On their first day of participation in the Fun in the Sun financial literacy program, students must decide whether to put the pretend money they earn into a bank account. The first year the program was held, many of the 200 students were wary of entrusting their money to a bank, but the next summer, several repeat participants eagerly told their peers about the benefits of doing just that.
"When a sixth-grader tells their friend that they should put their money in a bank because it's FDIC insured up to $250,000, then you know things are really sticking," says Brianna Aguilar, the financial education coordinator for the program's sponsor, Montecito Bank & Trust in Santa Barbara, Calif.
This will be the third summer that the $1 billion-asset Montecito Bank is offering Fun in the Sun to select third through sixth graders in the Santa Barbara area who are at or below the poverty line.
During the six-session course, students learn how to spend and manage money, how to understand the difference between needs and wants, and how banks and other financial services work. The parents of these students also take part in financial literacy courses during the same summer stretch.
While the course is offered in partnership with the United Way, all the sessions are led by the 80 Montecito Bank employees trained to teach the course.
Fun in the Sun is part of a larger financial literacy initiative that Montecito Bank started three years ago in the wake of the financial crisis. Janet Garufis, Montecito's CEO, says that the first step was simply holding a forum on the economy and financial literacy. When she saw the packed house that the forum drew, she was certain that there was a demand for more financial education.
"We were getting a lot of wacky questions, like 'can I see my money?' and we thought we needed to increase the level of understanding in the community of how banks work and how money is managed," Garufis says.
In addition to its summer outreach, the bank has a financial literacy program that it developed to be used in school curriculums. During the school year, bank employees help high schools train teachers to give the lessons.
Volunteers from the bank also work with Partners in Education, a career development program in Santa Barbara, teaching students about marketing, economics and financial analytics.
After being schooled in financial education, participants of all of the programs are encouraged to open real bank accounts, either of the no-minimum-balance California Saves variety or a student checking account.
This all-encompassing approach to financial literacy, and particularly the summer program for at-risk youth, earned Montecito Bank a Financial Education award from the American Bankers Association this past fall. What is so notable about Montecito Bank's program is that it has "replicable elements," allowing other banks to implement it in their own communities, according to Lisa Mensah, the executive director of the Aspen Institute's Initiative on Financial Security and the primary judge for the ABA award. She also was impressed by the scope of the initiative, especially because it also gets parents involved in financial literacy.
"Many people can reach students at their desk because they are required to be there by law, but reaching the parents is much harder," Mensah says. "And Montecito has taken very pragmatic and practical approach to reach them."
Another unusual aspect of Montecito Bank's initiative, particularly for a bank of its size, is that its executives created a dedicated staff position focused on financial literacy. Garufis says that while the upfront cost of such a move may seem daunting to many small banks, she feels it's worth every penny in the long run.
"The primary reason we have dedicated this much time and resources and training," Garufis explains, "is that we really believe that if the community is more financially literate, we will have more economic stability and more economic soundness and be better able to weather the next financial storm we go through."