To help youth learn the savings habit, First Nations Development Institute is partnering with two high schools and Pinnacle Bank in Gallup, New Mexico, to offer a Youth Savings Account (YSA) program for Native students.

In 2013, First Nations is working with financial education teachers at Gallup Catholic High School and Wingate High School.  These instructors are teaching a financial literacy course called “Life on your Terms” based on First Nations’ Building Native Communities curriculum. To complement the lessons of the class, students will receive assistance opening up savings accounts at Pinnacle Bank. These savings accounts, referred to as Youth Savings Accounts, are custodial incentivized savings accounts for youth that teach positive savings and financial habits.  A custodial account requires approval for all withdrawals by a custodian (which, in this case, is First Nations).  First Nations provides an initial deposit amount of $50 in each student account, and students are encouraged to track the account balance and continue to make deposits.

If a student receives a passing grade for the financial literacy course and goes the entire semester without making any withdrawals, he or she is entered in a lottery to win $100, which will also be deposited into the account.

“Research suggests that having a savings account while in high school can lead to better financial management skills later in life,” stated Sarah Dewees, senior director of research, policy and asset building programs at First Nations. “We designed this program to help kids learn the savings habit, become comfortable with mainstream financial institutions, and start to build household assets.”

“Because of  my experience designing and administering youth Individual Development Accounts and Children’s Savings Accounts, I was excited to work with FNDI to design this savings program specifically for high school students,” stated Christy Finsel, a consultant managing the Youth Savings Account program. “We appreciate the partnership of the local high schools and Pinnacle Bank.”

First Nations is supported in this effort by the W.K. Kellogg Foundation. First Nations and its independent subsidiary First Nations Oweesta Corporation (a community development financial institution), work in partnership with Native American tribes and communities throughout the U.S. to assist them in designing and administering financial and investor education programs. Projects range from helping individuals and families understand the basics of financial management – opening and maintaining a bank account and using credit wisely – to helping individuals understand financial markets and a variety of financial instruments for borrowing and saving. We believe that learning how to manage finances ensures that Native people will be more likely to save and to challenge financial service providers to develop products that respond to their needs. Our programs result in increased investment levels and economic growth in Native communities.

By Benjamin Marks, Research and Program Officer