The City of Saint Paul’s CollegeBoundBoost (Boost for short) program is the first to test combining Children’s Savings Accounts
(CSAs) with a monthly guaranteed income payment ($500 per month) and targeted
quarterly CSA deposits ($250 per quarter) to families living at 300% of the
poverty line or below. The goal of this study is to understand policy
implications of focusing on meeting basic needs today versus security
and growth needs for tomorrow in the lives of the poor. Semi-structured
interviews with 32 Boostparticipants
reveal that families characterize their financial situation as just “making it”
through use of budgeting, welfare, family help, extra work, and borrowing.
Congruent with a financial needs’ theory of saving, we find that across study
groups participants, in part, spend and save according to a hierarchy of needs
(first spending on survival such as food and bills, followed by saving for
security, and lastly, saving for growth needs such as education and
retirement), with findings supported by actual spending data. Further, this
study design allows us to see that, consistent with financial needs theory (and
contrary to conventional attitudes about irresponsible spending), after
survival needs are met, participants receiving guaranteed income use a portion
of the $500 payment to save for their security and growth needs. A policy
implication of this study is that programs like the prototype Boost which
combinespresentincome
and futureasset
strategies such as CSAs together might be able to provide low-income
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