And now, one San Francisco-based nonprofit is leveraging that social media savvy to promote financial capability among young people.
Juma Ventures recently launched a Facebook application and mobile text alert system aimed at empowering hundreds of low-income high school students in itsCollegeSet program to save money for higher education.
Participating students open a savings account and receive a dollar-for-dollar match of their college savings – up to $500. They also receive an additional $1,000 for completing other milestones on the path to a four-year college degree. As part of the new application, students can earn up to 30 different Facebook badges for reaching different goals, such as finishing their junior year of high school, making five or more deposits into their savings accounts in one year or completing financial literacy courses. Students can share those badges with family and friends to track their progress toward their goal.
CollegeSet students also receive financial tips, reminders and updates directly to their mobile phones and tablets — including text messages that let students know how their savings progress compares with that of their peers in the program.
CollegeSet developed the idea of using behavioral economics to promote financial success through an innovation grant from the Center for Financial Services Innovation (CFSI).
“We believe CollegeSet will empower young people to take greater control over their financial lives and build healthier financial futures,” said Jennifer Tescher, president and CEO of CFSI. “In funding programs like these, we seek to fuel promising innovations that demonstrate how financial products and services can be a force for good in people’s lives.”
The idea applies the same game-like principles implemented to help people successfully lose weight or quit smoking, while also applying elements of group-based financial counseling — such as peer pressure, goal setting, observing the behavior of others and receiving regular feedback — that encourage savings.
“We’re taking those same ideas and using them to teach students the basic rules of finance,” said Marc Spencer, CEO of Juma Ventures. “By engaging students in the savings process, we’re empowering them to change their behavior and the way they think about money.”
Juma launched its CollegeSet program in 2011, with seed funding from BlackRock, Inc., a leader in investment management, risk management and advisory services. The goal of the program is to close the opportunity gap by eliminating the financial barriers to a college education. Research shows that students with a college savings account are seven times more likely to attend college than students without an account.
In the first two years of the initiative, CollegeSet has opened savings accounts for nearly 1,000 low-income students across the country — and invested $1.5 million into those accounts for tuition and other educational expenses. Ninety-eight percent of participating students have successfully enrolled in higher education.
“CollegeSet is a great opportunity for me to build responsibility as I move onto college,” said Monica H., a CollegeSet student in San Francisco. “I feel like I’m gaining independence.
Emily Lavin is the Communications Manager at Juma Ventures and previously worked as both a reporter and editor in California and New York City.
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