Increasing Financial Capability among Economically Vulnerable Youth: MY Path
Although the national economy is beginning to heal from the Great Recession, many low‐ and moderateincome(LMI) households have been left out of the recovery and remain in financial peril. In order to achieve economic stability and enable economic mobility for the next generation, these families need the skills and opportunities to keep more of what they earn. However, LMI households tend to have less access to mainstream financial institutions and fewer opportunities to develop financial capability, compared to their wealthier peers. This is particularly problematic for LMI youth as they are establishing long‐term financial behaviors while facing an increasingly complex financial system. Although financial education efforts have led to mixed outcomes for youth, early research suggests that financial capability initiatives may be a more promising approach. The primary difference between traditional financial education and financial capability efforts is that the latter incorporates access to financial products and services, in addition to the educational component. The Make Your Path (MY Path) initiative takes this distinction as its foundation to promote financial security and catalyze economic mobility by providing disadvantaged youth with peer‐led financial capability trainings, a savings account at a mainstream financial institution and incentives to set and meet savings goals. The program focuses on youth earning their first paycheck—a critical “teachable moment” to promote savings and connect youth with mainstream financial products. MY Path uses a hands‐on, experiential approach, with an emphasis on peer learning and support, and helps youth develop healthy financial habits and behaviors.