Invest In Financially Literate Youth

SIU Credit Union and A+ Federal Credit Union are among the credit unions teaching children to save at an early age.

 
 

American children, teens, and young adults are spending about $239 billion annually, an increase from 2009 despite the fact their average salary decreased during that time, according to a 2010 study by Harris Interactive, a New York-based consumer habits research firm.

Higher spending combined with lower incomes has led to debt problems among younger people, nearly two-thirds of whom carry debt. And nearly half of those youth are neglecting their payments, according to a survey done by Experian for USA Today.

Generating excitement about finance early and continuing children’s financial education throughout their school years might be one answer to young adults’ debt struggles. And credit unions like SIU Credit Union and A+ Federal Credit Union are offering those services to make a difference in their communities.

“Kids these days have so many options and they need to know what it takes to own these options,” says Kim Babington, vice president of operations at SIU Credit Union ($231M, Carbondale, IL). “We encourage children to start saving early.”

SIU Credit Union offers different accounts to its growing youth memberbase that offer competitive interest rates on savings, interest rate discounts on first auto loans, and access to Googleplex, an interactive website featuring games and mock situations geared toward encouraging financial literacy.

The credit union also offers a six-week, after-school program for sixth through eighth graders, teaching the preteens about credit cards, student loans, account management, and other financial subjects.

A+ Federal Credit Union ($906M, Austin, TX) promoting financial literacy at even younger age. It serves more than 30 elementary schools and opened 6,369 new accounts in central Texas with its Green Apple Club. Every month the credit union offers deposit days, where kids bring their money to school deposit it.

Kelsey Balcaitis, community education specialist at A+ FCU, says teaching kids about finance early gives them “an opportunity to see their money grow … and get hands on with money.”

A+ FCU also offers a youth financial summer camp. Youth from fourth grade to tenth grade spend a few days establishing goals, learning about debt, and playing games focused on real-world situations. A+ FCU started the summer camp last year, with 72 children enrolled. This year the number of kids attending increased to 117.  These programs encourage interactive participation and a chance to have fun with their friends while learning about savings and financial investments.

Paul Kurth, marketing manager at Central City Credit Union ($180M, Marshfield, WI), says the recession has underscored the importance of teaching children not to overextend themselves financially.

“My personal feeling is that we have to engrain that [financial literacy] in the kids before their first paycheck,” Kurth says.

Central City CU operates three in-school branches—both high school and elementary—that give in-class presentations to children on topics like budgeting, savings, and credit scores as well as offering continuing education for teachers. The credit unions’ presence in high schools has assisted teachers with lesson plans and created a financial literacy class that’s a prerequisite for graduation. It’s received a state-level 1st place Desjardin Award—a CUNA sponsored award to recognize credit unions’ achievements in youth financial education—three consecutive years.

Central City CU reaches 1,737 students at Steven’s Point Area High School, in Steven’s Point, Wis., with 10 student interns working each year for five credit hours per semester.

Nasonville Elementary, in Marshfield, Wis., is another partner and serves 307 students with a deposit-only credit union branch. Every week the branch is staffed by 10 sixth graders and supervised by a credit union employee. After four deposits, the children can play games for prizes, such as pencils, activity books, or financial resources.

Central City also launched an interactive, user-friendly platform, growyourgreen.com, which includes games and simulations focused on financial literacy. We want kids “to be ready for varying economic fluctuations,” Kurth says. He says increasingly volatile gas prices as an example of how children, teens, and young adults must plan for unseen circumstances.

Alternatives Federal Credit Union ($73.0M, Ithaca, NY) started its youth programs in high schools in 1990. Joe Cummins, community development educator, quickly realized the services were not working in the New York high schools, so he adapted the program for elementary and middle school children.

Cummins says the teenagers didn’t have any money to save or already had their financial habits established. The credit union also created a youth entrepreneurship program, which teaches the children how to create and sell products to earn money. With these programs several youngsters have saved money for new toys or clothes. One 8-year-old girl saved enough to buy a puppy.

“There’s a lot of opportunity with low-income families,” says Cummins. “We’re giving hope to those with no hope. We want these kids to have a savings account their whole lives, so they’ve never known a life without saving.”