March 9, 2010

Credit Union Management’s Web-only “Teaching Smart Money Management” column runs the second Tuesday of every month.

According to the Credit Union National Association, there were more than 700 credit union branches in schools and youth clubs in 34 states last year. And that represents some rapid growth. Since 2007, the number of student-run branches has increased by one-third.

While student-run credit unions sound like a great idea, Sandy Wheat, executive director of the North Carolina Council on Economic Education, says they won't solve financial illiteracy. The credit unions are used by only a tiny fraction of high school students, she says, and implementing such programs nationwide poses big challenges.

Besides clubs and branches, some credit unions are developing their own financial education programs and bringing them into classrooms. Educators increasingly recognize the need for financial skills as they teach a generation that has more access to cash and such financial tools as credit cards than any other before it.

The proof on financial education is in the results decades down the road (did students who participated in financial education classes develop better financial habits? Are they more prepared for retirement, with healthy savings and no debt?). And these days, the classroom setting may not be the most effective one.

There are other ways kids (and adults!) can learn about money; and they certainly seem more exciting. Take videos, for example. Foolproof has based its program on “modules” that credit unions can buy into. The Virginia Credit Union League launched a state-wide initiative through 10 sponsoring credit unions using these engaging videos the credit unions post on their Web sites. Other initiatives using video involve contests, where contestants submit videos they create.

The question, of course, is “What is most effective?”

Somehow going into the schools seems more correct, the “real” way to teach financial concepts. If you can reach a whole grade of high school students in your community, well, why not make them your captive audience?

And yet, if videos are done well, if they’re really “viral” and “cool,” then posting it to your credit union’s Web site, or even just to YouTube, means they’ll be viewed multiple times by thousands of people, and that can really get the message across.

There are other channels too. Songs. Short articles in your credit union’s newsletter. Longer articles on your Web site. At CUcontent.com, we’re seeing a greater request for content that can be posted to Facebook, Twitter and other social media sites. So, yes, social media has become a medium for financial education, too.

I’m going to venture a guess that video is where financial education is headed. More engaging than print and so easily accessible today--anyone with a decent camera can produce a pretty good video. Today’s young people are also quick to open a link to a video sent by a friend.

But don’t lose the message to the medium. As with any financial literacy program, set goals. See to it that the videos are not just fun and entertaining, but educational too. You want the message to be absorbed, to be remembered and, hopefully, to be passed onto others. The basic lessons of finance are simple. Spend within your means. Borrow responsibly. Balance your accounts. Budget. Save for retirement. Conveying that message, however, is anything but simple.
 
Try a program such as Foolproof or come up with your own videos. Or, given your membership, you may decide to stick with print, e-mail or even classroom learning. Whatever it is, recognize the power—and the limitations--of each medium when conveying the message of financial responsibility.

Laura Enock is CEO of CUVA and publisher of www.CUcontent.com, a newsletter and Web site content service for credit unions.