By Ray Birch
ONTARIO, Calif.—April is Financial Literacy For Youth Month, when credit unions step up efforts to educate young people about the value of managing their finances. But in the longer term, as those kids grow into adults, is there any way to measure what credit unions might be getting out of their work this month and all year long?
Should it even matter?
Experts say credit unions are simply fulfilling their mission as financial literacy stewards, but also acknowledge that data, such as the number of youth who join credit unions as a result, is lacking. However, the education provided, those same sources say, is done in the belief it will have a positive impact on the financial lives of the country’s next workforce and the economy.
“As far as metrics on whether those 14-year-olds who go through a reality fair become a credit union member when they are 24, I don’t think credit unions keep that kind of data,” said Tena Lozano, executive director for the Richard Myles Johnson Foundation, which provides financial education resources for credit unions in California and Nevada.'
Reality Fairs
“What I do know is these financial education events credit unions hold are often kids’ first interaction with any financial institution,” continued Lozano. “I believe they make a big impression on those kids. Now, do I have numbers? No. Do I think credit unions keep those kinds of numbers? No. It’s a pretty long-term effort to track whether credit unions make members out of the students, and it could be an expensive proposition. Also, I believe there are privacy laws for minors preventing that type of measurement.”
Daniel Brown, national program director at the National Credit Union Foundation (NCUF), agrees that it’s difficult to track the bottom-line impact to the credit union from financial educational efforts. But she said the NCUF knows that more than 100,000 kids participated in credit union reality fairs in 2017, and those have a qualitative payoff.
Reality fairs are events in which kids go through a life simulation, managing their monthly budget and household balance sheets.
“Possibly, those credit unions that have in-school branches have a better ability to track this,” said Brown, who contends tracking whether a young adult becomes a credit union member is not the same process as measuring whether an adult joined the credit union following a community financial literacy event. “Overall, I think credit unions offer youth financial education altruistically. They do it more as a part of their mission.”
Lozano said that these altruistic efforts do have a positive return for credit unions, not only raising awareness of the CU within the community and showing its commitment to youth, but making young adults smarter financially and therefore more likely to choose a credit union when it’s time to pick an FI.
“If kids are financially savvy, many will choose a credit union over a bank,” said Lozano. “Plus, when they go through one of these credit union programs and have a positive experience, consciously or subconsciously they remember that positive experience when they need their first checking account.”
Tracking Learing
Brown said that what is tracked from reality fairs is whether kids learned anything.
“Through pre- and post-testing at the fairs we find that most kids walk away knowing much more about finances than before the event,” said Brown. “We show the bar has been moved.”
Brown said that National Credit Union Foundation-supported Biz Kids, the award-winning financial education TV show for kids backed by a curriculum series and website, has had a similar impact on young adults. Since the series launched in 2008, it has reached more than 77-million viewers and more than 11-million parents, educators, and students, Brown said.
Lozano said that the Richard Myles Johnson Foundation’s Bite of Reality program in 2017 reached more than 16,000 students through the efforts of CUs in California and Nevada.
“A couple of years ago we introduced an app for the program, so instead of credit unions handing out packets of paper and pencils they now have kids download the Bite of Reality app to their phones,” said Lozano.
She said that the face-to-face interaction at the live event is not reduced by the app—the app just makes the program fun and more relevant to kids.
“They are interacting via their phone as opposed to carrying a calculator, pencils and a pack of papers,” Lozano explained.
Better Than Classroom
Both Lozano and Brown feel the reality fairs have a real impact on kids as opposed to a classroom program.
“The reality fairs work because kids are not sitting in a classroom being lectured to,” said Lozano. “We are putting them through simulations that are making them take on the role of an adult. We set them up to fail. We want them to run out of money by the end of the program, because we want them to have that experience. We want them to be talked into making a purchase they can’t afford, and to understand how that can impact their financial lives. You can’t do that kind of program online, it has to be in person.”
Brown said that more of the programs the NCUF offers now have a digital aspect to them as well as an element of “fun.”
“We want to be very intentional in how we approach kids,” she said. “We want to approach them in a manner in which they will absorb the information they learn. Through Biz Kids young adults learn by having fun, so the concept of ‘edutainment,’ being educated while being entertained.”
Brown added that gamification of financial education is important as well.
“We have developed a game for kids to play on the Biz Kids website,” said Brown. “They are learning through gamification—kids often don’t realize they are learning. They’re just having fun.”
More Focus Today
In assessing the current state of youth financial literacy, Brown said it’s difficult to say whether youth are more financially savvy today than they were 10 years ago.
“What I can say is that there is a greater focus on financial literacy for kids today, and that is due in part to just a greater focus on financial literacy for all consumers since the Great Recession,” Brown said. “Are credit unions benefitting from this? Certainly, despite it being difficult to measure. But most important, youth financial literacy is just the right thing to do and we are all better for it.”