Filling the financial literacy gap for younger generations
NCUA says credit unions have unique opportunity to educate their communities
Protecting the credit union system is one of the core goals of the National Credit Union Administration (NCUA), but Chairman Todd M. Harper wants credit unions to know that the NCUA is more than just a safety and soundness regulator. “We have consumer financial protection responsibilities and part of that work is promoting financial literacy—which is a core component of a credit union’s mission,” said Harper.
In 2021, the National Financial Educators Council asked 7,246 people in all 50 states to test their current financial knowledge. The results were broken down into various age groups, with 70% considered a pass. Of particular note were the scores for younger generations: 10- to 14-year-olds averaged 57.41%, 15- to 18-year-olds averaged 65.82%, and 19- to 24-year-olds averaged 71.11%.1 These results demonstrate the lack of financial literacy in younger generations as they approach and prepare for their young adult years. Harper wants to change that.
“An educated member is the best member,” said Harper. “When credit union members have a solid foundation of personal finance, they can make smarter financial decisions and that forms the basis of a more resilient credit union system.” Those educated consumers are better able to determine what is a safe, fair, and affordable financial product, he added.
Personal finance has been a focus for Harper throughout his life, and he maintains that it is never too early to start teaching children good financial habits. “When I was 7-years-old, my family moved to a new house and there was a candy store around the corner,” he said. “I received a weekly allowance of $2, which was a lot of money for a 7-year-old in 1974.” After spending all of his earnings on candy, he realized that there was nothing left to buy Christmas gifts for his parents. Rather than just giving Harper the money, the “bank of Mom and Dad” offered him a no interest loan for the money, and he paid it off at the rate of 50 cents per week for six months. “I am so grateful to my parents for teaching me about money at an early age,” he said.
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