October 31, 2021

Every 31st of October is World Savings Day, which recognises the value and importance of saving.

In ‘Savings attitude and behavior in children participating in a matched savings program in Singapore’ (Children and Youth Services Review, 2019), Associate Professor Corinne Ghoh (NUS Social Work) and Assistant Professor Kareen N. Tonsing (Department of Sociology, Anthropology, Social Work & Criminal Justice, Oakland University) investigate whether the matched savings program can help to instil a prudent mindset towards saving among young children.

In a matched savings program, a sponsor or external organization matches the monetary amount that a participant deposits into their savings account. The matched ratio and maximum matched amount are pre-determined before enrolment into the program. This study focused on the SavingStars Matched Savings Program (SMSP), which is a partnership between POSB Bank Singapore, the North West Community Development Council Singapore, and the Centre for Social Development Asia (CSDA). To be eligible for the program, the children had to be 8 to 14 years old and from families with a per capita monthly income of less than S$550, with at least one of the parents gainfully employed. The children who enrolled in the 18-month SMSP program received financial education, group work sessions, a POSB savings account, and incentives for saving (a 1:1 matched ratio for up to an amount of $600).

The researchers used a quasi-experimental design for this study. The treatment group participated in the matched savings program and received its benefits. The control group was not exposed to the program and had no knowledge on it but were also 8 to 14 years old with a family per capita monthly income of less than S$550. Both quantitative and qualitative data were used for the analysis.

In general, the findings revealed that the SMSP program had helped children to achieve an attitudinal shift towards saving. The treatment group perceived themselves to be better at saving when compared to the control group. They also reported a higher tendency to save with a lower temptation to spend.

However, parental support in the program was crucial for its success. The participating children were young and still relied on their parents to make decisions for them. Many children revealed their parents assist to deposit the money on their behalf. The researchers propose that for the continued success of such programs, the child needs to be a more active participant. They suggest that a savings card which the child can use to track their own savings could increase their responsibility and personal accountability towards saving.

Read the full article here.