Why Financial Education Matters
The case for improving the financial literacy for our youth has been, I believe, successfully made. We've probably all heard the figures that support the idea of improved financial education for teens-and even younger kids: Teens have access to and control over unprecedented sums of money in their daily lives. Today's average high school graduate will handle over a million-dollars in his or her lifetime. They can be deluged with offers for quick and easy credit, with no information on how to avoid devastating debt. More college students are forced out of school because of financial problems than drop out for academic problems.
But what makes the case for educating our youngsters about money even more than these facts and figures is taking a look at who we are as a society. We are a culture that cares about its kids. We try to provide a good education for every young person; we try to make sure no child is ignored when it comes to personal safety, having enough to eat, and having access to the things in a young life that can make a difference to the quality of that life later on.
Clearly, a key factor in the quality of life for our kids and the adults they will become is knowing how to set priorities on spending, control immediate gratification in favor of important goals, and balance income, spending and saving. Kids today need financial skills that go beyond having a quick draw on a credit card or check book.
Surveys show that about half the kids who have any financial education get it from their parents-and that is great as long as the parents are sharing good information. But the numbers also show that vast numbers of teens have little or no education in this area.
I challenge credit unions in every state to consider that their personal call is to do more in this area-and then more and more and more. Do it for the reasons mentioned above. Do it to cultivate your member base. Do it to show the world-your community, your lawmakers, the bankers--what the credit union difference is all about.
I ask you, who is better qualified or in a better position than credit unions to fill this vital role and teach these lessons? We are the financial services experts with a difference. We are well schooled in financial information and highly skilled as financial services providers. And the goal, in fact the driving force, behind our movement is service, not profit.
There are good strong models out there already to follow when starting or bolstering your efforts. Although I can only highlight a couple and tell you about the bare bones of their efforts in this space, two among them are in my home state of Texas and in Ohio. And there is a lot of good, free material available through CUNA's partnership with the National Endowment for Financial Education (NEFE), which offers the acclaimed High School Financial Planning Program.
At the Texas Credit Union League, we reformed the non-profit Texas Credit Union Foundation in 1995, which, among many other worthy causes, now establishes programs and issues grants for financial education. The programs provide a significant focus on youth. As part of its "Your State and Mine" campaign, the foundation forms partnerships with credit unions and other organizations to find ways to educate children and their families about the prudent use of money.
The foundation also goes on the road to conduct "train the trainer" sessions to teach attendees how to use the free NEFE materials to instruct kids about money. Foundation Associate Director Courtney Nickles says she holds around seven sessions each year in different major cities in the state, and that each session reaches about 25 trainers. They, in turn, can reach hundreds, even thousands, of young people.
Texas CUs also network with the Texas Jump$tart Coalition for Personal Financial Literacy to improve the personal financial skills of kids. The target of these programs was recently changed from grades K-12 to K-young adult to expand its reach to college students.
All this, Ms. Nickles says, is done "to encourage credit unions to implement financial education within their own communities." She adds that the Texas League and the Foundation strongly encourage CUs to report their educational efforts to the National Youth Involvement Board, formed in 1972 to create a national system for the dissemination of information about CU involvement in education. She said this information is a vital tool for political advocacy in the credit union movement.
In Ohio, there are 550 credit unions and more than 10% of them have made a commitment to financial education in their communities, according to Sue Helmreich, manager of outreach programs for the Ohio Credit Union System.
The Ohio Credit Union System in May will be holding its sixth annual Financial Education Summit where people join together from all over the state to talk about the successes and failures of their programs. Some CUs have programs that start as early as fourth grade where a CU rep shows up once a week to help with savings. At the junior high level, CUs talk about spending, warning kids that everyone wants their money and advising the youngsters to learn to make smart choices. For the high school crowd, the lessons focus around checking accounts, credit cards, planning a budget, and the effect a bad credit rating can have on one's life.
Columbus-area CUs have an interesting situation. That city, I believe, has the second highest population of immigrants from Somalia in this country-around 20,000. So in addition to translating youth education materials into Spanish to serve the Hispanic members of their community, materials have also been translated for Somali arrivals. The Columbus experience just underscores the fact that there is much to be done and many people to be reached by innovative credit unions.
I urge you to make this the year you shine the spotlight on youth education and on the difference credit unions make in peoples' lives.
Dick Ensweiler is Chairman of CUNA and President and CEO of the Texas Credit Union League. His comments are adapted from a forthcoming column in Savingteen.