Report
445
Number
Feb 15 2018

fundaMENTAL: The Mind-Money Connection

Understanding why consumers make certain decisions is key to supporting and attracting credit union members. To this end, Filene hosted a colloquium titled: fundaMENTAL: The Mind-Money Connection, and we invited experts to share their thoughts about how people relate to finances and debt, and how they go about making rational financial decisions. What followed was a day filled conversation and new ideas. This report summarizes presentations on the following:

  • Insights from the US Financial Diaries Project by Tim Ogden
  • How temptation gets in the way of managing debt
  • Understanding how different generations approach finances
  • What can pre-commitment contracts do for your members?
George Hofheimer
George Hofheimer
Chief Knowledge Officer
Report Number 445

What are the credit union implications?

If your organization has struggled to generate interest in financial education or you find it frustrating to watch members make poor choices, this research offers fresh solutions and insights. The first step is to recognize the obstacles to behavior change: consumers face a dizzying array of financial decisions daily, and as we navigate this challenging financial landscape, we are driven primarily by emotions and habits. Our attitudes toward financial services have been profoundly shaped by events that happened during formative years. And the financial lives of low- and middle-income Americans are particularly volatile, with income and expenses that can vary wildly by the week.

Credit unions have the opportunity to teach members skills that don’t usually appear in financial education curricula – such as temptation resistance, mindful spending, and how to make rational commitments to restrict future choices when emotions are running high. Beyond skills, your credit union should also be thinking about tools you could design to help low- and middle-income members cope with fluctuating incomes and expenses. By meeting your members in their individual places of frustration, confusion, and stress, your institution can equip them for success and support them in pursuing their goals.

Sponsors

Filene thanks CUNA Mutual Group and our generous supporters for making this important work possible.