Teaching Smart Money Management: Free Financial
Literacy Programs
Do
you get what you pay for?
By Laura Enock
Feb. 9, 2010
CUES' Credit Union Management's "Teaching Smart Money Management" column runs the second Tuesday of each month.
There are many, many financial literacy resources out there today, and many of them are free. But as is the case in any situation of abundance, the glut of free information and programs for your members has created a new scarcity: time and space. Sure, you can offer lots of financial education in all types of formats, but if you offer too much variety, it not only loses its value, it loses its ability to make a difference. So while you don't want to do nothing about financial literacy, you don't want to do everything either.
Many free, excellent programs are gaining popularity among credit unions and they all have some wonderful advantages. Does that mean you should jump on the bandwagon? Should the free programs supplement your existing programs? Should they replace them? Should you not bother with them at all and leave well enough alone? And most importantly, what results can you expect from a financial literacy program that people are just giving away?
It's hard to know what kinds of results you'll get from any program. By what criteria are results being measured? Through increased knowledge? Improved behaviors? Increased loyalty? The ultimate goal is more financially responsible members, but can that really be measured? And, is it the program that creates responsible behaviors, or is it the combination of a motivated member and a really good program? When a free financial literacy program crosses your desk, these are the questions you should be asking.
Meanwhile, the amount of available information keeps growing. And growing! While I've been saying—for a long time—that you should be doing something to promote financial literacy within your membership, and possibly a broader community, the problem with excess availability (especially when there are no costs involved) is that it can be tempting to do too much.
Don't fall into that trap. Instead, carefully evaluate any existing programs you already have in place. Are they working? Have people changed their behaviors because of them? Do your members use them? Do they like them?
If, in any way, your existing programs are falling short, carefully research the available options. If budget is an issue, definitely look at what's free. If budget is not an issue, look at what's free anyway. The idea that you get what you pay for is somewhat outdated. In today's world of Web sites and electronic resources, once a Web site or program is created, the cost of offering it to more people is minimal. There are other business models, such as an advertising-based model where advertisers pay to reach your audience and charge you nothing. In another model, a "premium" version is available at a cost, and the "basic" version is free. In this case, a few paying users make up for the many who receive the service for free.
For example, people sometimes ask me why we give basic memberships at CUcontent.com to small credit unions at no cost (usually through their leagues). They want to know: What's the catch? The answer is, once we've created it (and yes, the initial costs are staggering), why shouldn't a small credit union that can't pay for it benefit from it?
So don't assume a free resource is worth the price you pay. It's probably just as good as its expensive cousin. However, before deciding what to use, do your homework. Carefully research the options. Speak to credit unions that are currently using them. Don't just ask if they're happy with the programs. Ask the important questions. Are members using them? Can the credit union track usage? Are members changing their behavior because of them? These are all things you should expect from a financial literacy program, whether it's paid for or not.
Even if you're not paying for a financial literacy program, recognize the non-dollar costs that are involved in any project: time, energy, space, mindshare. Those are costs no less than hard dollar costs, and the currency may be available in a lot less abundance than even the smallest marketing budget.
Having said that, when you find a good program, use it. Bottom line, you need to do something to help your members handle their finances better. If the program you find you like best just happens to be free, well, who would complain about that?
Laura Enock is CEO of CUVA and publisher of www.CUcontent.com, a newsletter and Web site content service for credit unions.
