Do You Offer Financial Education for the Right Reasons?

Is your first priority to increase business or to improve members' lives?

October 04, 2010
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Far-reaching impact

Even for those who are now investing in training to learn new skills, the impact of the recession is far reaching. A Labor Department study of 160,000 laid-off workers in 12 states between 2003 and 2005—a time of economic expansion—showed that those who went through job retraining wound up earning little more than those who didn’t, even three or four years out.

Discouraging? You bet.

Against this backdrop it's apparent the need for money management skills is at an all-time high, and there are those who say financial education programs don’t work. But can you afford not to offer them?

Among the reasons cited that financial education doesn’t work—well, it’s often not timely. Knowing how to shop for a mortgage isn’t relevant to a 16-year-old.

Others say no one is doing a good job of measuring results. Just because you put on a seminar and 25 people attend doesn’t mean they walked away with an improved ability to understand today’s complex financial world or that they’ll improve their financial behavior.

There’s no question that it’s hard to prove financial education programs work. Just ask the JumpStart Coalition, which has been measuring financial education results in high schools for years and reporting little improvement.

As CUNA’s 2010-2011 Environmental Scan says, “Evaluations of financial education programs confirm that we don’t yet understand what works for whom in what circumstances, or how or why it works.”

There are indeed legitimate and valid questions and concerns about financial education. But does that mean you stop trying? No. We cannot afford to give up.

But let’s circle back to the start of this column. What if part of the problem concerns the desired outcomes credit unions are trying to achieve.

Granted, our snapshot survey is telling, only in that it provides an attitude that may be in need of adjustment.

Is it really in the members’ best interests to increase online activity or to borrow more money? Shouldn’t members’ needs top all your concerns?

Shouldn’t the order of those responses above have been exactly the opposite? And don’t you think there’s a strong probability that financially capable members will use more of your services, borrow more, and increase online banking activity?

Next time you think about your member education program—you know the one that only about a third of credit unions dedicate even a single full-time equivalent employee to—ask yourself what or whom you want to help first: your member or your credit union.

JAMES HANSON is vice president of the CUNA’s business to consumer publishing department. Contact him at 608-231-4080.

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