By Frank J. Diekmann
Credit unions almost have more of a presence in high schools than those neon-green poster-boards covered in a rainbow of magic marker with messages for fundraisers or club meetings. CUs have full-time branches, part-time branches, student-run branches, and more “fin”-related initiatives than SeaWorld: fin lit, fin ed, fin videos, etc.
It appears no one in class is listening. If you’ve ever had a kid in school at just about any age, you know the response you get when you ask, “What did you learn today?” It’s always “nothing.” Kids go to school for 18 years, learn “nothing” everyday, and yet somehow at the end of the process have generally figured out how to read and write, sorry, text, to say nothing of trig and biology. And yet it’s pretty obvious that, indeed, many aren’t lyin’ when they say nothin’.
Credit union efforts at financial education and literacy are well intentioned and deserving of credit. But there’s an enormous disconnect taking place somewhere, and maybe it’s that the financial education is taking place too early. You’d think high school would be the ideal time to educate kids before they start heading out into the world and begin receiving their first pitches for credit cards. But let’s face it: most high schoolers don’t really believe any of it applies to them because 1) those household bills somehow mysteriously get paid, and 2) they all know they’re going to be rich anyway.
BizKid$ and Mad Money and even the Berenstain Bears are in on the action to help kids. At the high school level there’s a Googleplex of “reality” programs for students, including Reality Fairs and the Bite of Reality program from the Richard M. Johnson Foundation.
But it’s adults, including those well into middle age, who seem to be feeling the hardest bites.
Consider these realities:
- The GAO has found that roughly one-half of households heading into retirement have NO savings in a 401(k) or an IRA. Among households with members 55 and older, 29% have no retirement savings or pension plan.
- Bankrate.com found that more than a quarter of the U.S. population has not saved a DIME for emergency situations, and that two-thirds of Americans have saved less than the equivalent of six months’ worth of expenses for an emergency. This includes, by the way, those in the higher-income households of $75,000 or more annually.
- And, as CUToday.info reported recently, there’s this: the Federal Reserve reported recently that even though most Americans say they are feeling optimistic about their financial futures, a full-half say they don’t have enough money to cover a $400 expense. Four-hundred bucks. Today, it doesn’t take long for an expense to come to total that.
One-out-of-five in that same survey also said they are carrying some sort of “education debt.” I’d say there is a debt here in education, alright, and the figure is a lot higher than 20%.
I’m not sure which single word has appeared most often in CUToday.info, but setting aside “the,” “credit” and “union,” you wouldn’t be wrong to bet on “Millennial.” All the Millennial talk has had to do with how to reach and penetrate the market, often centering on which technology or social media app is best to reach Millennials “where they live.”
It’s apparent that where many are living is on thin financial ice. The oldest Millennials are in their mid-30s now, a prime life-point for making major financial decisions. But the Millennials aren’t alone out there; there are generations in front of them, including Boomers, who are also precariously sharing the ice with them.
Is it time to rethink where (and when) the CU financial literacy focus should be?
Frank J. Diekmann can be reached at Frank@CUToday.info.