Young members are the lifeblood of your credit union. And while study after study shows that parents are kids’ primary source of financial information, it is also credit unions’ responsibility to teach youth and young adult members how to manage their money in order to improve the financial literacy and astuteness of future generations.
From developing a workable spending and savings plan, to getting out of debt, to buying a home, credit unions can provide members access to free (or low-cost) and confidential financial counseling programs. Most, if not all credit unions provide some type of financial counseling. Informal financial counseling occurs when a member works with the credit union’s member service representative or loan officer to solve problems or set a course of action during the process of conducting regular credit union business. Formal financial counseling is made available to members at the credit union via certified professional financial counselors, via telephone using a toll-free information line, and at off-site credit counseling agencies.
A report from CUNA’s National Financial Literacy Summit in September 2006 devoted an entire chapter to serving the unbanked and underserved, noting that these “markets have a great need for financial education, particularly if these consumers are to break out of the cycle of debt. Remedial programs focus on helping people reduce their debt service burdens and address outstanding concerns about credit problems. But even more important is the need to help these markets build wealth.” Programs that address issues such as how to accumulate money for a down payment on a home, how to pay for education, and how to save for retirement should be among the top priorities for these consumers. However, the need for financial education among many low-wealth consumers is oftentimes much more basic, such as how to avoid predatory lenders, and how to minimize the cost of check-cashing and prepaid debit card accounts.