Rewiring our approach

March 11, 2024 marked four years since the World Health Organization (WHO) declared  COVID-19 a global pandemic. Life as we knew it was rapidly changing before our eyes.

March 11, 2020 was the day Tom Hanks and Rita Wilson announced he had contracted the virus, which was a jarring moment for Americans who had spent the past few weeks confused about the severity of the pandemic. Many other public figures followed. This was the day that the NBA canceled the rest of its season and saw $8 billion in expected revenue vanish!

The markets reacted quickly to WHO’s declaration. By the end of the day, the DJIA was down more than 20% from its peak in February. Millions of people lost ground when it came to their earnings and wealth. The pandemic destroyed entire industries, birthed others, and transformed the rest. The pandemic exposed and exacerbated deep inequalities in financial health and physical healthcare, the labor force, and the broader economy. This period in time shifted how people make important financial decisions, identify goals in life, create wealth, and find happiness.

The formula previously recognized to achieve the American Dream was invalidated. Our vision for working hard, saving money, and planning ahead for the future as a way to create prosperity and wealth changed overnight. Post-COVID, people quickly developed a refined appreciation of the world around us.

But as the world around us changed so dramatically, did credit unions? Look inward and reflect.

We need to shift gears

Credit unions continue to build products, develop member engagement strategies, and lead our teams under the assumption that we know what people want and how they can achieve it. Many leaders in this space believe that if we simply “educate” people about their money, they’ll be financially healthy.

The realities of today’s environment prove that life is not linear, and credit unions cannot expect our traditional approaches to improve peoples’ financial health and happiness to work, particularly because:

• Things are far more costly than they were for decades prior;
• Technology has shaped the way we consume information; and
• Economic crises – including this pandemic – have led people to rethink what really matters in their life; what makes them happy.

Aren’t we back to the before times?

If you’re just looking at today’s headlines, you might be tempted to think that everything is just fine in Americans’ financial health and peoples’ happiness, because:

• The stock market is soaring;
• Unemployment is nearing an all-time low; and
• The U.S. is approaching one of the longest running economic expansions in history.

However, when you look beyond the headlines, you see that the picture is not as rosy:

• Total U.S. household debt is now above $17.5 trillion, higher than it was before the Great Recession;
• Baby Boomers are nearing retirement with a large retirement savings deficit; and
• Americans of all ages are buried under $1.75 trillion worth of student loan debt.

Clearly, there’s a disconnect between what we read and see, and how the realities of life impact peoples’ financial health and happiness.

Broader economic trends hit home

Even as the COVID-19 pandemic began to recede, Americans continued noticing rising prices throughout the economy, from groceries to gasoline, utility bills, and homes. Millions of people in the United States are still feeling the day-to-day crunch.

As a result, people are more financially vulnerable today than yesterday, and millions are living paycheck-to-paycheck; half of Baby Boomers and upwards of 73% of Millennials included.

We are all part of the team

Credit unions must rethink our approach, products and services, and the way we lead our teams to help people cope with the realities of life and to be – well, happy. Ultimately, that’s what people are seeking: financial health and happiness.

Financial Health Network research finds that 70% of the population – or 181 million people – are not financially healthy, despite the U.S. being the wealthiest country. People find it difficult to spend money, save money, borrow, and plan in ways that set themselves up for success in the future. And, the majority of people in America – 80% – are looking to their financial institutions to help improve their financial health, and in turn, generate greater levels of happiness.

When it comes to financial health and happiness, do credit unions have a solution? How are we defining members’ success? What are we measuring to make strategic decisions?

The metric that matters is financial health and it fits directly into the happiness equation. By understanding your members’ and employees’ financial health you can bring relevant solutions to the surface that help people be resilient, thrive, and achieve happiness.

Bridging financial health and happiness

Credit unions must rewire our thinking of how we create value for our economy and for our members. We all need to understand that the pursuit of happiness means something different today, and our approach must evolve. This spans all credit union services and how we engage with our teams.

Start with financial health measurement through Attune, and get into the conversation at EMERGE (btw, I’m emceeing!). Measuring financial health is a vital step to putting Financial Well-Being For All into practice and it’s the metric that we can take action on. Happiness follows financial health.

Being in the business of peoples’ financial health means being in the business of peoples’ happiness. And happiness is what people seek.