Finances can be a scary subject fraught with emotional connotations for many people. This state of affairs has many origins - one of them is that it's not common for people to learn directly about finances, whether from their parents or at school.
For most people, maintaining a healthy financial life is something they figure out how to do as they go from watching the actions of others and through trial and error, according to Forbes. Unfortunately, these methods don't always lead to desirable outcomes, as anyone who accumulated credit card debt before understanding the seriousness of that decision can attest. It is not only young people who suffer, either - retirees who realize too late their savings weren't quite up to snuff and need to re-enter the workforce can have a hard time.
What is financial education?
Financial education can be about learning concrete facts, like what an emergency fund is or how to qualify for a mortgage. However, a lot of it depends on the person's own financial situation. The answer to whether it's best to rent or buy, for example, might depend on where a person lives and whether he or she can reasonably expect to save money for a down payment. Financial education is also about an attitude toward money. It also means cultivating the capability to create financial goals that are meaningful and to cultivate a disposition that makes achieving these goals more likely.
Some schools are beginning to offer financial education, like in Texas, where students from kindergarten through eighth grade will now be required to take financial literacy classes every year. However, not all students receive this kind of education, and adults often need it too. This is an opportunity for credit unions to serve their members and help them create good financial health for themselves and their families. Credit unions interested in offering financial education can start small and even informally, perhaps by ensuring some beginning lessons are given to new members when they open an account. Classes, written materials and more are all possible, and can enhance the sense of community among credit union members and increase engagement.
As institutions based in the community, credit unions are ideally positioned to begin providing financial literacy training on a local level. Helping members get their finances in order is good for them and good for the credit union, too.