Charlie had dealt with a lot in his 11 years. His dad left when he was five and his mother worked long hours at a minimum-wage job to keep a roof over their heads. Sometimes the refrigerator was empty or the electricity was shut off when money was tight. When his mom was home, she was often tired from trying to work extra hours and distracted by financial worries. The stress from living in poverty was affecting Charlie’s behavior. He was loud and disruptive, didn’t do his schoolwork and frequently got into fights.
Life for Charlie and his family began to change when he enrolled in the Youth Development Program at Neighborhood House, a community center serving the low-income Portland neighborhood in Louisville, Ky. This program provided him a safe environment after school; he received academic support, a hot, nutritious meal and enrichment activities that support and promote learning.
Neighborhood House’s Youth Development Program serves almost 350 at-risk youth. For the 2015 summer program, staff sought activities to encourage positive behaviors as part of vital life skills training. This resulted in a pilot program that was developed and introduced during the seven-week summer program.
Called the “House Economy,” the program provided incentives for positive behavior and introduced participants to financial budgeting. It also provided opportunities to practice math skills. The pilot initiative delivered experiential learning that taught children and teens valuable “real-life” lessons. The House Economy featured a “House Bank” and “House Store,” both of which were managed by older youth. Positive behavior earned “house bucks” and the consequence of negative actions was the loss of already earned bucks. Children tallied up their individual bucks at the end of each day and decided how to manage what they had earned. Options included using their bucks to purchase items at the House Store or depositing them in their account at the House Bank. The store, which was stocked with donations from donors and partners, offered goods in varying price ranges. Children often had their eye on one of the more expensive items, which required them to save some of their earned bucks. They learned how to budget their earnings for the week to cover daily purchases and save for the future purchase of a coveted item at the store.
The House Economy had a positive impact on the children’s behavior, as evidenced by the increase in house bucks earned each consecutive week. One of the program participants, 14-year-old Nolan, said, “Some of the kids didn’t listen to staff and could be kind of wild before we started the House Economy. Having the chance to earn bucks for being good changed how the kids acted.”
Although originally developed as a way to encourage positive behavior, the House Economy had a much broader impact. House bucks were earned for maintaining good behavior, helping peers, volunteering for jobs (e.g., cleaning up after meals) and positive participation in reading activities. Maria Childers, the Neighborhood House education coordinator, said, “Our youth learned to ‘work’ for things they want. This is an essential life skill that will help them in all areas of their lives, both in the present – for example, schoolwork, sports teams, school clubs – and the future – getting into college, finding a job, buying a house, etc.”
Childers added that the program also provided new learning opportunities. Older teens managed the bank and store, which included setting up sales displays in the store as well as managing house bucks deposited in the bank and purchases at the store. Trusting youth to run the store and bank built a sense of responsibility and pride for teenage members. “The program developed our youth’s work ethic, which gives our kids a brighter future,” Childers said.
In addition to improving behavior and providing learning opportunities, the youth demonstrated improved understanding of budgeting and the importance of savings. Nolan saved his money all summer to buy a tablet. Participants reported that the program also gave them a greater understanding of the monetary decisions their parents face on a daily basis, which is particularly important in families with limited resources. “I understand better now when my dad says we can’t buy something because we have to save to pay our electric bill,” said DeShawn, 11. “I don’t get mad at him like I used to when we couldn’t get something I really wanted.”
The summer pilot demonstrated that the House Economy reinforces good behaviors and positively impacts staff-youth relationships. The lessons learned by participants extended well beyond financial literacy. The program taught them life lessons about responsibility and built their self-esteem. The success of the pilot has led to the incorporation of the House Economy into the year-round curriculum of the Youth Development Program.
Charlie’s behavior has improved not only at Neighborhood House but at home as well, according to his grateful mom. He is more committed to school and feels confident his grades will improve this semester. The House Economy is a prime example of the impressive return an investment in today’s youth can yield.
Denise Sears is director of development and communications at Neighborhood House in Louisville, Ky.
Fed in Print: An index of the economic research conducted by the Fed.
FedCommunities.org is a portal to community development resources from all 12 Federal Reserve Banks and the Federal Reserve Board of Governors.