By Quentrece Smith, Senior Vice President of Member Experience, Ascend Federal Credit Union.
Youth financial literacy is often associated with life’s earliest milestone moments: getting a first paycheck or buying a first car, for example. However, at Ascend Federal Credit Union, we’ve found that the foundation for positive financial habits is built behind the scenes before young people even enter their teenage years.
Research conducted by the Consumer Financial Protection Bureau found that financial habits begin to form between ages 6 and 12, while underlying planning and self-control skills emerge as early as age 3. This means by the time a young person becomes a teenager, their attitudes toward money are already taking shape.
At Ascend, our annual April Youth Month promotion is open to members 17 and younger. We’ve found that we must adapt the experience to best cater to a range of financial life stages. Some youth members may be setting up their first savings account to deposit lemonade stand money, while others could be saving for college. No matter the case, credit unions are uniquely responsible for ensuring our members, of all ages, are properly informed. We play an integral role in promoting financial education among the next generation.
Youth Accounts as a Financial Literacy Tool
Through an account of their own, young members develop a sense of ownership and responsibility. Not only does the account educate them on the basics of saving and spending, but it also provides parents and guardians with a tool to provide basic financial education. Making deposits, checking their balance, and watching progress toward a savings goal turns the process from an abstract idea into something they can see and learn from. We’ve witnessed firsthand the power of a youth account on a family’s overall financial behavior. Some have developed routines around financial education, visiting the branch weekly to deposit allowances or chore earnings. Experiences like these serve as valuable learning opportunities and create a positive association with finances rather than tough lessons learned later in life. Over time, banking and financial literacy have become a normal part of family life instead of one-off lectures. They’re also able to form a relationship with their local credit union that hopefully lasts a lifetime.
Partnering with Parents
Day to day, parents and caregivers are the ones answering their loved ones’ questions and creating the environment for foundational knowledge to develop. However, credit unions have a unique opportunity to offer the tools, education, and relationships to support them. During Ascend’s Youth Month, members who sat down with representatives were offered a free meeting with a Certified Financial Counselor to discuss the basics of financial literacy and ensure parents and caregivers felt supported in their role.
Credit unions should serve as partners to parents and caregivers in support of a young person’s financial literacy. As a part of that, engagement must be top of mind when designing promotions geared toward the next generation of members. At Ascend, our Youth Month campaign paired a complimentary $100 deposit for new youth savings accounts with a drawing for free concert tickets at Ascend Federal Credit Union Amphitheater in Nashville, Tennessee. The incentive mattered less than what it created: an occasion for a parent or caregiver to help their loved one take the first step in their financial journey.
A Credit Union’s Role in Youth Financial Literacy
Credit unions have a responsibility to ensure the next generation of members are properly equipped with the tools and resources they need to develop a foundation of knowledge. A youth account not only provides a young member with a reason to enter the branch, but it also serves as a practical tool for parents and caregivers to introduce seemingly complex topics in an easy-to-understand format. For credit unions, meeting our members where they are and serving them to the best of our ability is the mission, no matter their age.
Ascend is federally insured by the NCUA.