The following post was written by a friend and fellow Maine State CU employee, Dan Emery. He is a teller here at the credit union and has really stepped up in an effort to bring financial literacy to the front of our minds through research and connections.
Operating a successful business is anything but simple. It doesn’t matter what type of business you’re in, there are worries and challenges at every level. These include supply and demand, profit and loss, service standards, product standards, employees and payroll, the budget, change and improvement and the risks associated with decision-making. Before a business makes a decision it has to take into account the advantages and disadvantages of that decision. The litmus test for a decision is ultimately the bottom line; is it going to make money or will we lose money?
Credit unions deal with these same issues but we have a unique situation. Our litmus test for decisions is very simple; “Is this good for our members or is this bad for our members?”
Sometimes, to do what is best for our members we have to spend money that we may not recover in a typical sense, but it will help us gain loyal, long term members. Other times an opportunity presents itself that is beneficial to both the membership and the bottom line. This opportunity is Financial Education.
Here are a few statistics on financial literacy in our country today*:
- 15 million adults receive phone calls from collectors or are considering filing for bankruptcy.
- Only 2 in 10 keep track of their spending – regardless of gender, age or income
- Only 59% of young adults in Gen Y pay their bills on time
- The majority of Americans do not have a sufficient emergency fund (3 to 6 months of income saved)
- More than 76 million adults say they do not have retirement savings
These stats are only the tip of the iceberg. With a little research you will uncover MANY more shocking statistics like these. So what do we do about it?
We need to help these people take control of their finances! We need to teach them how to budget, spend responsibly, save, reduce debt and build assets. This should not be a one time class; this should be a multiple step process over an extended period of time. We need to create one on one relationships with our members. We should let them ask questions and then help guide them to determine their goals, wants and needs.
How will this benefit our members? Through this process we will build a bond with our members that will make them feel respected, empowered and comfortable and we will earn their trust on an entirely different level. They will gain an understanding of their finances that will give them control, hope and less stress. It is a great feeling to have control and an understanding of your finances.
So what does the credit union get in return? Most importantly we get happy members!
We will create a reputation that people find attractive and it will show we are truly worthy of their business. If we help one person take control of their finances they will tell others how well they’re doing and how it happened; our name will get mentioned and we will attract new, long term members.
Gaining new, financially educated members will result in new accounts, new loans, more loans paid on time, fewer overdrafts and bounced checks, higher balances and more frequent use of our services by more people.
Not only should we strive to educate our entire membership we should also strive to set ourselves apart service-wise. We should do our best to lower fees, raise rates and make our members feel like they’re a significant part of their credit union and not a customer.
A thorough financial education program is a solid, long term win-win situation for both the member and the credit union.
Maine State CU