Creating financially healthy members has clear long-term benefits.
by. Christian Widhaim
Many young people reach adulthood lacking basic financial education and literacy skills. This can lead to poor credit scores and the inability to manage their money—sometimes even bankruptcy.
More than 75% of Americans live paycheck to paycheck with little or no emergency savings, according to a survey from bankrate.com. And a May 22, 2014, report from CBS News indicates that half of U.S. families that define themselves as middle-class say they struggle financially or feel poor.
A financial education void clearly exists which credit unions could—and should—help to fill. Financial education includes instruction about basic household finances, credit scores, debt management, and identity protection.
The average household credit card debt, while down from a previous high of $19,000 in 2008, still tops out at about $15,000, according to nerdwallet.com. This is especially significant as credit card debt is a major factor in consumers’ financial health as higher credit balances can be indicators of poor financial management skills.
A financially healthy member is one that understands the value of saving for future life events—both expected and unexpected. Another component is the ability to balance household finances and use credit wisely.continue reading »