Eileen Burke 203.216.0718 (M)
|Mellyca, 12, tracks her savings in this diary. She received the book when she opened a new youth savings account at Kenya Postbank, a YouthSave partner. Photo credit: Rani Deshpande for Save the Children.
WESTPORT, Conn. (July 26, 2012) — Teens in poor nations want to save larger amounts of money over the long-term in secure places to pay for their education or to start a small business, which can be used to bump them up into a better set of opportunities, according to a new Save the Children study released today.
"The perception is that teens living in poverty — many on less than $2 a day — have no money, let alone money to save," said Rani Deshpande, director of Save the Children's YouthSave program, which carried out the study on youth savings. "But, surprisingly, our research shows this is not true."
Save the Children interviewed more than 2,000 teens, from age 12 to 18, who are enrolled in or are out of school in predominantly low-income areas of Colombia, Ghana, Kenya and Nepal. The study looked at how teens get their money, how they spend their money and their attitudes about saving.
The study reveals that not only do teens in poor nations have money from allowances, gifts and part-time work, they are already routinely saving it, starting as early as age 12. The money they receive — in amounts as small as 50 cents a month — are often kept in insecure places at home such as piggy banks, inside furniture or under piles of clothing.
Savings Soon Spent
But the savings are usually only put aside for a short time-periods of around three months. Most teens say they dip into their savings to pay for basic needs such as school supplies and clothing.
"Many teens told us they often can't ask their parents for money every time they need basic items like a school notebook. Instead, they put aside what little money they can to buy these items when needed," said Deshpande.
Putting Away Money for the Future
While teens are already saving for short-term needs, they are seeking help to save more money for the future. According to the research, teens say they want to build up their savings in secure saving options that are private, simple and easily accessible to achieve their long term goals. Teens both in and out of school say they want to save for an education, while out-of-school teens say they also want to save to start a business.
Participants in the study also say they want advice on how to grow their money over time. Teens say they now mainly pick up their savings habits from watching others, especially their moms and grandmothers, or from learning the hard way, through bad experiences.
"The research reveals the potential for governments, businesses, and communities to step in and create savings tools that can help low-income kids save safely over the long-term and build their money management skills early in life," said Deshpande. "In most poor nations today, many existing savings options – from village savings and loans to bank savings accounts — are only offered to adults."
Read the entire study “What Do Youth Savers Want?”
The youth savings research was carried out by the YouthSave Consortium through the support of the MasterCard Foundation. The YouthSave Consortium is led by Save the Children in partnership with the Center for Social Development at Washington University in St. Louis, the New America Foundation, and the Consultative Group to Assist the Poor (CGAP).
Save the Children is the leading, independent organization that creates lasting change for children in need in the United States and around the world. Follow us on Twitter and Facebook.