Research Insights: Can a Budget-Recording Tool Teach Financial Skills to Youth?

Providing access to a financial diary app to graduating high school students improves financial literacy test scores and knowledge of market prices. The financial app also leads to greater levels of inclusion in the formal financial system, increasing the probability of accessing credit and the level of debt in banks. The treatment effects on financial literacy appear to be strongest among those without exposure to school-based financial lessons while in high school. Young people in developing countries face limited economic opportunities, high poverty rates, and low employment levels. In addition, they often lack access to quality and suitable financial services and are unable to navigate an increasingly complex financial system. Advancing the financial inclusion of youth requires a better understanding of their financial needs and promoting financial education programs. While traditional lecture-based formats have proven effective in delivering financial education in the school setting, a remaining challenge is to reach out-of-school youth without exposure to financial education.