Credit Unions Educating Youth, Investing in the Future
By Cyndi Cohen Credit Unions Online
The average score of nearly 76,900 U.S. high school students received in 2010 after taking the financial literacy assessment developed by the Treasury Department and Department of Education was only 70%. The results of 2011’s testing of about 84,000 students, and 2012’s, of nearly 80,000 students were just as disheartening at 69%.
Taking these scores into account, the following numbers should not be surprising:
$25,000: Average student loan debt for class of 2010 (The Project on Student Debt)
$1,800: Average credit card debt for those 20-29 (PNC financial independence survey)
12.4%: Unemployment rate for those 18-29 (BLS data)
13: States that require high school students to take a personal finance class (Survey of the States)
60%: 18 to 34 year-olds not keeping a budget (NFCC financial literacy survey)
Fortunately, credit unions worldwide recognize the scary reality of these numbers. They are committed not only to serving the financial needs of young people as they grow and enter their futures but also to offering the educational resources, knowledge, and tools to guide them there. They are working hard to ensure a bright future for today’s younger generation, for the world’s financial condition, and for the credit union movement.
For example, Numerica Credit Union‘s (Spokane Valley, WA) youth programs were established in the mid-2000s to offer services that teach their young members good financial habits they can continue through the rest of their lives. Tommy Destefano, Communications Specialist who oversees the credit union’s youth and students programs, said that these efforts support Numerica’s mission of helping people in their community through educating, donating and the countless hours they spend volunteering.
Credit Unions and Parents Must Join Forces
Credit unions are increasingly offering 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 and Z, offering special products, services, and financial literacy resources for kids, teens, and young adults.
However, while credit unions are doing their part, they are only one piece of the puzzle in shaping tomorrow’s financially literate members. It is imperative that they have the help and support of parents and grandparents who are also dedicated to this important cause.
According to USAToday.com, surveys show that parents have the greatest influence on a child's financial literacy, but many parents aren't fully equipped to deal with their own finances or are often too distracted with other issues associated with raising a child.
Ann Flannigan, VP of Public Relations for Washington State Employees Credit Union (WSECU) (Seattle, WA), said that teaching kids about money is an organizational priority for her credit union and members are on board. “They appreciate that we have resources for the entire family and think of them as a whole system -- we also regularly post tips on our Facebook page, including about how to talk to your kids about money.”
Starting Early, Beginning with the Basics
Research has shown that the earlier we start teaching our kids about the concept of money, the better, and many credit unions agree. When teaching children any skill (from teeth-brushing to shoe-tying) it is best to start with the basics and build upon that foundation. In doing so, credit unions aim to help youth obtain, learn about, and manage their first account, first credit card, first loan, and everything in between, in a responsible and knowledgeable fashion.
WSECU has some special products including two youth accounts. “Munny Bunny” is for children up to age 12 that encourages early saving by family members and the child. “We give them a plush bunny as well as a keepsake journal that includes tips and opportunities to record first financial milestones in the child’s life,” explains Flannigan. The second targeted account is called “JustU” for young adults 18-25 that also has some special features to get a newly independent adult started on the right foot.
Likewise, Numerica offers a Planet M Savings Club for kids under 12 years of age, Student TRAK Savings Accounts for those 13-23 years old and Student TRAK Checking Accounts for ages 16-23.
According to Destefano, Planet M members receive a savings punch card that when filled rewards the young member with $5 deposited into their account. They also benefit from a free quarterly newsletter, a birthday surprise, dividends every day with no minimum balance, a $5 minimum opening balance, and no monthly fees. For Student TRAK savings members there are no minimum balance requirements, no monthly service fees, dividends on all balances and unlimited withdrawals. For the Student TRAK checking, they receive a Visa Debit Card, online banking, overdraft protection, satellite teller services and the ability to write up to 10 checks per month with no charge.
“Another perk to being a Planet M or Student TRAK member is that we hold numerous events at local basketball games, hockey games, baseball games, museums, science centers, food banks and even ice skating,” added Destefano.
Abri Credit Union (Romeoville, IL) also has a savers program for very young members, but their main focus is on youth ages 16-25, with a program called “Identify.”
“Identify provides young adults with customized products like a checking account that offers them their choice of rewards and a Visa with a low spending limit to get started with credit,” said Kim Nichols, VP Marketing/Training.
The credit union, which has 2 branches in local high schools, also does real world simulations in the schools as well as budgeting seminars. “We find many young people don’t know basics like how to write a check or the difference between a debit card and credit card -- we wanted a safe environment for them to start their financial life to better prepare them for adulthood,” said Nichols.
Financial Literacy at its Best
In terms of financial literacy, WSECU is deeply committed to offering youth financial education and have an entire curriculum called “The Vault” that is a comprehensive set of lessons targeted at middle and high school students to be used in classroom or other group settings. “We have three Community Relations Coordinators that travel the state offering seminars and workshops, many of which are with school children using this material,” explained Flannigan. The topics include Saving & Investing, Getting Your Money’s Worth, Budgeting, and Managing Your Money. “We make it fun and interactive as well as have tied the lessons to other state learning standards so that teachers see the value of spending their classroom time on this important information -- we offer the lesson plans and workshops for free to anyone, and have sent the CD as far away as Africa,” added Flannigan.
Another way WSECU is helping Washington’s younger savers is by serving as a major partner of the state’s GEAR UP program, which identifies kids who otherwise might not be on the path to college and gives them support and the tools they need to get there, including financial education.
At Numerica they feel it is very important to educate today’s youth about budgeting, spending and saving since these are skills that young members can utilize for a lifetime, and can continue to enhance as their financial situations and lives change. “Financial literacy is a big problem in our country and a huge source of stress, so if we can help our young members, then we are helping the overall well-being of our communities and providing a very valuable service to ensure that they are financially savvy,” contended Destefano.
Building the Next Generation of Credit Union Members
Credit unions need to be an attractive alternative to young people. They need to speak their language and offer them services that are meaningful.
For example, with every new product or service WSECU is considering, they first think about how it will work on a mobile device. “Banking by phone is going to be the complete norm for Millennials and we have to meet that expectation,” said Flannigan. “A relationship that starts when you’re very young is likely to continue into adulthood which is good for the institution as the member moves into their borrowing years.”
Flannigan feels that credit unions have something powerful to offer young people, in terms of belonging to something meaningful that is free from the baggage of big banks. “It’s an exciting time in credit union land and WSECU is ready to bring younger, values-based consumers through our doors.”
At Numerica, they feel it’s important to attract young members since they are the future. “We value all of our members and treat them equally, but these younger members will be the ones making life-changing decisions within the next 5-10 years, obtaining driver’s licenses, purchasing vehicles, going to college, starting new jobs, buying homes, starting families, etc.,” said Destefano.
Nichols added that their young members force Abri to stay on top of the latest technology, which benefits the entire membership.
Are you a parent or grandparent who wants to give the gift of quality financial education to the young person in your life? Find a credit union and join the financial literacy crusade today!