowledge into adulthood.
Quote: “Kids [are] talking about spending. Students are having conversations about college debt. They are thinking about saving.”
Who said it: Kimberly Vaughn, Muscle Shoals High School, a partner of First Metro Bank, Muscle Shoals, Alabama.
Why it’s important: This shows that the children who went through this program are motivated to start saving. Getting kids to understand early in their lives what it will cost to achieve their goals can spark a stronger interest in saving.
Quote: “By the end of the school year, the student is more outgoing and has gained confidence.”
Who said it: Kim Drudi, Athol Savings Bank, Athol, Massachusetts.
Why it’s important: Financial education provides much more than knowledge. When that knowledge helps children become more outgoing and confident, they become better equipped to function in the real world.
Quote: “Using students as the educators makes the material relatable.”
Who said it: LaKia Williams, Capital One Financial Corporation, McLean, Virginia.
Why it’s important: When financial education is interactive, it creates stronger engagement among the students, and they can see the application of that knowledge firsthand. By involving students as bank tellers at school branches, those students not only gain financial education, but the role may spark an interest in a future banking career.
Quote: “Students across the board in the early ages are understanding much better the difference in needs versus wants. The upper grades are beginning to understand how money and business works.”
Who said it: Patty Fleming, Treynor Elementary School, a partner of TS Bank, Treynor, Iowa.
Why it’s important: Starting early is important. Financial education is an ongoing process that should begin in elementary school and continue through high school. There are many financial lessons that children can learn about early that will help them advance into more complex subjects as they get older.