Oct 03 '16
Building Financially Empowered Youth; Our Future Depends on Them
Earlier this summer, Filene released a research report that examined a systemic problem we face in this country—the lack of accessible financial service options in many low-income, urban communities.
Low-income teenagers in particular are living in financial service deserts. A 2013 FDIC National Survey of Unbanked and Underbanked Households showed that more than 30% of household members under the age of 24 are unbanked—significantly higher than older generations.
The report highlighted several promising solutions to this problem and expressed the value of integrating financial activities such as the operation of credit union branches within schools or after-school programs serving unbanked or underbanked students.
Aligned with this research, Summit Credit Union has found a few effective ways to change the financial course for young people that we’d like to share.
Educating Youth and Elevating Financial Wellbeing
At Summit Credit Union, we have a lot of experience integrating financial activities with young people in the places where they spend their time. Over the past decade, we have created, founded, chartered, run and funded the world’s first youth-chartered credit union, STAR Credit Union. We have three Summit branches in Madison-area high schools, provide signature financial education programs like our Project Teen Money video scholarship competition, and continue to seek out and celebrate opportunities for credit unions to stay in touch with young people.
By preparing young people for their financial future in this way, we are also building a roster of future credit union members and leaders that will embrace, enhance and elevate the model. I wanted to take a moment to share our journey in these efforts.
STAR Credit Union
It’s easier to avoid financial mistakes than to fix them. The idea for a youth-chartered credit union was born out of that insight—we wanted young people to imagine their future and save for their goals with a long-term, hands-on experience. It was important to us that if we created a youth-chartered, youth-led credit union it would be THEIR credit union and not a Summit branch.
Equally important were the goals of:
- Enabling youth to learn about finances and empowerment of money
- Providing youth with their own space to learn about money
- Allowing youth to run the operations to give them business experience
- Encouraging youth to dream big and set goals for themselves
So in 2005, we approached the Director of the Boys and Girls Club with an idea of how Summit might bring its strength to the table. We asked, "what if the kids at the Boys & Girls Club had their own credit union—not a branch of an existing credit union, but their own credit union?"
With that, we made the question a reality. The kids named it STAR for ‘Saving To Achieve Results,’ and a credit union was born.
Soon, young members were providing financial education for others their age. Over the last two years, to help students better prepare for higher education, STAR began providing financial education for the classroom, offering programs to help with budgeting in college and scholarship writing workshops as well as parent seminars.
Young STAR members also contributed money advice that was printed in BRAVA magazine. They created money habits that will serve them and their families for a lifetime. They produced a “Don’t Tax My Credit Union” video for Congress in support of credit unions. STAR members are part of a movement and now understand the importance of political advocacy. That’s an impact we are proud of.
STAR Credit Union currently has 674 youth members, mostly middle- and high school age students, with an average balance of $23.
Project Teen Money
Project Teen Money is a scholarship challenge for teens to teach their peers about saving, spending and giving back to the community, while competing for a $2,500 scholarship. This was launched in 2013 in Summit’s high school branches.
The emphasis of this initiative is to get teens to talk to each other about financial topics that aren’t always on the top of their minds. My challenge to participants is, “How can you take these videos that you’ve put a lot of time into and make them viral?” There’s so much satisfaction in seeing young people take their knowledge and talents and share them with others.
Pictured above is our 2016 Project Teen Money scholarship winner, Robin, Summit employees and high school staff.
Summit Branches in High Schools
The Madison school district reached out with a request to help students with resources that would enable them to become more financially successful. Through the partnership with the school district, we opened our first in-school branch in Madison’s La Follette High School in 2011. In 2013 we opened a branch in Memorial High School and in early 2016, we’re proud to say Summit’s third in-school branch opened at East High School.
Through these branches, we are able to provide teachers a collaborative partner in developing ongoing financial education to teach students money skills, offer scholarship opportunities, employment opportunities, skills training and leadership development.
Making Newsworthy Impact
A key takeaway, in both the research and our lived experiences, is that financial literacy education alone is not sufficient for teens to lead financially responsible lives. When we involve young people as early as possible in understanding what credit unions are, what we're trying to do and most importantly, why we are doing it, we not only set them up for their own financial well-being, we also ensure the sustainability of the credit union model into the future.
A report on Financial Capability for Young Americans from President Barack Obama stated that, “only by combining this next generation of financial education and training with access to high-quality and appropriate financial products can we ensure that young Americans have the greatest opportunity for financial capability.”
Check out these Filene resources related to youth and finances, and visit SummitCreditUnion.com to learn more about any of our financial initiatives for youth.
- The Embedded Credit Union Model for Low-Income Teens
- What Millennials Want: The Future of Millennials in the Credit Union System
- Coming of Age: Young Adults in 2015
- Millennial Money Chatter: A Guide to Millennial Financial Discourse
The future of the credit union industry rests squarely in the hands of today's youngest generations. While this alone isn’t news—this has and always will be the case for any industry—it’s what we do about it that will be newsworthy.