Pen Pals Save is a saving program designing for elementary school students in the U.S. The goal of this program is to help elementary school children develop saving habits. According to the research from New America Foundation and Center for Social Development at Washington University in St. Louis, children who have a small amount of money (e.g., less than $1 or $1 to $499) designated for education are three times and two and a half times more likely, respectively, to enroll in and graduate from college than children with no saving accounts. Findings also show that having savings designated for school might have a stronger impact on children’s college outcomes than having basic savings. The research also shows that putting an initial seed deposit in an account will play an important role in anchoring the account and providing the resources to support the infrastructure. 

Following BJ Fogg’s research, people need both sufficient motivation and ability to change their behavior. If lacking in one, they need a nudge. Since students might lack sufficient motivation to save when the more attractive option is to spend, the nudge will be a Pen Pal program that employs peer encouragement. 

Our program (government-sponsored) will provide students in participating schools a small $5 allowance each week (the ability) and pair each student with another student from different participating school (the motivation). There will be an initial $50 seed in each student’s Children Saving Account, and at the end of the semester, the amount saved by the student will be matched.

Each week, when the teacher gives students their allowance, the student will be given time to email their pen pal with general updates to foster a friendship and to reflect on their saving and spending history / plans for the upcoming week (how much of the $5 will they save this week and why?).

At the end of the semester, the student will do a presentation for their “saving story” with their pen pals and the amount of student account will be matched by school.