Learning to save by looking ahead: the role of financial literacy in Vancouver’s Downtown Eastside

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This study uses survey information collected from low-income people living in Vancouver’s impoverished Downtown Eastside to explain why some people and not others manage to save, and suggests policies financial institutes might enact to make low-income non-savers into savers. A survey of 110 Pigeon Park Saving Community Bank (PPS) members examines the degree to which the tendency to save corresponds with financial literacy levels, sticking to a budget and, future planning. Tests of association show that the only variables directly related to saving is future planning and making and sticking to a budget, but further testing indicates a relationship between future planning and financial literacy, future planning and budgeting and budgeting and financial literacy. Based on these findings this study proposes three policy options that augment the status quo by which PPS can encourage increased saving among customers. These include; (1) one-to-one lessons on financial literacy; (2) one-to-one lessons on financial literacy with matched incentives; (3) one-to-one lessons on financial literacy with supermarket incentives. However, using assessment criteria of cost, effectiveness, administrative ease, and stakeholder acceptability, there is no one option that outweighs the other options. Therefore, the study recommends a monitored pilot program involving all the above options to find the most effective option, referred to in this study as the “Mixed Bag’.
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