Lack of Financial Literacy Is Alarming, but Credit Unions Can Help

I’m a product of the 1980s, born before the advent of Google and the existence of smartphones, which provide the ability to easily download budget-tracking apps. Flipping through the pages of an encyclopedia was the 1980s version of Googling information, and it was a laborious process, as many of us may remember.

My childhood savings account was a cute, personalized piggy bank. I remember learning about the value of a penny, nickel, dime, quarter, dollar bill and five dollar bill, but not much beyond that. The extent of my financial literacy was knowing if I had enough change in my bank to purchase a candy bar from the convenience store down the street.

As I got older, I absorbed more financial knowledge by listening to my parents’ tense discussions about bills and how they were going to pay for certain things. Because of this, from an early age, money had a negative connotation attached to it in my mind.

In high school, I took an accounting class to learn how to write checks and balance my checkbook. Beyond that, no other classes were offered that taught students how to budget.

Even so, I got a job and saved up enough money to put a very small down payment on a 1988 rose-colored Toyota Camry. A week before my 16th birthday, the car was mine – with no assistance from my parents. With the money I made at my job as a barista at Blue Star Espresso in Tillamook, Ore., I paid for the majority of my school clothes and any fun extracurricular activities. My goal was to work enough to survive and pay for the things I needed, but I wasn’t thriving or saving any money. I managed to successfully spend every dollar I earned – my very first budgeting failure.

My parents and many of their peers had employee-sponsored pensions that they’ve been able to rely on, and as a result, teaching their kids how to budget for the long-term wasn’t much of a priority. Most of the people in my peer group have employee-sponsored 401(k) plans. However, a lot of companies don’t offer matching, so many employees are left to be solely responsible for the contributions. When you’re a spry 36-year-old millennial with dreams of world travel, it’s easy to forget the value of saving for retirement and maximizing your 401(k) contributions now.

Nowadays, with the amount of information we have access to, there’s no reason why we can’t educate ourselves about finances. Unfortunately, many of us are still lacking basic knowledge that can help us thrive financially. And because so many Americans’ future retirement funds are in question, the need for financial education and literacy is greater than ever. As proof, here are some eye-opening statistics from the Council for Economic Education:

• More than one in six students in the U.S. do not reach the baseline level of proficiency in financial literacy.
• Nearly one-quarter of millennials spend more than they earn.
• 67% of Gen Y members have less than three months of emergency funds saved.
• Since 2016, no additional states have added personal finance to their K-12 standards or requirements.
• Only one-third of states require their students to graduate having taken a personal finance class.
• Few states are ensuring that robust testing accompanies classroom instruction – only 16 states for economics and a mere seven for personal finance.

The $2.4 billion Canvas Credit Union based in Lone Tree, Colo., is trying to improve these statistics by educating Colorado youth. In 2017, Canvas teamed up with the Colorado Attorney General’s Office to bring MoneyWiser, a web-based financial learning resource provided by EVERFI, to fourth graders in Colorado schools. This digital curriculum makes learning about money fun, and uses interactive games while still meeting state and national standards.

Malcolm Johnson, director of public relations and community involvement at Canvas, said representatives from Canvas and the Colorado Attorney General’s office, along with someone from EVERFI, will show up at different schools and teach the children about the modules. “After we teach them about the modules, we come back and do a type of jeopardy game with the students, and we make it a big fun celebration. We give out certificates after they complete the program … it’s been beneficial to them, just to get fourth graders excited about financial education,” Johnson said.

Johnson said thus far, 25 elementary schools in Colorado have used the MoneyWiser program. Currently, 932 students are enrolled in the program, and those students have completed 965 modules. He said their goal is to have this program in every elementary school in Colorado.

“Often times finances can be a burden and hard to understand. What we really want to do is take that away and enable people to make the best choices they can, and have the best tools at their disposal so they can go live the amazing life that we know people can in Colorado,” Tansley Stearns, chief people and strategy officer at Canvas, said.

In addition to the MoneyWiser program, Canvas also offers free financial success seminars and free financial online learning programs.

“Our purpose and reason for existing in the world is to help people afford life, and we believe that’s got to start early and it has to happen often,” Stearns said.

Our country has a long way to go when it comes to improving financial literacy, but by educating community members through a program like MoneyWiser, credit unions can help make a difference. If your credit union isn’t already involved in a financial literacy program, now is the time. Use your staff’s expertise to help members of your community – of all ages – learn how to make their money work for them now and in the future.

Tahira Hayes is a correspondent-at-large for CU Times. She can be reached at thayes@cutimes.com.