Teaching Smart Money Management: Personal Financial
Counseling
Is
this the best form of financial education?
By Laura Enock
CUES' Credit Union Management's Web-only "Teaching Smart Money Management" column runs the second Tuesday of each month.
Financial education comes in many forms. There's the standard classroom type format, and technology-driven "classes" given on line, or via e-mail or your Web site. Of course, there's printed materials, such as newsletters, brochures and even coloring books for kids. There are financial literacy events you can sponsor or participate in, or even create specifically for your members. The one common denominator for all these formats is that they address your membership as a whole.
But there's another financial education format that addresses the individual member. Many credit unions, whether they realize it or not, are actively involved in making it available to members. And that's personal counseling.
If members know they can come in and sit with a member services representative, loan officer or a dedicated financial education expert to have their questions answered, your credit union is providing, arguably, the very best form of financial education.
Why is it the best? Because just as financial challenges are personal in nature, the advice your member needs may be best offered personally as well. It's easy to sit in a class or read materials, and think, "Oh yeah, if only my husband/cousin/sister-in-law could hear that! I, of course, don't need to budget. I have my own system."
But if a thinking, feeling human being reviews my financial picture and tells me I'd better start budgeting, well, I'd have to at least acknowledge the fact that the advice is directed to me, and to me alone. It kind of forces me to face the facts. At that point, of course, I have a choice to make. Will I take responsibility and change my habits? Or will I choose not to? Either way, I can't just write it off as advice that's meant for someone else.
On the other hand, personal counseling is only worth something when (and if) members avail themselves of it. And while right now, in the midst of a recession, more members may be prone to do so, enough factors are out there to keep members from enjoying this highly personalized form of financial education. Some members may not visit branches very often, preferring to do most of their banking on line. Others may come in, but don't have the time or the interest in reviewing their personal financial details with someone at the credit union. Some members may feel they've "messed up" and are too self-conscious to share the details with a stranger. Sometimes it's a trust issue.
Hopefully, those who need it most will have no problem talking money management with your staff. For everyone else, however, you might want to consider a two-pronged approach: mainstream financial education and personal financial coaching.
That means personal financial consultations with members must be considered more than the beginning and end of financial education. Instead, consultations are offered as one piece of the plan, in conjunction with classes or some other form of mass education. This way, a member who doesn't come in to discuss his or her finances will still be learning the basics of smart money management through your Web site, newsletter or other media, while those who want to sit down with someone at the credit union can do so.
Mass education and counseling should be well-coordinated so there's no conflict in the message members are getting. Additionally, each financial education effort can mention the fact that counseling is available. At the same time, the financial literacy counselor(s) can mention other financial literacy efforts as a way for members to brush up on their skills.
All kinds of members; all kinds of needs. Personal counseling may be a wonderful form of financial education, but it doesn't meet the needs of all members at all times. Make it a part of your financial literacy efforts, but not the whole program.
Laura Enock is CEO of CUVA and publisher of www.CUcontent.com, a newsletter and Web site content service for credit unions.
- Go to the current issue of Credit Union Management magazine.
