Statistics show that a child is seven times more likely to go to college if he or she has a savings account. In communities like Pacoima and Hollywood where children are living in poverty, the thought of setting aside money for the future is inconceivable. The Youth Policy Institute’s (YPI) financial literacy program is working to change that by giving families the resources to save for their child’s college education, and ultimately create stronger communities.
Since 2011, the YPI Families Save: College Bound Savings Program (Families Save) in partnership with Citi Community Development & Microfinance, has coached hundreds of low-income families and provided matching monetary incentives to put them on a successful savings road map. Participants learn about banking, basic budgeting and financial aid options.
“It’s amazing to see how new participants share the same mentality and fears when it comes to savings,” said Luz Gonzalez, Families Save Program Coordinator, who consults more than 20 families every week. “We’ve been able to build their trust and give our clients those small basics that encourage them to want to find out more about higher education.”
Ninfa Bautista and her husband Hermilio Quintano completed five hours of YPI’s financial literacy program and are making monthly deposits into their account.
Ninfa Bautista and her husband Hermilio Quintano completed five hours of YPI’s financial literacy program and are making monthly deposits into their account. Not only have they paid off outstanding debts with their savings, but they also opened up an account for their 18 year-old daughter who is in her first year of college.“It’s a good example for us to set for our children,” said Bautista.
Through the curriculum, middle and high school students also acquire first-hand personal finance experience. Students attend fields trips -- both during the school year and during summer programs -- to Junior Achievement Finance Park where they engage in real life purchasing choices like buying a car or applying for a credit card. By understanding these scenarios they are better equipped to make sound financial choices in the future.
Families Save is one component of the Los Angeles Promise Neighborhood, a public-private partnership that provides high-quality academic, family and community services year-round in Pacoima and Hollywood—transforming lives and communities, from cradle-to-college-and-career. The initiative aims to break the cycle of intergenerational poverty.
“Building stronger communities requires addressing all of the underlying social and economical barriers,” explained Kristen Gates, Director of Los Angeles Promise Neighborhood Hollywood Operations. “The correlation between poverty and low education levels is very real and we feel a great sense of urgency to turn these numbers around.”
In Hollywood, less than 50% of students graduate high school and most impacted hot spots have 85% of children living in poverty, with some spots reaching 100%. In Pacoima, two out of three children are academically below grade level and 54% of Pacoima adults have less than a high school diploma.
To date, YPI has opened 427 savings accounts and is in the top tier nationwide with the initiative according to Citi Community Development & Microfinance. As part of the Los Angeles Promise Neighborhood, YPI will expand the outreach of the Families Save Program to 19 schools and dozens of community centers.
Services will be available before, during and after-school hours in order to reach students and families at times that work best for them to ensure high rates of participation.
“We’ve set an aggressive goal to open 1,300 accounts in three years,” said Gates. “We are fully committed to helping Los Angeles communities thrive.”