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A third of the global population today is under the age of 19, with 90 percent of these young people living in developing countries and 45 percent living on less than $2 a day. More than ever, young people need the tools to manage their financial lives and, especially,  accumulate savings — opening up economic opportunities and impacting their attitudes and behaviors over the course of their lives.

But what do we really know about the financial preferences of low-income youth, or how to encourage positive financial behavior? Several research and practitioner initiatives have been working on these questions and are now producing preliminary answers. Members of the  Consortium and other experts in youth financial services  discussed both recent insights gleaned from the field, as well as future opportunities for encouraging youth savings at a recent event.

Editorial Intern Ashley Alman reports on the highlights below:

You probably brush your teeth every morning, a habit you started developing as soon as you were able to hold your own tooth brush. So, what if we applied the same logic to asset building – that as soon as you could grasp a handful of change, you started saving?

Members of the YouthSave Consortium and other youth finance experts gathered at ������Ƶ yesterday to argue that this logic can – and should – be applied to today’s youth. In a series of presentations and panel discussions, the experts explained the successes early saving programs have had among low-income youth in developing countries, how such programs could benefit the greater public, and what needs to be done to encourage such behavior.

“Even low-income youth do have some money,” said Rani Deshpande, project director at Save the Children. “Most of it actually comes from their parents.” Kids at all income levels are granted regular allowances for everything from snacks to shoes, and though the under-the-mattress technique is private and accessible, Deshpande and members of YouthSave think these kids should be learning how to properly aggregate larger lump sums.

The experts said that exposure to formal savings habits will broaden youths’ understanding of financial services, develop positive behavioral cognition, and help kids to acquire better access to education and healthcare in the future.

“Savings habits can convert what is otherwise a pretty taxing mental process into an automatic, easy action,” said Jamie Zimmerman, director of ������Ƶ’s Global Assets Program. “To me, the promise of the power of asset effects… is enough to encourage decision makers to find ways to enable youth to lead productive lives.”

Saving can benefit kids outside of the fiscal realm, too. Katia Peterson of Population Services International explained how financial empowerment is important to youths’ health, specifically the population of young women that have turned to prostitution. “When these girls are financially empowered, that sugar daddy has a lot less sway.”

So what’s the next step? Alexia Latortue, Deputy CEO of CGAP, says we need to evaluate the social impact of youth savings, develop smart incentives to get kids saving, and understand the full set of interventions youth need.

“It’s not just about the money in the bank, it’s about the access and the ability to participate in that process,” said Lissa Johnson, administrative director at the Center for Social Development. “It’s the ability to be a part of the economic world and the market world.”

Supported by The MasterCard Foundation, YouthSave is a consortium initiative led by Save the Children in partnership with the Center for Social Development at Washington University in St. Louis, the ������Ƶ Foundation, and CGAP.

Participants