A first job is a pivotal moment in a young person’s life and a key first step towards adulthood.

By Heidi Goldberg and Courtney Coffin.

City youth employment programs provide a unique opportunity for participants to learn important job and life skills as they earn their first paychecks. Unfortunately, all too often these programs miss the chance to also teach critical financial skills, such as how to manage money, budget and save for future goals.

Some cities leaders are now seizing this opportunity and launching new efforts to help youth get off to a strong financial start in life. Their goal is to bring financial education and access to appropriate financial products into youth employment programs, making them an integral part of the “first job” experience.

The potential payoffs reach beyond better financial habits and new options for participants in youth employment programs. Enabling young people to acquire financial skills and bank independently also helps meet important city goals – for example, reducing dependence on predatory financial providers such as high-cost  check cashing services paving the way toward a more capable and financially prepared workforce.

Through a generous grant from JPMorgan Chase, the National League of Cities’ Institute for Youth, Education, and Families conducted a series of interviews and site visits with 13 cities and their nonprofit partners to learn more about these emerging efforts. The resulting findings and promising practices are highlighted in a new report released today, Youth Employment and Financial Capability: A Municipal Action Guide. The report highlights innovative program models as well as creative ways that cities are funding their programs and forging lasting partnerships with banks and employers.

NLC’s report describes eight specific steps that city leaders can take:

  • Use their authority and “bully pulpit” to become champions of financial capability for young people.
  • Require service providers to include financial capability in city-funded youth employment programs.
  • Harness the power of innovative technologies – mobile applications, interactive games, social media and online platforms – to make learning fun and information more accessible and applicable in real-time situations.
  • Combine financial education with access to mainstream financial servicesand products, recognizing that knowledge is most powerful when put into practice.
  • Design payroll systems that reinforce financial capability concepts, such as automatic direct deposit and payroll cards, to prevent use of costly alternative financial services.
  • Diversify funding and evaluate results so that programs become stronger and are more sustainable over time.
  • Form strong, cross-sector partnerships with financial institutions, youth-serving organizations, multiple city agencies and local employers to strengthen and scale local efforts.
  • Maintain a customer-centric approach that recognizes and responds to the unique needs of the diverse young people participating in youth employment programs.

Exciting models can guide new city initiatives. For example, the City and County of San Francisco partnered with MyPath, a nonprofit organization, to integrate financial capability services into youth employment programs. This collaboration led to an innovative program that includes:

  • enrollment in safe, affordable accounts with features targeted to youth customers;
  • direct deposit, with an option to automatically deposit part of each paycheck into a savings account which included a matched savings incentive;
  • online financial education training modules; and
  • a savings contract with youth participants to reinforce their savings goals.

Evaluations of the San Francisco/MyPath program lend support to the idea that even short‐term programs with behavioral economics features can have significant effects on the financial capability of economically vulnerable participants in youth employment programs.

For more information about incorporating financial capability into municipal youth employment programs and to read NLC’s new Municipal Action Guide, go towww.nlc.org/financialinclusion or contact Anthony Santiago at santiago@nlc.org or Courtney Coffin at coffin@nlc.org.

 

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Originally posted at Cities Speak.