Collaborate With Schools on ‘Experiential Learning’ in Financial Literacy

Credit unions have long delivered on the financial education mission. CUNA Mutual Group’s Mark Lynch has some innovative ideas about credit unions collaborating to find out directly from the students what will keep them engaged in financial learning.

By Mark Lynch

If you don’t know what “MEGO” means, ask any high school student. It means “my eyes glaze over” — a condition most teachers probably witness anytime they try to teach personal financial management in class. This is an important real-life skill that students typically don’t grasp through traditional classroom instruction. Credit unions can help schools produce more financially literate graduates by collaborating on “experiential” learning.

Credit unions are committed to help people make better decisions about financial products and services. So our industry has a stake in producing high school graduates who know what a credit union is, and understand some basics about budgeting, debt, credit, plastic cards, managing savings and checking accounts, and saving for the future.

Perhaps eventually this would improve the current state of financial literacy among American adults.

In Harris Interactive Inc.’s 2013 Consumer Financial Literacy Survey, 40% of adults gave themselves a grade of C, D, or F for their knowledge of personal finance, down from 45% in 2010. Only 5% of 2013 survey respondents said they learned about personal finance in school, down from 10% in 2012.

Commit your credit union to improving the financial literacy grades in your community.

Don’t Try To ‘Think Young’ — Ask Young People What They Think

Kids graduating high school today are all about mobile internet transactions and social media, so that’s how credit unions need to reach them, right? If that’s your assumption, try talking with some local high school students. You might be surprised to learn how many actually use branches. You might be disillusioned that your Facebook page is irrelevant to them.

The key is, don’t assume you know how to reach students.

Your credit union or a group of credit unions can help shape a financial literacy strategy by conducting focus groups of high school seniors and asking what might motivate them to learn about personal finance.

You can also use these sessions to explain a bit about how banks and credit unions work. Ask about what might make them more likely to join a credit union, and what they need from a financial institution.

(Hint: Invite any teen grandchildren of board members to participate in student focus groups. It helps get the board’s buy-in, and these particular teens — as their grandparents will tell you — tend to be brilliant.)

Chances are strong you’ll discover what most teachers probably already know: Traditional classroom instruction in personal finance doesn’t motivate most students. They take the test and they’ve forgotten the material by the time they reach their locker.

Two Experiential Education Collaborations That Work

Let’s look at two non-traditional teaching techniques that credit unions have been using to successfully build financial education partnerships in schools.

Financial Reality Fairs

Credit unions, often in groups coordinated by state leagues, can participate in one-day financial reality fairs that emulate some key financial challenges students will face as they leave school. Students make a career choice, and based on their starting salaries they complete a monthly budget to pay for basics such as housing, utilities, transportation, clothing, and food.

Random events can change their income or expenses, and they have to adjust. They’ll be tempted by stuff they can buy.

This is an example of “experiential” education. Although a “reality” fair is actually role-playing, students must make decisions quickly based on what they’ve just learned, and they see results. The decisions and results are simplified, of course, but students still get some idea how to predict the consequences of specific behaviors. And it’s kinda fun. You can see it in the student’s level of attention and participation.

Part of the attraction is that fairs get students outside their daily routine. Teachers can focus on real-life events rather than theory. Your credit union staff can volunteer to help run the event and use their expertise to counsel students about their budgets, decisions, and results.

Your staff’s face-to-face participation builds awareness about your credit union, and perhaps leads to relationships down the line.

Editor’s note: The Northwest Credit Union Foundation offers Reality Fair packages and grants are available. Contact Kim Vu at [email protected] for more information.

Student-Run Branches

A student branch is a much bigger commitment of staff time and resources than an annual fair. But your investment not only has a more direct effect on students’ financial habits, it can more clearly differentiate credit unions from banks.

Whereas an annual financial reality fair is probably most effective for high school seniors, you could open a student branch in grade schools, middle schools, high schools, or a combination of the three.

A great deal of resources are available on this topic, but here are a few tips to starting and running an effective student-run credit union branch:

  • Be careful how you approach schools. School officials could misinterpret your overture as a marketing ploy to recruit new members. Point out that most student-run branches cost the credit union more than it will probably take in.
  • Plant the seed. Use your staff’s connections with schools when possible. One idea: Make a presentation on a teacher in-service day to talk about the advantages of a student-run branch and to answer questions. When you feel you’ve got some support at a certain school, proceed with a more formal proposal. Be patient. This process can take years.
  • Expand beyond the branch. Once you’ve got a branch established, see if your staff can help teachers discuss financial responsibility and options with their students. Offer your credit union as a resource for teachers and students.

Options Outside of Schools

Schools aren’t the only way to connect with students. Consider partnering with youth groups such as scouting and Boys and Girls Clubs of America to conduct personal finance education.

Organize volunteer events or campaigns that bring kids together to help others, and use that opportunity to briefly promote good financial habits and your credit union’s resources. Sponsor contests for students to make websites or videos that explain basics about the credit union industry and financial management basics.

If necessary, start with one small outreach program for students. Don’t be surprised if your staff finds it so rewarding that it leads to another financial literacy program and then another. Teaching students lifelong lessons in financial responsibility sets your credit union apart for the good of all involved.

Mark Lynch, CUDE, ACUDE, is a credit union industry consultant and a field coach for the National Credit Union Foundation program, REAL Solutions®. Reach him at [email protected].

Strategic Link is the NWCUA’s wholly-owned service corporation, using the power of aggregation to provide the Association’s member credit unions with exclusive high-quality, competitively-priced products and discounted services. Contact Director of Strategic Partnerships Craig Reed at [email protected] today to find out how Strategic Link can help your credit union save money while meeting its goals in 2014 and beyond.