In a seemingly symbiotic relationship, the future of the modern credit union is dependent upon young members (ages 25 and under) while the financial health of today’s young people could use some tender loving care in the form of credit union sponsored financial literacy efforts.
According to the Filene Research Institute, 76 million young people make up Generation Y whose members were born between 1977 and 1995, now entering the workforce and becoming a major disruptive force in how products and services are marketed and consumed. However, according to the Credit Union National Association (CUNA), only one out of every four 18 to 24 year olds (the young adult subset of Gen Y) is a credit union member, and the average credit union could stand to lose $14 million in loans over the next 10 years if these numbers do not change for the better.
At the same time, today’s youth are grappling with a lack of financial knowledge and budgeting skills. In a 3-year joint assessment of financial literacy in U.S. high schools, the Treasury Department and Department of Education found the average score of almost 76,900 students in 2010 was 70%. Last year's testing of about 84,000 students and this year's of about 80,000 students were both a point lower: 69%. Coupled with only half of parents discussing financial matters at home (according to Capital One’s 2008 Annual Back‐To‐School Survey), an average debt of about $45,000, (including everything from cars to credit cards to student and home loans) and an unemployment rate of 12.4%, according to a recent PNC financial independence survey, these struggling “Millenials” could use a financial savior.
The Credit Union Movement on a Mission for Young People
Anyone who is part of the credit union movement recognizes the important role that youth play. They know that young people need financial guidance from a trusted source in order to positively shape their financial futures, while also cognizant that credit unions need to grow the young segment of their member bases in order to ensure their financial success. As such, many financial co-ops and related organizations in this country, and around the world, have dedicated time and resources to exclusively youth-centered efforts.
National Youth Involvement Board: 4 Decades Dedicated to Youth
According to Anne-Marie Bisson, Northeast Regional Coordinator and Treasurer for NYIB, on the basis of a CUNA Mutual roundtable meeting in October 1967 that recognized the rising average age of credit union membership, subsequent enthusiasm for youth outreach prompted creation of the National Youth Involvement Board in 1972. Its objectives were to obtain grassroots input from individuals working in credit unions and leagues, with the purpose of serving as a national system for the dissemination of information and resources regarding youth participation in the credit union movement. Credit union leaders recognized the need to reach out to young people to ensure a bright future for the movement, and NYIB further aided the cause through creation of what is now the National Credit Union Foundation (NCUF) Development Education (DE) program.
The NYIB Network consists of professional employees and volunteers representing credit unions and credit union related organizations. This includes credit union individuals who report data on classroom financial education, those who attend the NYIB Annual Conference, state league liaisons, state voting delegates, and all whose interests mirror the NYIB mission -- helping today’s youth become financially savvy individuals and loyal credit union members. “This mission exists for direct service to its network, and it supports all organizations that believe marketing to younger generations, financial education within and beyond the classroom, and development of future credit union leaders are essential factors in the success of young people and of the credit union movement,” explains Bisson. “Further, the NYIB supports providers of products and services that aid credit unions’ financial literacy and services outreach among younger generations.”
Bisson says that NYIB is regularly referred to as a “best kept secret,” especially for its annual conference. “Participants leave inspired by their peers, with greater enthusiasm, commitment, and focus on youth-related work for the year ahead.”
In her current role as Northeast Regional Coordinator and Treasurer for NYIB, Bisson was tasked in 2005 with creating a Financial Education Team at Jeanne D'Arc Credit Union (Lowell, MA) at a time when teaching financial education was not the "in" thing and resources were hard to find. “Someone recommended NYIB to me and at the annual conference I met dedicated financial educators who openly shared their ideas, provided resources and were a constant source of encouragement,” she relates. She left the conference full of energy and armed with information that she could immediately put to use prompting her return every year since then.
In an effort to accomplish its mission by promoting credit union outreach to young people, building awareness of and credit union commitment to financial education, advancing expertise through an annual conference, and sustaining an active peer network for cooperative exchange, NYIB is run by a group of volunteers from around the country, who additionally hold full time positions in either a credit union or credit union league. “I am extremely proud to be a small part of such a dedicated network that is truly making a difference, one student at a time,” contends Bisson.
Alternatives Federal Credit Union Changing Young Lives
Alternatives Federal Credit Union (Ithaca, NY) operates 10 school credit union branches including 9 elementary school branches that are run with 40 adult volunteers. “The elementary school branches allow students to make savings deposits every week and some get to be student tellers,” says Joe Cummins, Community Development Educator. The credit union’s Youth Entrepreneur Program teaches elementary school students from families with low-incomes how to create and operate a small business. Alternatives also operate one live middle/high school branch with a student teller that can do withdrawals and deposits. “Our Bill Myers Youth Internship provides a $2,000 stipend for a high school junior or senior to work at Alternatives after school,” explains Cummins.
The Student Credit Union started in 1990 when the Founder of Alternatives, Bill Myers, realized that youth needed their own credit union. “He wanted young people to be involved in providing financial services for their peers,” says Cummins. And, as a community development credit union (CDCU) whose mission is to build wealth for underserved people and communities, serving youth is a perfect fit since they are, unfortunately, an underserved community.
In his position Cummins runs all the school branches and teaches the credit union’s adult 7-week money management class, MoneyWise. As a teacher he has learned that most of the adults had never had a savings habit. Likewise, many teens had already formed an identity around not having money. “They had already learned how to get what they wanted either by waiting, asking or just dreaming about it - saving wasn’t an option; it took too long for a mind that thrived on instant gratification.” He relates that young children, on the other hand, were much more excited about learning to save because creating a savings habit at an early age is fun and easy. “The best part is that these young children will never know a time when they didn't save -- they will be much better prepared as teenagers when they are confronted with peer pressure and marketing ads.”
Alternative’s youth program has been well received by parents as well. “Parents started talking about saving as a family because their child was a regular saver, and they like to volunteer for this program because they value this lesson as an important life skill,” reports Cummins.
By making saving a weekly event for kids, it becomes a priority in their lives. Cummins fondly recalls the 8 year-old girl who bought her own shoes. “Her mother told us she was surprised at how she took better care of those shoes then the ones they gave her.” Another young girl saved her money for three years to buy her own puppy. “These young children will always know that they can save money if they want something,” contends Cummins.
If you are a young person hoping to build good savings habits or a parent who wants a safe place for their child to learn about money management, know that the credit union movement has you in mind. Not a credit union member? Find a credit union and get on the road to becoming financially literate!