CUs Making Financial Literacy Not Boring
Credit unions using tools like CashIQ to catch the attention of its millennial members. And it's working.
Which brings us to the next logical question: Is there a way to make financial literacy engaging, authentic and amusing?
The $616 million Merrimack Valley Credit Union reports it has successfully caught the attention of its millennial members by challenging them to test their financial smarts with CashIQ. The web-based and smart-phone friendly PlayCashIQ.com features quizzes, designed to test members’ acumen on nine financial topics and with chances to win cash and prizes, including discounts on financial products and services.
During a soft roll out of CashIQ in August, among MVCU’s members who completed 1400 quizzes in less than two weeks, more than 80% reported to be Millennials.
“Our goal in starting this project was to find a more innovative way to engage our members, especially our Millennial members and to teach them much needed financial literacy skills in a way that is fun and that they would retain,” Yean-Ai Long, marketing vice president for the Lawrence, Mass.-based credit union, said. “We want to also establish that we have the financial expertise to help our members that will differentiate ourselves as a credit union from some of our bigger competitors out there.”
With CashIQ, members and non-members are invited to take 10 multiple choice and true or false quiz questions in nine financial categories, budgeting and savings, credit score and credit cards, auto loans, student loans, personal loans, mortgages, retirement and life happens. The Life Happens category quizzes millennials about getting married and having kids. Did you know, for example, that the average cost of a wedding is $33,000 and the average cost to raise one child is more than $233,000, which excludes college tuition? Perhaps the sticker shock of getting married and having children explains why 30% of Millennials are postponing marriage because they feel like they are not financially ready, according to Pew Research.
Be that as it may, the Life Happens category is one of the least popular categories along with retirement as young people are decades away from their Golden Years, and they may not be making enough yet to set aside some money or their employer may not offer a retirement plan.
The most popular quizzes, in ranking order, are budgeting and savings, credit score and credit cards, auto loans and student loans.
“They (members) get to compare their scores with other people taking the quizzes, and they know how well they’re doing,” Long said. “The nice thing is that we also reward these people, especially our field of membership.”
Players are awarded 10 points for each correct answer. Once they accumulate enough points from multiple quizzes, they can redeem points for prizes from MVCU, including a $25 credit when opening a new checking or savings account; a $100 gift card when financing a student loan; $100 to $200 cash back on an auto, watercraft or leisure vehicle loans; a no-obligation financial check-up with a licensed financial advisor, and up to $510 credit toward an appraisal for a home mortgage.
Additionally, every entry is entered into a raffle. A $50 prize is drawn every two weeks with a $500 grand prize in the final drawing. The CashIQ promotion runs through Nov. 16.
The questions developed for the quizzes were based on the latest research on financial literacy. For each category, 20 questions were initially developed and a committee, which included Millennial members, made the final selection of questions.
In addition to learning more about finances and how to manage money, Long said CashIQ is a good way for Millennials to get started on the right track and to get help from Merrimack Valley whenever they need it.
Research indicates there is a huge need for financial literacy among Millennials, and they are looking for resources to help them with managing their finances.
Since less than 25% of them have taken some form of financial education, according to the National Endowment for Financial Education in Denver, four out of five Millennials were unable to answer basic financial literacy questions on credit scores, compound interest, credit card interest, budgeting and investing, so revealed research released by Mass Mutual Foundation in June.
“The survey results underscore that many young adults lack the basic financial knowledge needed to make informed choices and there is a critical and growing need for youth financial education,” Dennis Duquette, president of the MassMutual Foundation, said.
What’s more, research shows Millennials are well aware of their financial illiteracy, and they are seeking help. A 2013 Yahoo Entertainment Study showed that 45% of Millennials are looking for resources, people and books to help them get through a financial crisis, and 44% are searching for online resources to help them transition to become a responsible adult, which undoubtedly includes managing personal finances. The National Endowment for Financial Education also reported that most young people know they are saddled with too much debt and many are unsatisfied with their financial condition.
Long pointed out that delivering financial literacy programs to members and students has been a long-running passion of Merrimack President/CEO Peter Matthews.
“In Massachusetts, there is no educational requirement for high school students to complete a financial literacy class, so he’s been working behind the scenes for years to try to get the state legislature to pass a law requiring high school students to take a mandatory class,” she said. “That’s still in the works and it’s something that’s near and dear to him, which obviously permeates the rest of the credit union. We do a lot of financial literacy. We do money management seminars. We do FICO score seminars. It’s not just for our members, but we go outside to local colleges and high schools.”
Initially, the credit union was thinking about replicating a highly successful financial literacy program that simulated real life scenarios for high schoolers and expanding it as a program event for Merrimack’s Millennial members.
However, the credit union’s ad agency, wedü in Manchester, N.H., pointed out that a program event would maybe draw two or three hundred people, but that a web-based financial literacy quiz format could be promoted through social media channels that would reach and attract far more Millennials. After all, 88% of Millennials are on at least one social media channel and more than 98% own a smart phone, according to wedü.
“We’re glad we did it this way because we’ve had about 1400 completed quizzes so far, and we just rolled it out on a soft roll out less than two weeks ago,” Long said.
Moreover, 82% of the quiz takers were Millennials.
This high engagement rate may be attributed to the simple fact that most people have fun experiences when taking quizzes while also learning something about themselves.
Jason Clark, CEO of BTR Sales, Marketing and Culture Consulting in Pocatello, Idaho,
wrote in a blog post for Marketo, a San Mateo, Calif.-based marketing firm, that Sherry Turkle, an MIT psychologist and cultural analyst, observed that people turn to quizzes because of their irresistible need to quantify the human condition.
“Basically, we’re trying to get a number,” she reportedly told Wired magazine. “(People will) use a quiz to get the number. It gives people something to look at, an object to think with. I think these quizzes are a kind of focus for attention for thinking about yourself.”
Clark also thinks quizzes can be a great way to leverage content marketing to promote products and services.
“Your ultimate goal with content marketing is to delight your audience, and quizzes can accomplish this in big ways,” he wrote. “They are fun, interactive, pieces of content that allow people to learn something about themselves and start conversations with their friends.”
That’s hard to say about a lot of other forms of content, he noted.