What can I buy with my first paycheck? Should I open a checking account? Why should I start saving for college, or a car, now? Why is everything I want to buy so expensive? Those are just some of the questions typical teenagers ask as they start thinking about a first job. The concepts of managing money through budgeting, saving, and making wise decisions on spending are often a big unknown for most youth. But, with a direct correlation between financial well-being and success in school, eventual careers, and life, it's important to start understanding these concepts early.
This summer, SEFCU's Institute for Financial Well-Being helped hundreds of students across five regions in New York state do just that through several summer youth employment programs, with a goal of teaching skills that will help ensure lifelong success.
From April through August, the Institute provided financial education in Albany, Fulton, Onondaga, Montgomery, Schenectady, and Schoharie counties, helping youth build financial capability, strengthening self-confidence and financial self-efficacy, and encouraging positive habits. The Institute engaged more than 300 youth, ages 14 to 21, in interactive, hands-on experiences to advance their knowledge of financial independence and well-being and to build positive financial habits and self-confidence. Institute team members led 19 financial education sessions with the assistance of several Institute volunteer educators. Many of the sessions were held at SEFCU's business locations in Schenectady and Albany, which was an essential element of the teaching/learning strategy to facilitate stronger youth outcomes and program success. In addition, exposure to these business locations supported participants' career readiness and acquisition of workplace skills.
At SEFCU Square in Schenectady, students participating in the Schenectady Job Training Agency (SJTA) were engaged in the budget simulation, Mad City Money™, a Credit Union National Association program that uses role-playing to practice real-life scenarios around financial decisions youth might encounter. Students were provided with an identity for their future self (including a job title, educational background and income level) and asked to create and implement a realistic budget while balancing their financial needs, wants, and emergencies. The program is designed to provide youth with unexpected windfalls and unplanned expenses. Participant comments included “I can't believe how much stuff costs,” “Having a family is expensive!” and “I need to get a good job to be able to buy these things.” In addition to the budget simulation, students learned the components of a paycheck, calculated gross and net income, established both short-term and long-term goals, learned to responsibly use checking and savings accounts and credit cards, and considered ways to build positive net worth.
In 2013, the President's Advisory Council on Financial Capability for Young Americans concluded, “When young people receive their first paycheck, they are primed to learn more about money management and have a unique opportunity to make a timely and informed choice about their new income.” That conclusion supports the importance of including financial wellness education in the curriculum of youth employment programs, which is now mandated by New York State.
Throughout the summer, the Institute held sessions in conjunction with the City of Albany's Summer Youth Employment Program; the Albany Police Athletic League; FMS Workforce Solutions in Amsterdam, Cobleskill and Gloversville; and the CNY Works Summer Youth Employment in Syracuse, in addition to the Schenectady Job Training Agency.
“The Institute is dedicated to improving the financial well-being of all SEFCU members and the community at large,” said Beth Coco, SEFCU's chief financial well-being officer. “Using a generational approach, we guide and encourage members to focus on achieving economic stability using innovative tools, making informed decisions, and learning and employing positive habits. Our facilitation of summer youth employment programs fits perfectly with these goals. By reaching students early in their career path, we can help empower them to achieve long-term financial stability.”
Participants began the summer sessions not knowing a great deal about what it takes to be financially independent, and left feeling more secure in knowing and understanding the action steps that lead to financial independence. After the sessions, youth respondents to the pre-and post- session assessments indicated a positive change in attitude of 17 percent, exceeding the established goal of a 10 percent improvement in attitude, as set by the Institute in this first year of programming. Our facilitation of summer youth employment programs fits perfectly with SEFCU's mission. By reaching students early in their career path, we can help empower them to achieve long-term financial stability.