Credit unions are top providers of best tactics to teach money management
PEWAUKEE, WI (May 20, 2014) — Credit unions—financial institutions that operate more than 100 branches inside Wisconsin schools and provide free instructional resources on personal finance to more than 350 Wisconsin teachers—are leading the way in deploying techniques that a new study says work best to increase youth financial capability.
The study, performed for the U.S. Treasury by the Corporation for Enterprise Development (CFED) and the Center for Financial Security at the University of Wisconsin-Madison (CFS), was conducted over two years among 4th and 5th grade students in Eau Claire, Wisconsin and Amarillo, Texas. It was a first-ever examination of its kind of the effectiveness of classroom financial education and in-school savings account access. It found that students receiving a combination of formal study and hands-on practice with money management:
· Succeeded in learning financial concepts. Even with as little as five hours of classroom instruction, knowledge gains persisted over one year.
· Developed positive attitudes about savings and financial institutions. More students believed that saving is “easy” and that financial institutions can help them.
· Were more likely to have a savings account and to save regularly than students lacking this access.
This is significant in that young people face greater challenges—including unprecedented costs for higher education and underemployment—to starting their lives on a productive financial path. Millennials ages 18-34, including those with higher incomes, have little in savings and have often turned to non-traditional financial service providers charging exorbitant fees. Last year alone, Wisconsin credit unions offered more than 300,000 hours of free financial counseling, lower-rate loan refinances and free financial education to reverse the damage caused in part by poor financial choices and too-little savings. A young person can save $117,000 over a lifetime simply by using a not-for-profit credit union instead of for-profit banks.
“More Wisconsin schools partner with credit unions than any other type of financial institution because of the trust inherent in working with a member-owned cooperative whose purpose is to improve the financial health of local people and communities,” said Wisconsin Credit Union League President & CEO Brett Thompson.
The Wisconsin credit union Scorecard, at www.theleague.coop/scorecard, explains how credit unions have saved their members more than $1 billion since 2007.
Credit unions are cooperative financial institutions that are owned by their members and do not have stockholders. Because they are not-for-profit, they return earnings to members via more competitive rates of return on accounts, lower interest on loans, lower fees and improved services. Around 2.4 million Wisconsin residents belong to credit unions, of which nearly half are open to the local community. Find a credit union to join by visiting www.asmarterchoice.org.