Young Members 'Freezing' You Out? What 1 CU Has Done

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Why don't younger members join the credit union? It's unlikely they've heard about it from their parents, suggested one person. In fact, it's unlikely they've gotten much financial direction at all.

Amy Wisilosky, vice president of marketing for Virginia Beach Schools FCU, told attendees at an educational session at CUES' convention only 32% of parents talk to their children about personal finances.

"This is what is freezing us out," she said. "They are not learning from their parents and they are not taught in schools. It is scary."

Not surprisingly, given the dearth of financial education they receive, Americans display appalling ignorance when it comes to their checkbooks. Wisilosky said 43% of adults at the lowest level of financial literacy live in poverty, 50% of people in the U.S. live paycheck to paycheck, 40% live beyond their means, and over 1.5 million filed for bankruptcy in 2002.

The view over the horizon isn't much better: more young adults filed for bankruptcy than graduated from college in 2001-02. About 70% of college students have at least one credit card, and 20% of them owe more than $10,000.

One more cautionary statistic: 33% of high school seniors already use credit cards.

"The credit card companies are making a lot of money on these kids," said Wisilosky. "Most college students are not working, and most graduate in debt already with their tuition. Now, they are adding credit card debt."

Which is precisely why CUs should jump in, she said.

"This is what credit unions do: people helping people. We're all about giving back to the community," declared Wisilosky, who was the 2004-05 volunteer of the year for Virginia Beach City Public Schools.

Getting Started

Once a credit union's financial literacy program "gets the ball rolling, it can't be stopped," Wisilosky said. The important thing is to get it started. She recommends designating a financial literacy specialist, or perhaps a committee, depending on the size of the credit union. Once the credit union is ready, it can partner with other CUs in its area, as well as with its state league.

"Directors can't just go back to their credit union and tell them to get out to the schools the next day. Be sure to support the financial literacy specialist."

CUs should start with their local PTA, and send letters signed by a board member to the principal of each local school. Wisilosky advised not to overlook home schooling programs, special education, juvenile detention centers under local school jurisdiction, centers for pregnant teens, and academic clubs such as DECA (Delta Epsilon Chi Association, for marketing students) and FBLA (Future Business Leaders of America).

The cost of a financial literacy program is minimal, she said. A CU has to be willing to allow its financial literacy specialist to take the time to visit schools three to four times per month, plus serve on school committees. Many materials are available for free on the Internet, or through government agencies and private organizations that promote the cause.

For example, the U.S. Department of Agriculture (USDA) sponsors the Cooperative Extension Financial Security in Later Life National Initiative, which counsels people to "plan, act, evaluate and achieve" financial security. The National Endowment for Financial Education (NEFE) works with America's Credit Unions and the Cooperative Extension System to sponsor the NEFE High School Financial Planning Program. The New York City-based National Council on Economic Education (NCEE) has a network of state councils and university-based centers to provide information to schools.

"The more information credit unions give away, the more valuable it becomes," said Wisilosky. "And most of this information is free to credit unions. When I go to schools, I make sure to give the kids something to pass on to their parents. One popular topic these days is phishing. Call the Federal Reserve, and they'll send free packages of shredded money-the kids love it."

The Payoff

Financial literacy programs benefit CUs in multiple ways, she said. They generate positive public relations in the community, create "evangelists" for the credit union and, eventually, bring a return on investment in the form of new members.

"Who likes to see their credit union's name in print? Everyone. Who reads the local newspaper? Everybody-adults, kids, members and potential members. Not many credit unions can afford a dedicated public relations staff member or a PR agency, but teaching financial literacy in schools generates articles in the newspaper."

Wisilosky cited the work of Jackie Huba, who spoke at the CUES Nexus conference in San Diego in April, as a "must read" for all credit unions. Huba emphasizes the importance of creating evangelists, or loyal customers who become a volunteer sales force for a company.

"An evangelist is someone who tells everybody how great their credit union is," said Wisilosky. "Many credit unions offer free credit check-ups. They pull a member's credit report for free and talk to [him or her] about [his or her] credit score and how to improve it. People love it, and they bring their friends and tell others. Our members have gone through the roof over our financial literacy program."

"One way to create loyal members is to offer them financial literacy. It shows the credit union cares about them," she added.

The aging of the Baby Boomer generation has been well chronicled, but Wisilosky said CUs still need to get in touch with the next generation of kids coming up. To get their attention later, CUs must get their attention now.

"Part of that is being a trusted financial advisor. Credit unions won't see an immediate 'Bam!' of ROI, it takes time."

The Michigan CU League is doing great things with youth programs, and recently developed a "youth loan manual" she said. "If a credit union gives a young person his or her first loan, they'll come back."

American teenagers have money, and they are spending it on cell phones, meals out and gadgets galore. One thing they are not doing is saving, a place CUs can help. Credit unions must find a way to get into the schools, which will generate buzz, she said.

Talk Tips

When a CU is ready to send its financial literacy representative out into the field, Wisilosky offered several recommendations for the presentations.

First, talk to the teacher before the visit to gauge the learning needs of the children, then bring age-appropriate materials. Second, understand the lingo of today's schools to ensure credibility. Third, make it fun-allow the kids to read and role-play.

Two things to avoid: don't try to schedule classroom visits in September or October, when the teachers are trying to get school started. Instead, target November through February.

And above all else, she said: "Do not use the financial literacy program to advertise in the classroom. Schools are clamping down on who they let in there."

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