Becoming debt free: Helping members achieve the new American Dream

A few weeks ago, Credit.com released the findings from a poll that they conducted recently. They asked Americans from different age and gender groups what they considered to be the American Dream. Overall, 27.9% of individuals considered it to be the ability to retire financially secure at the age of 65. The second most likely answer, at 23%, was the becoming debt-free. In the case of young americans between the ages of 18-24, their primary goal was becoming debt-free with retirement and home ownership taking a back seat.

Traditionally, the American dream has been viewed as the ability to go to college, buy a house and have a few children. As we watched college tuitions skyrocket, house values plummet and our friends and families struggle with employment, it makes sense that financial management would take a more primary role in our lives. Home ownership is being put off as young americans embrace the fact that being in a rental agreement gives them the option to pick up and move if they’re not able to find a job in their community.

What does this mean for credit unions?

For one thing, it means that we can expect that young members will wait longer to purchase their first home. When they do purchase their home, they most likely won’t borrow as much. We can start by providing them with information on grant programs and financial education about home ownership.

It also means that credit unions are in a position to do what they do best — look out for the best interest of their members by providing them with lower loan rates, lesser fees and opportunities for financial education. However, we need to do a better job of sharing this message. The news stories with industry-wide numbers help but they aren’t enough in our local communities. The message really gets across when we supplement the national discussion with specific numbers and member testimonials for our own credit unions. Here’s an example of what two credit unions in New York State have done:

  • GPO Federal Credit Union in Utica, NY has a $witch & $ave program which gives members a free, no-obligation loan analysis to see if the credit union can refinance any of their loans … saving members an average of $1,400 per loan. This year, 726 members participated in the switch and save program at GPO. This resulted in a member savings of over one million dollars with an average of $1,400 saved per loan!  Since launching the program, their credit union has refinanced over 6,200 higher rate loans, saving their members over $9 million to date.  Their goal? To save their members $10 million in 10 years. In addition, they offer members the SaveUp tool which encourages reducing debt and increasing savings while providing various prizes and incentives for participation.
  • In 2011, Oswego County Federal Credit Union appeared on Good Morning America’s Savings Makeover program to help an Oswego family reduce their debt. The credit union was able to refinance the family’s mortgage to save them over $33,000.  They currently give members access to The Big Picture, an online tool that gives members the ability to track their spending, set up spending targets and create goals online.

What is your credit union doing to help your members reach their goals of debt-freedom? How are you sharing this information with the rest of your members and throughout your community?

Francesca McFadden

Francesca McFadden

As the Marketing Specialist for Gates Chili Federal Credit Union, Francesca is responsible for the credit union’s communications, community involvement, business development and promotional efforts. In addition, she also ... Web: www.gateschilifcu.org Details