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Credit Unions Teach Financial Literacy Skills in Schools

Dec. 1, 2014
Banking, Banking News
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Helping you teach your kids how to handle their money is a shared goal of credit unions amid a national conversation about requiring financial literacy classes in schools.

Teaching personal finance skills in high school is mandatory in just 17 states. Only six, including Texas, Missouri and Colorado, require tests in the subject, according to a 2014 Council for Economic Education survey. Students don’t always get financial lessons at home either. A third of parents avoid talking about money with their kids, according to a 2012 T. Rowe Price study.

Enter credit unions. These community-focused, not-for-profit institutions host contests, school deposit days, reality fairs and other programs aimed at improving student savvy when it comes to money matters.

A cooperative structure makes credit unions a “natural fit for students looking to learn how to build strong savings and responsibly manage checking accounts, debit cards and eventually loans,” says Ken Worthey, financial literacy and outreach analyst at the National Credit Union Administration. The regulatory agency describes that educational function as a core responsibility of the institutions it oversees. There are a variety of ways in which these lenders pursue that mission.

Greater Iowa Credit Union in Ames hosts ProjectMoney, an annual event where high school students present science fair-esque projects about financial literacy. This year’s winner was Joshua Benjamin, an Ames High School freshman who won the $500 first prize for his tutorial video series about the stock market.

“He’s a really charismatic kid and really advanced for his age in terms of his understanding about money,” says Michael Adams, vice president of marketing and public relations at the credit union. “He was the hands-down winner.”

Adams created ProjectMoney in 2010 to give students a creative way to learn about finance. In five years, projects have ranged from 3-D poster board displays to hip-hop music videos. The credit union’s program won NerdWallet’s 2014 Student Financial Literacy contest. Adams says he hopes to make ProjectMoney available nationwide.

Around the country, other institutions including Luso Federal Credit Union in Ludlow, Massachusetts, run in-school banking programs to give local students a convenient way to start and grow savings accounts. Luso representatives make weekly visits to seven elementary and middle schools, where students get a prize or a gift card raffle entry each time they put money in their account.

Access to in-school branches is “highly correlated” to the chance that students have an account and to improved attitudes toward financial services providers, according to research posted this year on the U.S. Treasury Department’s website.

More credit unions are hosting financial reality fairs that give students a taste of real-world money situations through events resembling Milton Bradley’s Life board game. Participants have a fictional occupation, salary, credit card and checking account, and engage with volunteers who act as salespeople, real estate agents and credit union employees.

Beyond personal finance, some credit unions are setting kids up for success in the business world.

Royal Credit Union in Eau Claire, Wisconsin, begins its Future U.S. Entrepreneurs (FUSE) program next year. In it, middle school students will compete to create and pitch a business plan. Credit union representatives will help participants prepare for the contest with six classroom visits and one-on-one mentoring. Competitors will present their proposals to a panel of judges and an audience for a chance to win cash prizes.

Other lenders are taking a new media approach. At Pasadena Federal Credit Union in California, a $500 scholarship will be awarded for the best YouTube video focusing on personal finance topics created by a high school or college student.

U.S. Federal Credit Union in Burnsville, Minnesota, also employed YouTube to introduce its Great Savings Challenge. The contest for scholarship money involves saving for college.

If you’re interested in similar programs to help improve your youngster’s financial literacy, talk to local credit unions to learn what they may be able to provide.