The Dirty Little Secret of Spending Habits

by Chris Steffes, Remote Services Consultant

I have a confession: I am a SPENDER. When I think back to my youth and how I learned my personal spending habits, I didn’t need to look any further than my parents. I didn’t understand the advantages of saving as a youth and didn’t apply personal financial management to my life. As a result, I used poor judgment more than a few times growing up, opting for the instant gratification that comes with purchasing a trendy outfit over saving for the future. 

Fortunately, I eventually learned healthy money management, but it took external forces – student loan debt, car loans and credit card debt – to motivate me to change my behavior.

It seems my experience is not unique, as research from Harvard University suggests that patterns of consumer behavior are learned through family socialization, including money management. The Harvard study found an inter-generational consistency in spending habits, which may be part of the reason why so many people in the U.S. are in debt today.

Credit unions are in the unique position to motivate and educate young members, especially teens, about financial management and how to realize their dreams by becoming “financially empowered.”

Financial Empowerment

Here are a few ways to encourage active membership and financial empowerment within your young members:

• Set up a branch at the local high school, and stimulate membership and savings through annual scholarship awards and contests.
  
• Create a positive brand image with youth members through social media campaigns and contests.
  
• Create a teen youth board to your credit union, where kids can learn about sound spending behaviors, provide insight to your board on youth trends with money and technology, and become ambassadors to other youth regarding personal finances.
  
• Conduct financial management programs geared toward teens’ future goals – college, cars, travelling - and include successful youth members and their stories as role models within the program. Set out some food, offer prizes, advertise on social media and through mobile messaging, and teens will come.
  
• Millenials love their phones. With mobile wallets requiring a link to a debit/credit card, lead a seminar that provides teens with a path to obtaining responsible credit, and how to responsibly manage purchases from retailers who use mobile wallet technology.

 Because mobile banking has fundamentally changed the way people bank, young people gravitate to this channel for the convenience and mobility it provides. As a result, young members who learn financial habits from their credit union have a good chance of becoming long term members because of mobile banking. By investing in youth education and community programs, credit unions will receive dividends today and tomorrow when it comes to attracting and keeping youth members.

 CU Solutions Group not only offers a popular mobile banking app to reach your younger members, we also have turnkey youth websites and marketing programs to grow those demographics at your credit union. 

Help Your Credit Union Stand Out from the Crowd – Part 2: Wooing Gen Y

by Amy Neale  

In response to CUNA’s Member and Nonmember Survey Results, we thought we’d address three distinct ways you can help your credit union stand out from the competition. To do each section justice, we’re delivering it to you over a three-part blog series. Welcome to Part 2. 

Wooing Gen Y
When it comes to wooing Gen Y/Millennials, credit unions have a long way to go. According to the CUNA Member and Nonmember Survey, respondents ages 18 to 24 were just as likely to recommend credit unions to others (31%) as they were to recommend banks (32%). Combine this with the aging membership issue most credit unions are facing, and you’ve got a demographic that needs more attention.

Jon Haller, CUNA’s director of corporate and market research points out that most banks get an edge over credit unions when Gen Y hits college and becomes aware of the banks co-branded credit and debit cards. Haller perceptively points out that it all depends on who gets to that generation first. So, what can your credit union do to stand out from the crowd and get there first? Two words: financial literacy.

A recent Wells Fargo survey found that more than half of Millennials say debt is their biggest financial concern. And an impressive 78% said they learned “a great deal” or “somewhat” about personal finances from their parents. The best approach to offering financial literacy programs to your younger members would be to offer it to them and their parents. This could come in the form of financial education articles on your credit union’s website, savings clubs that target Gen Y or even videos or podcasts on your website that discuss various financial topics.

In addition to boosting your credit union’s financial literacy program, you might want to consider developing a marketing program that appeals to younger generations; adding products like first-time auto loans or credit cards for members just starting to establish a credit history; or create financial seminars geared toward the Gen Y demographic. Plus, a strong social media strategy and presence can go a long way to wooing those Millennials. 

CU Solutions Group can help you woo Gen Y with its Financial Resource Center, youth websites, youth campaigns, podcasts and social media expertise.