The Opportunity: Why Target Youth and Young Adults

The keys to MyPath Credit’s success have been the quality of our design, our approach to coaching for young adults, and the consistency with which the model elements have been delivered across settings. In this paper, we give an overview of MyPath Credit, an innovative model that combines financial coaching, credit-building and saving for low-income young adults, and highlight the key design and delivery elements that make it effective.  The only program of its kind in the U.S., MyPath Credit combines credit-building loans and savings products with one-on-one financial coaching and embeds these services into existing youth workforce programs serving 18 – 24 year olds. A remarkable 85 percent of participants see an improved FICO credit score at the end of the program; youth that start with no score or thin files achieve FICO scores between 650 and 700 within six months.

Essential Design and Delivery Components for Success

• Integration of Financial Coaching into Workforce Settings: Embedding financial coaching and appropriate financial products into youth workforce programs is a strategic way to support low-income working youth to establish savings and credit histories, and to facilitate the development of saving and credit-building “muscles” at a young age. First, such integration leverages the powerful income streams youth are earning in workforce and employment programs, making the coaching content and action plans particularly relevant since youth can take action right away. It also positions coaches to leverage the many features of workforce settings. For example, through coaching, they can be supported to use direct deposit to channel a portion of their income at saving and credit-building. In addition, coaching can be introduced to the whole cohort through the workforce program orientation and/or programmatic trainings. Those touchpoints also offer openings to introduce enrollment into financial products or even programs like direct deposit. It has been essential to ensure consistency of implementation of all elements in the program, as its integration and effectiveness relies upon all design elements.
• Youth Workforce Program Staff Buy-in is Key: Employment program line staff must truly understand the benefits of the coaching in order to effectively offer it to program participants. This requires their buy-in. At MyPath we have found that providing them with training is part of the solution, but that engaging line staff in personal coaching sessions  themselves is what makes the difference. When they have experienced a coaching session and the direct benefits (there are typically concrete outcomes from these “trial sessions” as many youth workforce staff have not seen their credit report, nor are they familiar with how to review it and take related action), they become enthusiastic champions of the service. They are able to articulate the benefits in an authentic way to their participants. Those sites where these sessions did not take place saw less take-up, as staff were not able to articulate the benefits of the coaching service in a compelling way.
• Choosing the Right Timing & Touchpoints For Delivery: Identifying the strategic touchpoints is key for seamless integration and high take-up rates. While they will vary from setting to setting, the sequencing of the steps themselves must be consistent. MyPath has developed tools that support an effective design process. The first step is mapping the workforce or employment program cycle, in particular to identify places where youth cohorts come together to complete paperwork or to receive group training, places where youth receive one-on-one case management, as well as correspondence opportunities. With these opportunities identified, the design process gets underway toward determining which touchpoints are ideal for introducing the coaching service, scheduling appointments, enrolling youth in financial products and direct deposit, and reinforcing financial capability concepts within the natural program cycle.

MyPath has found that introducing the coaching as early as possible in the program, even prior to enrollment as a benefit or service of the program, is optimal. This approach helps to seed the idea and to connect the coaching to the program itself. Ideally youth will enroll in the service at the outset of their workforce training, giving them the necessary time horizon to see results on their FICO score, removing the credit barrier as they transition out of the program and into new employment and housing opportunities.

• What Makes An Effective Coach for Youth & Young Adults: MyPath has engaged a variety of coaches in financial coaching with low-income youth and young adults in workforce and employment programs, who are largely youth of color. Understanding financial products, credit, budgeting and saving strategies is not enough to be an effective coach with this population. To be effective, coaches must be culturally competent, have experience working with youth and young adults, and, most importantly, be “relatable,” which means to be someone that has overcome the barriers youth are facing. MyPath hires for experience dealing with the realities facing low-income youth, youth of color, and immigrant youth, and in overcoming them. Trust is particularly challenging and critical with low-income youth of color, who most often come from families that have had negative experiences with financial institutions and services, in particular with credit. Because effective coaching is rooted in trust, this expertise is essential. Preparing coaches with the essentials of coaching, personal finance best practices and credit-building is also critical.
• Outcomes Evaluation: Evaluation surveys and outcomes data tracking must be integrated into service delivery to establish baseline data points, and track outcomes data as the program is rolled out. Data is key to share progress with youth themselves, as well as to share with program staff and leadership to motivate stakeholders and to drive program enhancements.
• Incorporation of Technology:  MyPath has found that integrating technology can make processes more efficient when implemented well. For example, scheduling is best done using a web-based system that also tracks programmatic data. Technology has also facilitated coaching sessions; for example when coaches use laptops or tablets in sessions it facilitates quick research, form completion, budget development and evaluation tracking. MyPath Money enables youth to engage with three interactive personal finance modules via desktop, tablet or mobile phone. MyPath coaches also use email, text and video chat to stay in touch with youth clients, who often choose to follow up using text for real-time questions and advice-seeking.

Strong program design to integrate workforce services and financial capability programs, along with effective professional financial coaching from a trusted source, and consistent program element sequencing and delivery methods can build credit and savings muscles early, putting young people on a path to upward economic mobility.  At MyPath, we look forward to a greater focus in the field on starting early, toward building a platform that prevents financial pitfalls and positions young adults for financial success.