Teaching Smart Money Management: Supporting the Economic Recovery?
Helping members improve their personal economies could, in time, boost the nation's fiscal situation

By Laura Enock

July 14, 2009

Financial literacy will help the economy, according to CUES member David Mooney, president/CEO of $5.7 billion Alliant Credit Union, Chicago.

"Helping consumers become more financially literate will promote economic recovery," Mooney said at the first Global Financial Literacy Summit, held last month in Washington, D.C. Mooney believes that financially literate consumers will be better borrowers and savers, and also will contribute to tempered business and credit cycles-specifically by reducing excessive consumer borrowing, defaults and bankruptcies.

That's great news! While I think that helping members improve their own economic situation is plenty lofty a goal for your CU's financial literacy program, it would be great to see a collective improvement in CU members' personal financial management have a positive impact on the overall economy.

Teaching personal finance to members is a large task. Don't take it as a given that teaching smart money management will necessarily cause a change in their financial behavior. In addition to understanding money better, your members will need to take responsibility for their own mistakes, for what got them into their own financial mess (assuming they are in one) in the first place. Finding a way to bring that home is going to be a challenge.

What type of financial literacy initiatives will actually cause a change in the way your members handle their money? There's no easy answer to this question, but here are some ideas.

• Add an ongoing series of short articles to your newsletter that continually drive home financial concepts and financial responsibility.
• Reward members not for attending a financial literacy class or classes, but for actually making changes in their financial habits. Setting this up is no simple matter, but with some thought into what the biggest problems are for your members (irresponsible use of credit cards? not enough savings?), you can tackle those issues with a "frequent flyer" type of reward program. If you see members with too much debt, for example, you can offer miles or points for every debt that's paid off and closed. If you have members who don't tend to save, set up your program so every dollar saved earns a point. Points can be redeemed for a better dividend rate on an auto loan, travel, merchandise, or anything else you decide.
• E-mail marketing based on financial education could be an inexpensive way to keep these ideas at the front of members' minds. A short series of bite-sized bits of information is easier to digest. Make it interactive if possible.

There are many other ways to help members change habits. Once you've identified the habits you'd like members to shed and the new ones you'd like them to establish, get creative. Pull the marketing department together and start brainstorming for a fun, engaging, interactive campaign.

In the meantime, a goal that every credit union can achieve is financial literacy for the sake of improving each of your members' individual micro-economy. In time, the collective increase in financial literacy could help improve our national economy. That would be wonderful.

Laura M. Enock is CEO of CUVA and publisher of www.CUcontent.com, a newsletter and website content service for credit unions. She can be reached at laura@CUcontent.com.

• Go to the current issue of Credit Union Management magazine.