If you’re a credit union, you don’t need to see statistics on why financial literacy counts. Financial education goes to the heart of the credit union mission – and it always has. But meeting the huge, evolving, diverse need for financial literacy calls for a new breed of tactics and tools. Here are just a few perspectives to consider: The need is massive. The cost of financial illiteracy is considerable, and it isn’t only measured in dollars and cents. A full 40 percent of low-to-moderate-income parents say their finances cause them significant stress, according to the Center for Financial Services Innovation’s Consumer Financial Health Study. Less than half (45 percent) say they have the skills and knowledge to manage their finances well, while only 16 percent say they’re highly satisfied with their present financial condition. A quick glance at financial education in the schools helps explain why: Only five of 50 U.S. states require high school students to take a personal finance class in order to graduate, according to the Council for Economic Education. More than one in six U.S. students fails to reach baseline skills in financial literacy. For community-minded credit unions, financial education goes beyond mission fulfillment: It addresses a gaping consumer need. Lifelong learning means opportunity is everywhere. Whether it’s elementary schoolers learning how to open and fund savings accounts or seniors getting schooled on the warning signs of elder abuse, every life stage now contains a variety of financial challenges. Likewise, there are a million ways to engage on these topics:
  • Go where the action is. The National Credit Union Foundation is reaching high school students through “Reality Fairs,” where teens experience what it’s like to live on a budget or be hounded for a rent check. THINK 15 prize winner Trevor Hallsstein won recognition for his idea to use libraries as community hubs for financial empowerment.
  • Seek out resources to refresh your content. The NCUF is currently developing an app to go along with its Reality Fair program, and that’s just one available resource for refreshing your approach. Check out Jump$tart.org or Currency Marketing’s It’s a Money Thing for fresh ideas.
  • Get your game on. Though attempts to “gamify” financial concepts are a mixed bag, we defy you not to yell at your screen when the ditzy singer in Celebrity Calamities uses her credit card to buy a yacht.
Our relationship with money is increasingly digital. Digital tools are revolutionizing our relationship with money -- from digital banking to mobile payments and beyond. So it’s only natural that these tools are becoming an educational platform. When digital tools can promote a smarter, more deliberate approach to money management, they go a long way toward enabling users to apply financial education in real life:
  • Mobile and online banking is starting to help users track financial goals, assess financial health, or receive alerts when problems might be arising. If your digital banking does not include a specific educational component, can you build one to go along with it?
  • Digital money management tools like CO-OP’s CardNav help users apply budgeting principles and stick to them by providing up-to-the-minute details on spending goals and activity. Unlike most users, digital money management tools don’t get distracted or make miscalculations.
  • Online articles, tutorials, webinars, calculators and widgets provide always-on, no-pressure access to needed information. Be creative: Visa offers Lunch Tracker, an app that calculates monthly lunch spending.
Experiential learning is impactful. Prize-linked savings, such as the Doorways to Dreams Fund, incentivize the practice of savings – taking lessons beyond theoretical value. Think also: rewards programs that recognize good credit behavior or automatic savings programs that build toward savings goals. Wherever the benefits of financial proficiency become real, lessons are driven home.