Credit Unions Poised to Teach Young People the ABCs of Finances
By Cyndi Cohen Credit Unions Online
Credit unions are on a mission, to get to know today’s youth and bring them some much-needed financial education.
Generation Y, or the Millenials, roughly age 17-32...they are not only the largest group of consumers since the Baby Boomers but are also confident, optimistic, diverse, technologically proficient, socially conscious, eager, powerful, team-oriented, and ambitious. Unfortunately, they are also known to be free spenders, poor money managers, recession victims, and products of the get-it-now, pay-for-it-later mindset that has helped send this country’s economy south.
Generation Z, or the Digital Natives, roughly age 2-16…they are smart and very tech-savvy (even dependent on technology), socially responsible, constantly multitasking, always connected, global, flexible, respectful, and culturally tolerant. They have also been categorized as materialistic, demanding and short tempered, with feelings of entitlement and instant gratification. However, growing up during the last several years when families overall have been focused on saving and spending less, Gen Z has somewhat developed a sense for the value of money.
So these are today’s youth, on paper – their descriptive names and generational profiles. But they are also our children and our future leaders, doctors, teachers, business people, and humanitarians. Keeping in mind their characteristics, similarities, and differences, all of these youngsters are looking for a financial institution that will not only serve their financial needs as they enter the future but one that will also offer the educational resources, knowledge, and tools to guide them there. Credit unions are the answer to the financial calling of today’s youth!
A Credit Union not only offers affordable, easily accessible financial products and services for young people, they also offer financial education for youth as young as 2 or 3 years of age. In fact, many credit unions are now segmenting the programs for their young members in order to better serve the sub-groups of Gen Y, offering special products, services, and financial literacy resources for kids, teens, and young adults. As such, a credit union will help youth obtain, learn about, and manage their first account, first credit card, first loan, and everything in between.
Youth Financial Literacy, Credit Union Style
In the spirit of People Helping People, credit unions want to help young people become financially literate members of society. Anyone can open an account or use a credit card to buy things, but it takes a certain outlook and discipline to save money in that account or use that card to build one’s credit. These are the very skills that credit unions are on a mission to impart to young people who are in vital need of financial intervention and guidance.
Credit unions associated with the North Carolina Credit Union League (Raleigh, NC) are impacting the lives of young people in North Carolina through their partnerships with others in the community. The North Carolina Credit Union League (NCCUL) is the trade association for North Carolina’s 93 credit unions which supports the successes of delivering financial services to nearly 3.2 million North Carolinians. According to Lauren D. Whaley, Director of Legislative and Regulatory Affairs, one of the most successful ways for a credit union to improve a community’s financial needs is through collaboration. “National, state and community-based organizations partner with credit unions and continuously strive to establish new and innovative ways to build financial relationships with consumers.”
This goes for young consumers as well. Below are some of the ways that North Carolina CUs work together to bring youth the very best in financial literacy.
The NEFE High School Financial Planning Program is sponsored by the National Endowment for Financial Education (NEFE) and numerous other organizations and is intended for use as a public service to enhance the financial literacy of youth. The NCCUL has been engaged in this initiative for some time and promotes it to teachers in NC through direct contacts and through credit unions. This seven unit program is FREE to schools and is used by hundreds of teachers in NC to meet financial literacy requirements.
Reality Fairs are another way NC educates their youth. Using a model similar to the "Real Money, Real World" program, students are given a random family and career choice along with their monthly income. Students are then required to visit tables or booths that provide various services such as banking, insurance, transportation, childcare, utilities and then the optional ones like entertainment and healthcare. Each student has to make purchases at each booth based on their income and needs. Several credit unions are engaged in this initiative and staff the fairs at schools throughout NC.
The NCCUL as well as credit unions are also involved with numerous community/statewide organizations including The Jump$tart Coalition and the NC Council on Economic Education. They also have several credit union individuals who were appointed by North Carolina’s Governor to serve on the NC Financial Literacy Council.
The NCCUL also has its own Financial Education Advisory Committee whose mission is to provide guidance and communication between chapters, CUs and the League in an effort to promote financial education and literacy initiatives of credit unions across all age groups.
Whaley says that NC credit unions have also taken the additional step of investing in young people by opening in-school branches across the state. To date, 10 branches are open in schools – one elementary, one middle school, and eight high school branches.
These credit union branches not only give students the opportunity to more easily develop good financial habits, but also provide job training to the nearly 80 students who operate the branches. By the end of 2010, 750 students statewide joined a credit union in-school branch and nearly 44,000 North Carolina students learned financial concepts that will serve them for a lifetime, while the credit unions surveyed spent more than $1.1 million (not including staff time) to provide financial education programs to North Carolinians in 2010.
“These efforts reflect the commitment of credit unions to empower the citizens of North Carolina with the skills needed to navigate a challenging economy … and build a better financial future,” contends Whaley.
According to Laura Richard, Marketing Manager, CFE has 4 high school branches operated by high school students which are opened in partnership with the school districts and are located on high school campuses. Each high school branch has its own specific debit card designed with student input. CFE provides training for the students so they can fully operate the branches with minimal oversight thus providing “real life” experience in the financial industry. “The high school branch program is a further investment of CFE’s ongoing commitment to ensure quality education and financial literacy in the schools,” explains Richard.
CFE has staff that conducts financial literacy presentations in local school classrooms reaching over 4,000 students annually. According to Nancy Lee Whitecavage, Manager of Public Relations, the credit union promotes its financial literacy presentations throughout the year at various school events and sponsorships, plus at back to school events and school district new employee orientation sessions. “We receive many requests for financial literacy throughout the year, but especially during the month of May, after standardized testing is completed in the school districts, and during the fall when college students are starting their first year as freshmen - in 2011, CFE delivered 246 presentations and reached a record 5,500 students,” explains Whitecavage.
In addition, CFE subscribes to CUNA’s Googolplex website for youth and offers BALANCE Financial Fitness to members, providing online, self-directed courses for teens and college students. They have special youth accounts with Fun Bucks incentives to encourage savings. There are 4 levels of youth accounts: Explorers – (0-11), Adventurers (12-14), Innovators (15-17), and Horizons (18-22). By saving diligently young CFE members can earn as much as $400 extra per year in dividends and bonuses.
Finally, CFE hosts an annual Youth Celebration promoting savings and credit union accounts. For the past 9 years, CFE has held a Youth promotion whereby students are invited to open a new savings account and CFE will match their first deposit up to $10 and receive a special gift. “The promotion usually starts with the CUNA Youth Week Celebration in April and continues for five weeks after - our branches look forward to this promotion every year and it is highly successful in bringing in new youth accounts,” says Richard.
At DuPont Community Credit Union (Waynesboro, VA), there is a full-time Financial Educator dedicated to teaching financial literacy to the young people in their local communities. According to Sarah Landram who fulfills this role of Financial Educator at DCCU, the credit union has been providing Financial Education for the past 12 years. “What started off as a position that conducted tours of branch offices and a few school visits each year has turned into a comprehensive program that promotes Financial Literacy in the communities we serve,” she explains. In 2011 the credit union taught 5,741 youth, ages 5-25. And, this information has been reported to the National Youth Involvement Board, an organization that was created to obtain input from individuals working in credit unions/leagues and to create a national system for the dissemination of information and resources regarding youth participation in the credit union movement.
Dupont’s program includes a variety of features to educate youth:
Provides outreach programs to schools, youth groups and other youth organizations.
Provides tours of credit union branch offices.
MileStones Youth Program - An internal youth program divided into five tiers designed with the unique styles of youth in mind. This program helps teach youth concepts like Saving, Spending, Sharing, Investing, Budgeting, and responsible borrowing.
Partners with other community leaders to provide financial literacy workshops.
Holds on-site education classes.
Offers seminars on different topics such as:
Checking accounts/debit cards
Financial Aid workshops
Reality Store Simulations
Credit Union Careers
For all of their youth-related work, DCCU has received 1st place honors in Virginia 4 years straight for the Desjardin Youth Education Award in competition sponsored by the Virginia Credit Union League as well as honorable mention at the national level twice. Moreover, it has helped them develop relationships with a long list of teachers and schools and most importantly, with their youth members at an early age. “As they navigate through the financial milestones of life they will always know they have a trusted financial institution they can rely on for all their banking needs,” contends Landram.
How Is Your CU Taking on Youth Financial Literacy?
You may be wondering what type of programs your credit union has in place for youth. It’s easy to find out. Simply, check out their website, read your newsletter, or inquire at a branch location. Also, keep your eyes and ears open for youth-related promos and incentives at your credit union as Credit Union Youth Week is just around the corner, beginning on April 22nd! If you’re not a credit union member but would like to belong to a financial institution that works hard to build a better tomorrow by educating today’s young people, find a credit union and join today.