By Gigi Hyland
In his recent op-ed, “Is All That Credit Union Financial Lit Taking Place at the Wrong Time?,” Frank Diekmann makes a lot of good points around financial education, particularly around the pressing need for it.
However, we at the National Credit Union Foundation agree with our RMJ Foundation colleague, Tena Lozano, that youth financial education is important to reach tomorrow’s adults. Credit union financial education is happening at the right time and place in the context of youth financial education. All the efforts Frank lists -- in addition to the Foundation’s Biz Kid$ program -- try to meet kids where they are in life to give them tools to make the smart decisions (or at the very least, know where to go to get good information) to achieve their financial goals.
It’s about effective financial education programs. Experiential learning – what Tena is doing and what we spearhead at the Foundation - is the process of making meaning from a direct experience. Research has shown (see the CFPB’s look at K through 12 education) that most people learn best through experiential learning, or “learning by doing,” which is why the Foundation supports Reality Fairs for teenagers and Retirement Fairs for adults.
The statistics Frank cites are terrifying from my perspective. And there are many other versions of those statistics that show things aren’t really improving. For a particularly interesting look at financial stress issues among young adults, check out Carlo De Bassa Scheresberg’s article, “Financial Literacy and Financial Behavior among Young Adults: Evidence and Implications (http://scholarcommons.usf.edu/numeracy/vol6/iss2/art5/).
A Lifetime Process
That said, we need to remember that helping people with their financial well-being is not a one-and-done proposition. It’s a lifetime process of learning. Sure, at 18, it’s unlikely you care about getting a mortgage. However, when you’re ready to consider one, do you know where to go/have a trusted adviser to ask to get the information you need to make a good decision? “Right time” financial education is critical. Separating all the noise about different financial life events is one of the biggest drivers for credit unions to do financial education at all stages of life, literally from diapers to Depends.
One of the keys to improving people’s financial well-being or financial health is understanding how consumers define their own financial well-being. Both the CFPB and CFSI have done great research to starting to get a handle on what this looks like. For credit unions, the research should be a jumping off point to really look at how a credit union delivers financial education to all of its members. We want people to choose credit unions as their best financial partner. Part of that vision becoming reality is to see life through the member’s eyes and provide the knowledge, products and programs they need to achieve their financial goals.
Whether it’s for kids or adults, you simply can’t do enough financial education. It’s in our DNA as credit unions and we have much work to do.
Gigi Hyland is executive director of the National Credit Union Foundation. For info: www.ncuf.coop.