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October 25, 2023

5 Pillars of Financial Literacy to Share with Your CU

5 Pillars of Financial Literacy

As a credit union, you’re not just any financial institution. Unlike most banks, CUs try to give back to their communities in meaningful ways. Your motto, after all, is “people helping people.” What better way to help people than to share the 5 pillars of financial literacy with your membership?

Here’s a rundown of the five critical components of financial literacy and how you can share them with your CU.

What are the 5 Pillars of Financial Literacy?

1.      Earning

The term ‘earning’ may be simple, but there’s more to earning than simply cashing a paycheck. People need to consider what they want to do and what they need to do for work.

Questions to ask yourself include:

  • What do I enjoy doing that can make money?
  • How much money does my dream job make?
  • How reliable and stable is this career?
  • How many hours a week will I need to work to maintain my quality of life?
  • Where should I use and keep my earnings?

2.      Borrowing

Not only is borrowing necessary in today’s economy, but it also builds your credit. People should learn where to borrow money from, such as a bank or, preferably, a credit union! It’s also imperative to understand a loan and how it works. This involves knowing what the interest rate means and the importance of timely payments.

3.      Budgeting/Spending

It may feel like spending is the entire purpose of earning and borrowing, but there’s a science to spending wisely! People should teach individuals from a young age how to create a budget and allocate funds toward needs and wants. Adults should use budgeting sheets to keep track of monthly bills, discretionary spending, and other regular expenditures.

4.      Saving/Investing

Saving and investing your money is what makes your future comfortable and sustainable. Do you plan to retire? Do you know when you can retire based on how much you save in a retirement account? It doesn’t matter if you’re in your 50s or 20s; saving and investing should be a top financial priority!

Saving money helps you reach financial goals, such as a big vacation or a downpayment on your dream home. Researching and choosing the best platform for long-term investing will help you make the most of your earnings. The right investments can boost your savings as well as your retirement fund.

5.      Protecting

Despite credit unions earning the trust of members, there are still people who’d prefer to hold onto their money at home. While it’s a good idea to keep some funds on hand, most of your earnings should reside in an insured account. The National Credit Union Association (NCUA) insures your money for up to $250,000 with a credit union..

However, protecting your money requires more than entrusting it to your financial institution. In today’s cybersecurity age, safeguarding your earnings means protecting your personal information and using caution publicly and online. You can’t trust all online stores or forums and should never share sensitive information with an unknown person or platform. To stay informed of current cybercrimes and scams, sign up for consumer alerts with the Federal Trade Commission (FTC).

How to Share the 5 Pillars of Financial Literacy

1.      Online

We live in a predominantly digital age, so sharing information online is a no-brainer. There are countless options to share financial literacy via the internet. As a business, be sure to use your CU’s website to its full potential by sharing educational blog posts, the latest news in finance and security, and youth activity pages.

Keep your financial product information updated and effectively use social media to connect with current and future members, especially Gen Z.

2.      In the Mail

Many CU members still like receiving mail on paper instead of digitally, even though it may seem old-fashioned. Some people will never know about your institution’s offerings unless they receive the information in their mailbox. You can include your credit union’s helpful articles and cybersecurity tips in printed materials, such as newsletters. This will help to keep your members who are not as familiar with the internet informed.

3.      At the Branch

You give great in-person experiences to your members. Why not also offer resources to improve their financial well-being? For example, you could set out brochures with information on your services (loans, savings accounts, checking accounts, etc.). Also, consider holding informative events at your branches, such as student loan payment seminars, debt consolidation training, or finance-themed conferences.

4.      In the Community

As a credit union, you likely already participate in various community outreach initiatives. Some CUs set up special programs with local grade schools to encourage financial literacy in kids and young adults. Contact elementary math departments about visiting to discuss budgeting, saving, and ways to earn money (like doing chores).  For high schoolers, consider a program that provides a hands-on look at the financial aspects of being an independent adult.

Sharing the 5 pillars of financial literacy won’t only help your community but will, in turn, benefit your credit union! Improved financial literacy amongst your members will inadvertently lead to an improved economic bill of health for your credit union! This could mean members paying loans on time, saving more money, applying for more loans, or opening more investment accounts.

Sharetec provides partnering credit unions with several useful integrations known for boosting financial literacy, such as the credit score solution SavvyMoney. Explore all our services and integrations by visiting our website.

Do you see something you’re interested in implementing at your credit union? Contact your Account Relationship Manager today!

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