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Proud to be a part of Youthonomics | Delta Trust

Delta Trust & Bank in partnership with S.C. Financial Care and Pulaski County Youth Services is participating in a new youth savings program, Youthonomics. This program not only focuses on teaching children the importance of saving and budgeting but also offers an incentive program to encourage children to save. After completing a one week financial literacy camp these 12 – 17 year oldĀ graduates are offered the chance to open a regular savings account at Delta Trust. If they choose to open an account, the County then gives each child an initial $25 savings deposit.

Then the fun happens! The incentive program is designed similar to a lottery, so for every $5 saved that child gets a chance to win a prize – the more dollars one saves then the more chances one has to win. The prizes are awarded at irregular intervals roughly 2-3 weeks apart and they range in value. This style savings model is particularly attractive to adolescents.

S.C. Financial Care explained the biology behind adolescents and their savings habits in the initial program proposal. “Biology also works against adolescents being able to save. They appear from the outside to be fully physically developed, but their brains are not. This is particularly the case in the prefrontal cortex, which is the deliberative portion of the brain that allows us to prioritize thoughts, imagine, think in the abstract, anticipate consequences and control impulses.”

When further explored S. C. Financial Care reported that there is a way to successfully engage these young adults. “Think of the image we have of a teenager, and probably mood swings, emotion, impulsivity and risky behavior come to mind. This is because of an earlier maturation of the limbic system in the brain over the prefrontal cortex, creating an imbalance. But what is useful to understand is that studies also show that this part of the brain in adolescents elicits an exaggerated activity, or response, to rewards.”

This research supports the idea of prized based savings programs because it appeals to the overactive reward center of the brain. For the next year The Youthonomics graduate’s accounts will be continuously monitored and prizes will be awarded. Delta Trust is proud to participate in this pilot program and feels that financial literacy for our youth has never been more important or more necessary.

 

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