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Your Right to Make Copies As a buyer of this PDF file, you have the unlimited right to share the “Model Youth Program Guide,” but only with your co-workers and volunteers at your credit union. Specifically: 1. You have the right to distribute the Guide electronically to any number of staff and volunteers of your credit union only. 2. Staff and volunteers of your credit union have the right to print any or all of the Guide for personal use only. Note: The rights that you have purchased do not include permission to distribute the “Model Youth Program Guide” in print or electronic form—in whole or in part—to anyone who is not a staff member or volunteer of your credit union. Thank you for buying CUNA’s “Model Youth Program Guide.” For copyright information, contact Joe Day (800-356-9655, ext. 5794; jday@ For editorial information, contact Philip Heckman (800-356-9655, ext. 4088; © 2008 Credit Union National Association, Inc. All rights, other than those specified above, reserved.

Model Youth Program Guide Best Practices and Proven Techniques

Best Practices and Proven Techniques FOR CREDIT UNIONS

Publisher: Jim Hanson, DE, CUNA Center for Personal Finance Editorial Director: Philip Heckman, DE, Center for Personal Finance Senior Editor: Lin Standke, CCUFC, DE, Center for Personal Finance Design & Production Manager: Linda Napiwocki, CUNA Market Research Art Director: Nancy Hilsenhoff, Market Research Writer: Judy Dahl, JKD Communications, LLC

CUNA’s Personal Finance Initiative Credit Union Financial Literacy Resources

© 2008 Credit Union National Association, Inc.

Stock no. 28479.


Foreword to the Wise The Model Youth Program Guide presents a detailed course of action for building a “feeder system” that can nourish credit union growth by constantly replenishing the membership with a new generation. The Guide draws upon the best practices of dozens of experienced credit union educators and marketers. Their stories serve as examples of how to raise youth to full and active membership by educating them about responsible money management using credit union services. An approach that works for one credit union with its particular membership and circumstances, however, is not necessarily a match for your members’ needs and your unique economic and competitive environment. The best practices and proven techniques described in this Guide are merely a starting point from which to build your program. You’ll have to determine which elements of these success stories are appropriate for the children and teenagers who need your credit union’s help and its services. You can pick and choose the components that are most appropriate, given your staff and budgetary resources, and put those elements together in a way that will achieve your credit union’s educational goals and plans for growth. Fortunately the credit union movement includes many people who have successfully faced strategic challenges similar to yours. Through trial and error, they have discovered paths to business growth and membership renewal through financial literacy. These are their stories and their solutions. Your task is to adapt them and make them your own. Use this Guide as a motivational and reference tool, and as a creative stimulus.

Notes Samples of policies and other documents and a resource list for more information follow each chapter. A list of sources of statistical information appears at the end of the Guide.



Model Youth Program Guide Best Practices & Proven Techniques

Table of Contents Foreword to the Wise .................................................................. ii Why Financial Education? ......................................................... v Checklist: List: Sample: Sample:

Make the Case.................................................................................... iv Resources ........................................................................................... ix President’s Message ........................................................................... x Mission Statement ............................................................................ xi

Chapter 1: What Makes a Youth Program Effective............ 3 Checklist: List: Handout: Handout:

Become a “Youth-full” Credit Union ...................................................2 Resources ..........................................................................................10 How to Shop for a Financial Institution ...........................................11 How Can I Teach My Preschooler................................................12, 13

Chapter 2: Teaching to Spend, Save and Manage Money.........................................................15 Checklist: List: Handout: Checklist: Sample: Tips: Checklist: Sample:

Teach and Deliver the Basics ............................................................14 Resources ..........................................................................................24 Teaching Preschoolers About Money.........................................25, 26 Conduct a Youth (or Parent) Session ................................................27 Recruitment Article ..........................................................................28 Smart Shopping ...............................................................................28 Budget Simulation ...........................................................................29 Teenage Budget Worksheets ......................................................30, 31

Chapter 3: Teaching to Borrow...............................................33 Checklist: List: Sample: Sample:

Manage the Risk of Lending to Minors ............................................32 Resources ..........................................................................................40 Youth Loan Policy .............................................................................40 Youth Credit Application ..................................................................41

Chapter 4: Working With Schools ..........................................43 Checklist: List: Sample: Sample: Tips: Sample:

Build a Solid School Relationship ....................................................42 Resources ..........................................................................................53 Letter of Introduction to School Officials .........................................54 Offer to Speak in the Classroom .......................................................55 Teacher Recruitment Plan, NEFE HSFPP...........................................56 List of Financial Presentation Topics for Schools ..............................57

Chapter 5: Student-Run In-School Branches .....................59 Checklist: List: Sample: Sample: Sample: Sample:

Open an In-School branch ...............................................................58 Resources ..........................................................................................71 Student-Run Branch Coordinator Job Description...........................72 Credit Union-School Responsibility Overview.................................73 Student Branch Training Program Outline .......................................74 Parental Permission Form.................................................................75

Chapter 6: Communicating with Youth ...............................77 Checklist: List: Tips: Tips: Sample: Checklist: Sample: Sample:

Send the Right Message to Young Members...................................76 Resources ..........................................................................................88 General Focus Group Techniques......................................................89 Focus Groups with Youth/Young Adults ..........................................89 Teenage Focus Group Questions ......................................................90 Creating an Effective Youth Advisory Panel .....................................91 Teenage-Written Newsletter............................................................92 Credit Union MySpace Page .............................................................93

Chapter 7: Youth Outside the Mainstream .........................95 Checklist: List: Sample: Sample:

Serve Youth on the Outside ..............................................................94 Resources ........................................................................................105 Youth-Oriented Web Site................................................................106 Letter to Parents about Youth Membership ...................................107

Chapter 8: Planning Logistics and Budget ...................... 109 Checklist: List: Sample: Sample: Sample: Sample:

Build Your Program Plan.................................................................108 Resources ........................................................................................116 Youth Program Design Template....................................................117 Youth Program Budget Item List....................................................118 Scholarship Application .........................................................119, 120 Contest Announcement .................................................................121

Chapter 9: Measuring Progress and Success ................... 123 Checklist: List: Sample: Sample:

Evaluating Program Effectiveness ..................................................122 Resources ........................................................................................136 Program Satisfaction Survey ..........................................................137 Survey of Behavior Change ............................................................138

Where We Got the Numbers ................................................ 139 Acknowledgments.................................................................. 141 Photo Credits ........................................................................... 141 iii

Action Checklist

3 Make the Case  

Assemble evidence from outside sources of the need to educate youth. (See Chapter 1.) What are current measures of youth literacy, spending, and saving?

Collect anecdotes from co-workers and members about their children’s money management experiences. What good and poor decisions have they witnessed? What discussions have they had at home?

Start a discussion by downloading Jumpstart’s survey questionnaire, stripping out the answers, and challenging co-workers to complete it before your next staff meeting. Without sharing personal scores, what conclusions do they draw about the kinds of skills young people need and how best to teach them?


Assemble evidence from inside sources, such as your credit union’s database and member surveys, of the need to educate youth. What is the average age of your credit union’s members? How many products do youth members use on average? Do their savings balances grow as they do? Are they having trouble with behaviors such as overdrafts? How do your young members expect their credit union to help them prepare for life?


Prepare a presentation for your credit union’s decision-makers that outlines the business case for a comprehensive youth program, based on your outside and inside evidence. (See Chapter 8.) What are your goals for a new approach? How do those goals contribute to your credit union’s organizational goals? How would you involve all ages, including parents, in your youth program? What youth products will you offer? What policy changes might be required? How will youth accounts contribute to revenues? How will you evaluate success? How will you manage risk?

Amend your credit union’s mission statement and statement of core values to acknowledge a formal commitment to educating youth. How does serving youth fit within your credit union’s vision and that of the movement as a whole?

Display the amended mission statement prominently on your credit union’s Web site and in office lobbies. How can you make sure that your co-workers and new hires are ready to explain the commitment to members?

Model Youth Program Guide Best Practices & Proven Techniques

Why Financial Education? Summary Gaining members’ business by educating them about personal finance and financial service use while they’re young reduces the need to compete with big banks for their business later as young adults.

Highlights u Financial literacy isn’t a body of knowledge, it’s a continuum of abilities that enables people to effectively manage their personal finances in a changing world throughout their lifetimes.

u Education can make members better credit risks, leading them to use more financial services and use them properly, making fewer mistakes for credit union staff to fix. Similarly, education can help members become more prosperous, which makes their credit unions more prosperous too.

u U.S. children and teenagers have billions of dollars at their disposal each year, but don’t receive adequate guidance in money management from parents or schools. Credit unions are well-positioned to provide financial literacy leadership.

u Current credit union youth programs are the best source of the “how to” information needed to plan, launch, operate, evaluate, and improve the way you can educate your young members in responsible service use and smart money management.

u A youth program should be part of your credit union’s core strategy for business growth, and support for it needs to come from the top.


ids are our future. How many times have you heard that said at conferences, in newsletters, in ads … and there’s certainly no arguing with it. But what does it mean to credit union people? What are other credit unions doing to ensure that kids and teenagers will have productive futures? What should your credit union be doing? And how should your credit union proceed? Those are the questions that this guide aims to answer—especially the last one. In the following chapters you’ll find the solid, “how to” information you need to plan, launch, operate, evaluate, and improve a credit union youth financial education program. Or to revamp the one you already have. All gleaned from among the movement’s best practices. You’ll find action steps and checklists, advice from credit union innovators and education experts, and information about tools and programs you can use. You’ll also find real-world stories about credit unions already doing an exemplary job of engaging youth and teaching them to manage their financial lives. If you’ve picked up this guide, you likely don’t need to be convinced that engaging and educating youth is important, that it should be a central part of a credit union’s strategy. But your bosses and your board might need convincing. Too many credit union leaders see youth programs as a nicety, a benefit for members that’s not worth spending much money on and doesn’t provide a return to the credit union. Before diving into the “how-to”

Be Sure To Get the facts and use them. The “rightness” of financial education makes a weak argument without supporting evidence. of creating and/or enhancing a credit union youth program, consider the “why-to.” You’ll need to be able to answer that question if you have to make the case to your CEO or board. Let’s start with the big picture…

The skills of financial literacy Essential to creating a model youth program is understanding what it means to be financially literate. The Jumpstart Coalition for Personal Financial Literacy defines financial literacy as “the ability to use knowledge and skills to manage one’s financial resources effectively for lifetime financial security1.” Financial literacy isn’t an absolute state; it’s a continuum of abilities subject to variables such as age, family, culture, and residence. Financial literacy refers to an evolving state of competency that enables each individual to respond effectively to ever-changing personal



and economic circumstances. In its report, National Standards in K–12 Personal Finance Education, Jumpstart asserts that all young people graduating from our nation’s high schools should be able to take individual responsibility for their personal economic well-being: Broadly speaking, a financially literate high school graduate should know how to: • Find, evaluate, and apply financial information, • Set financial goals and plan to achieve them, • Develop income earning potential and the ability to save, • Use financial services effectively, • Meet financial obligations, and • Build and protect wealth. “Financial literacy is a set of skills, rather than a body of knowledge,” explains Philip Heckman, director of youth programs at CUNA and primary author of the standards report. “This means that a financially literate high school graduate wouldn’t necessarily know how to select a mortgage or manage IRA withdrawals in retirement, but would know how to get the information to make those decisions soundly when the time came.” Jumpstart’s standards indicate that the skills students must have to increase their personal finance knowledge change continually as their responsibilities and opportunities change. The standards are meant to serve as a model framework for a financial literacy curriculum, and you might find some or all of the listed skills and outcomes useful in your own youth program planning. You can download the standards report from What follows is an explanation

You Got That Right Most consumers select their first financial institution before age 25, and tend to stay with it5. vi


of why it’s important—and smart— to attract young members early, to help them become financially literate, to explain why credit unions should provide that education, and to show how it benefits your credit union. You may not need to read it, but maybe someone you know does. (Hint, hint, boss.)

You Got That Right Consumers between the ages of 8 and 21: • Earn more than $200 billion a year, and • Spend four times what they save7.

Membership is aging It’s clear that credit unions need to attract young members. The median age of a credit union member is now 48 years old, which is six years younger than the median age of the adult nonmember2. And the percentage of members in their peak borrowing years—ages 25 to 44—has dropped significantly over the past two decades. In 1986, more than one of two members fell into that group; in 2006 it was just a little over one of three3. This major decline in peak borrowers has worked against credit union lending efforts for the past several years, and will continue to do so through at least 20104. This translates to millions of lost borrowers and billions in lost loan dollars. “We believe in our youth program as a basic tool for credit union survival,” says Helen Godfrey-Smith, CEO of Shreveport (La.) Federal Credit Union. The credit union, like many, is constantly losing members to age and natural attrition. “To replace older members, we must focus on recruiting members to take their places,” Godfrey-Smith notes. “These leaders and members of the future must know truly what it means to belong to a credit union and to put the credit union

philosophy into action.” Young people are the key to credit union growth, and it’s important to draw them in early. Most consumers select their first financial institution before age 25, and they tend to stay with it5. So it’s important to begin talking and working with young people well before age 25. And yet, only about one of five 18-to-24-year-olds is a credit union member. And almost half of eligible nonmembers aged 18 to 34 say that they’re “not very familiar” or “not at all familiar” with credit unions. That’s half of more than 30 million potential members who are, or will soon be, in their peak borrowing years6.

Minors have money, need mentors Young people are serious consumers. Eight-to 21-year-olds in the U.S. as a group earn more than $200 billion a year. Of that total, they spend four times what they save7. And these young people are active consumers of financial services. Six in 10 teenagers have a savings account. Three in 10 have an ATM/debit card. One in four has a checking account, and one in 10 has a credit card in his or her own name8. They may be active consumers, but they’re not always wise ones. While children have more spending money than ever before, their demands for consumer goods have risen at an even greater rate. This trend is fueled to some degree by societal expectations and by parents who are more indulgent of their children’s desires than the parents of previous generations.

Be Sure To Recognize that many young people have financial resources beyond what you may have had in your youth. Financial education is important for them as well as for students from low-income families.

Parents aren’t generally equipped to teach financial literacy, or even model good money management. “We can’t count on parents to teach financial literacy to their kids because most of them don’t know it themselves,” says Juri Valdov, retired CEO of Northwest Federal Credit Union, Herndon, Va. In his credit union community, recent surveys suggest more than one-half of parents are incapable of teaching their children about their finances. Students and parents agree that, even by college age, students are ill prepared to deal with the financial challenges that lie ahead. Fewer than one of four students and one of five parents say students are very well prepared to deal with the financial challenges that await them after graduation9. The good news: Most young people are aware of their financial ignorance. More than three-quarters of college students wish that they had more help preparing for their financial future10. The bad news: Young people aren’t getting instruction at home. Fewer than one-half of college students say that their parents make a consistently conscientious effort to teach them about money11. Bombarded by media exhorta-

You Got That Right Financially ignorant kids become financially strapped adults. The group with the greatest percentage of personal bankruptcies are people aged 25 to 2914. Why Financial Education?

tions to “Buy, buy, buy,” and without tools for making good financial decisions as children, today’s cohort of 20-somethings is heavily indebted. Credit card debt among college students is widely reported, with one-half piling up balances of more than $5,000 and one-third balances of more than $10,000 by graduation. Only 19% graduate free of credit card debt12. And college graduates leave school with an average student loan debt of $19,64613. Equivalent numbers for peers who didn’t go to college aren’t available, but there’s good reason to believe that debt levels are similar. For example, although ages 25-44 are considered peak years for filing bankruptcy, the group that exceeds its representation in the population at large by the greatest amount (77% more than expected) is the 25-to-29 age group14.

Schools lag in financial education Schools still aren’t doing the job, either. A decade-old movement to raise awareness of youth financial ignorance, led by organizations including the Jumpstart Coalition for Personal Financial Literacy, has had limited success in persuading states to provide personal finance instruction in the K-12 public schools. There has been some improvement—economics, traditionally part of the core social studies curriculum, is now included in the educational standards of all states. However, only about one of five states now require the testing of student knowledge in economics. Personal finance has a shorter history as a high school subject. Currently only seven states require students to take a personal finance course as a high school graduation requirement and only nine states require the testing of student knowledge in personal finance15. (See Resource List.)

Be Sure To Include financial services in your youth program. A kids’ club with toys and trinkets isn’t enough—a full range of financial services should be available to qualified youth— those who have been educated about their responsibilities.

Young people need more financial services Credit unions could ensure that future peak borrowers are ready to handle credit responsibly, and it’s never too early to start. The median age for children to begin exhibiting brand preferences is just over three years old16. Why shouldn’t it be your credit union’s brand? Make it easy for parents to open accounts for their children at birth, to start instilling the savings habit. But don’t stop there, Valdov advises. “With education and supervision, minors can responsibly handle checking and debit cards and, yes, even credit.” The key is to qualify them with education about their responsibilities as users of financial services. Credit unions are perfectly positioned to introduce young members to a full range of financial services under parental supervision. Extending to young members all the services they’re educated to handle before leaving home increases the chance that they’ll learn to use them responsibly and remain active members as adults.

The credit union’s risk is manageable Many chief financial officers and board members are concerned about the risk involved with offering financial services to youth, especially credit products. Sure, there’s some risk. What credit product, no matter how old the borrower, is completely risk-free? But the risk of lending to minors is manageable. Just as with adult



borrowers, you can decide that youth require a credit responsibility course first, and/or a cosigner. You can start teenagers out with a stored value card. You can set credit limits low and require parents to monitor their children’s use of credit carefully. As we’ll discuss in chapter 3, credit unions issuing credit cards to minors, even without cosigners, are seeing extremely positive results. Kelly Schermerhorn, CEO at CES Credit Union in Mt. Vernon, Ohio, believes in offering no-cosigner credit cards to teenagers. “I think cosigners can be a negative,” he says. “I didn’t permit cosigners at my previous credit union; I thought that if I did, kids wouldn’t think the debt was their responsibility.”

Youth programs dodge big bank competition Big banks aren’t interested in courting children (especially youth aged 3 to 14)—take advantage of that. “Merely joining banks in the chase for twenty-somethings makes no business sense for credit unions,” said LeAnn Achtenberg, vice president of marketing at Anoka Hennepin Credit Union, Coon Rapids, Minn., and former chair of the National Youth Involvement Board. “Why wait until the competi-

You Got That Right There’s little competition to serve young children, so it makes sense to lock in their business before they turn 18 and big banks, with big advertising budgets, come calling. In 2006, banks spent 11 times what credit unions spent on marketing—an estimated $10.45 billion17 versus an estimated $951 million18. By itself, Citibank outspent the entire credit union movement for marketing and advertising during that time19. viii


Services for Teenagers at Shreveport Federal • Share Savings Account, a regular passbook account that starts a young member on a saving habit. • Investment Club Account, a money market account that gives a teenager a way to watch fund-raising profits grow faster than in a basic share savings account. • Investment CD, whose interest guarantee rewards a teenager for patience with higher earnings. • Investment Checking Account/ Investment Debit Card, which gives a teenager a money management tool to practice the lessons learned in required seminars on budgeting, spending wisely, and balancing a checkbook. • Credit Card with $200 limit, which allows a teenager to get a head start on becoming a responsible borrower, as taught in the required seminar “Using Credit Wisely.” • ATM Card, which gives a teenager convenient access to cash from a share savings account, while exercising the discipline to track expenses.

tion is spending big bucks to lure young adults?” she asks. Credit unions have access to children and teenagers through family memberships. If we serve them long before they even hear about banks, they’ll have credit unions in their bones. Then we won’t have to compete for their loyalty later, when it’s more expensive.” It’s natural to want to wait until a person is at the prime age for (profitable) products and services. That’s when a credit union, like any business, would like to see more specific results from its marketing efforts. But bottomline thinkers must understand that working with younger members doesn’t have to provide an instant return on investment. It’s a long-term strategy for bottom line stability and growth. (See Chapter 9.)

to the credit union,” says GodfreySmith. She believes that a youth program serves as a touchstone, not only for the credit union’s ability to fulfill its mission, but also its ability to grow. She says, “Only if we serve youth well, do we ensure that our credit union is adapting and driving forward into the future fully equipped to thrive in the face of constant change.” Shreveport Federal calls its youth club T.H.E. CLUB—Teens Headed for Excellence. “Our goals might seem aggressive, but our young members have proved that when given knowledge and then pushed to achieve, they will excel,” Godfrey-Smith explains. As of early 2008, T.H.E. CLUB had 390 members. Although their

What works—putting youth in the driver’s seat In a very real sense, members under the age of 18 set the pace and the direction for Shreveport Federal. “Our youth program drives the credit union. Many times we attract the youth first, and the full family follows. When parents see what we give to their children, they’re more committed

individual monetary resources are relatively small, these teenagers are well on their way to becoming full members of the credit union. (See Sample “President’s Message.”) To date, the teenagers have accumulated savings of $47,737—an average account balance of $122. “Members of T.H.E. CLUB have already done much to make us proud in many ways besides their responsible use of our financial services,” says Godfrey-Smith.

Resource List

Where To Go for More Information • Champions of Financial Literacy (report of CUNA’s Financial Literacy Task Force • CUNA’s Personal Finance Initiative (online resource) • Making the Case: Statistics on Credit, Debt and other Issues, Jumpstart Coalition for Personal Financial Literacy—Select Downloads • 2008 Survey of Financial Literacy among High School Students, Jumpstart Coalition for Personal Financial Literacy—Select Downloads • Economic and Personal Finance Education in Our Nation’s Schools (survey of state curriculum mandates/requirements), National Council on Economic Education, 2007 • National Endowment for Financial Education • National Youth Involvement Board • State Financial Education Requirements, Jumpstart Coalition for Personal Financial Literacy—Select Legislation Credit Union Web sites • Anoka Hennepin Credit Union • CES Credit Union • Northwest Federal Credit Union • Shreveport Federal Credit Union

Why Financial Education?

Be Sure To Challenge young members to look for projects that give back to the local community under the credit union’s leadership. She has high hopes and expectations for T.H.E. CLUB, including: • To provide avenues and opportunities for youth to develop leadership skills; • To provide experiences that will foster within the youth a positive attitude toward life; • To provide youth with experiences that would motivate them to strive to make constructive contributions to society; and • To expose youth to the entrepreneurial spirit Some club members did a six-week internship at the credit union this past summer, as part of a program to prepare them for the real business world. Now club members are gathering information and laying the foundation to create and own a business that they will solely operate. After the devastation of hurricane Katrina, T.H.E. CLUB sponsored a fundraiser to help the people in shelters. On a Saturday morning, members raised more than $2,500, and collected clothing donations as well. All of their accomplishments support the credit union’s mission, beginning with the charge to pursue quality and innovation in financial service products and delivery excellence. “Focusing on the needs of our young members ensures that the credit union will meet this primary charge,” says Godfrey-Smith. “By putting T.H.E. CLUB in the driver’s seat when it comes to planning for and investing in the future, Shreveport Federal is applying the energy of youth to the most basic needs and interests of the future,” she adds. “This almost guarantees that the credit union will be a strong and adaptable institution, come what may.”

Financial education gives a competitive edge Addressing the financial needs of youth is the starting point for improving the financial well being of all Americans over time. A youth-centered strategy also has the potential to: • Instill a lifelong savings habit in all credit union members. • Increase borrowing and other service use as engaged young members become more-dedicated, more-responsible adult members. • Strengthen the emotional bond of membership to motivate grassroots support for legislative and regulatory initiatives and lead some to credit union leadership positions.

Be Sure To Include a commitment to financial literacy in your credit union’s mission statement, and display it prominently. Imagine how your credit union, your members, and your community would benefit by educating all members while they’re still children. Education can make members better credit risks, leading them to use more financial services and use them properly, making fewer mistakes for credit union staff to fix. Similarly, education can help members become more prosperous, which makes their credit unions more prosperous too. Beneficiaries of a credit union education, grateful for the assistance, can be less susceptible to competitors’ enticements because they understand and support the credit union difference. Make your youth program a part of your credit union’s core strategy and support it from the top down. It’s so much more than a nicety, and it can’t succeed without this focus and support. (See Sample “Mission Statement.”) Now, let’s move on to what a credit union youth program should look like and how to create an exceptional program.




President’s Message

Youth Count at Shreveport Federal Credit Union I invite you to join other teens in our community as we introduce T.H.E. CLUB (Teens Headed to Excellence), a teen investment club for ages 13 to 19. In early 2002, the Louisiana Jump Start Coalition for Personal Financial Literacy conducted its first survey of Louisiana 12th-grade students. The results indicated that Louisiana’s young adults do not possess the necessary skills and knowledge to start their adult lives without significant problems. The average grade on the exam was 47.3%, failure under any grading system. It is clear that the majority of high school students cannot navigate the world of personal finance. Alarmingly, Louisiana is not unique; the national average is little better at 50.2% according to the Jumpstart study. T.H.E. CLUB is an organization formed to promote financial literacy and a spirit of entrepreneurship in our teens. T.H.E. CLUB will offer fun activities like trips to Dallas to visit the Federal Reserve Bank and of course other destinations like Six Flags over Texas or Fiesta Texas. Call one of our member service representatives for information. Sign up now! Sincerely, Ms. Helen Godfrey President / CEO Coordinators’ Message How would you like to get involved with other youth who are doing positive things? Come and visit us at Shreveport Federal Credit Union and join T.H.E. CLUB We are extending our invitation to teens from ages 13 to 19. Remember, it’s never too early to start planning for your financial future. Purposes T.H.E. CLUB seeks: 1) to improve the financial literacy for youth ages 13 to 19, 2) to promote increased interest in business education, 3) to encourage youth to get an education and build a company, and 4) to learn how to operate a credit union. The Challenge We must begin to prepare people in the younger generation to be excited about credit unions and what credit unions can do for society and for them. In addition we will fulfill a commitment to the communities we serve by providing financial education to their youth. And finally we must continue to build relationships with youth and make this one of the key concerns of our credit union.

Source: Shreveport Federal Credit Union.




Mission Statement Members need to see that financial education is a large part of your credit union’s reason for existence. Here’s how you might incorporate financial literacy into your key statements of commitment to members. Mission Statement ABC Credit Union exists to provide members of all ages with the following: modern and affordable financial services; professional and efficient fiduciary oversight; and comprehensive and objective personal finance information. Vision Statement ABC Credit Union will know that it has accomplished its mission when it has achieved 100% penetration in its field of membership; become the primary financial institution for all its members, and is recognized by its members and the community as a financial literacy leader. Core Values ABC Credit Union is committed to the following principles in the pursuit of its mission: 1. That financial literacy depends on acquiring a set of skills rather than a body of facts. 2. That service to minors centers on teaching them to achieve their personal financial goals by the responsible use of financial services under the informed supervision of their parents or guardians. 3. That adults require continuing education to achieve financial security for themselves and their dependents in a constantly changing economy. 4. Etc.

Why Financial Education?



Chapter 1

Action Checklist

3 Become a “Youth-full” Credit Union 


Get to know your current and potential youth members. What are their preferences, dreams, and financial needs? What are their attitudes about spending and saving? What could a youth survey or focus group tell you?

As part of your community outreach, encourage students to shop for a financial institution and let them discover for themselves that membership is the best deal for consumers.

Raise children to full membership. How can you involve grandparents in helping their grandchildren begin to save regularly? Are front-line employees trained to listen for cues about a new birth and recommend starting a youth savings account?

Hire high school interns through a local school partnership. (See Chapter 4.) What can your interns tell you about their peers’ financial service wants, needs, and habits?

Educate parents to teach basic money concepts to their children and to model smart personal finance decisions. How can you help them use their influence to instill productive values about money? Have you told parents of preschoolers about the activities in CUNA’s free Thrive by Five™ program? (See Resource List.)


Develop relationships with local schools by volunteering to help team teach the free NEFE High School Financial Planning Program® or other personal finance curriculum. (See Chapter 4.)

Open a branch in a local school. (See Chapter 5.)

Become a financial literacy advocate by joining your league’s efforts to educate lawmakers and persuade them to increase personal finance instruction in public schools. Can you participate in your state’s Jumpstart coalition? (See Resource List.) Can you mobilize credit unions in your local chapter to increase the movement’s visibility as a leader in financial literacy?

Raise awareness about credit unions’ “youthfulness” by reporting staff classroom presentations to the National Youth Involvement Board. (See Resource List.) Can you work within your credit union chapter to leverage your available staff time with that of your peers to cover more schools and reach more students?

Model Youth Program Guide Best Practices & Proven Techniques

Chapter 1:

What Makes a Youth Program Effective Summary A model youth program reflects real life, targets emotions, teaches through direct experience, and begins as early as possible. Although there’s little research supporting current educational methods, you can modify teaching materials and techniques to improve financial literacy, using key principles.

Highlights u The less students know to begin with, and the younger they are, the more they benefit from hands-on, real-world financial education.

u By the time U.S. children start school, they’ve often formed opinions about money that need to be modified or “unlearned” before they can learn productive money management skills. Beginning to teach kids about money before they start kindergarten—and involving their parents in doing so—can give them a better start.

u Research suggests that signals from the emotional parts of the brain override analytical reasoning. This means that emotionally appealing educational activities have a longer-lasting effect than pure lecture.

u It’s most useful for students to develop a personal financial plan using goals meaningful to themselves, and to make decisions whose consequences they’ll actually have to face.


magine an earnest credit union volunteer who takes several hours out of his day to present financial literacy principles at a local high school. During his slide presentation, some students listen, some even take notes. Others yawn, chat, doodle, or look around the room.

Another volunteer facilitates a life-simulation game at a high school, where students are assigned jobs, families and expenses, and encounter realistic situations requiring them to make financial decisions. The volunteer occasionally pauses the action to lead a discussion about the situations and decisions. Participants groan as they incur medical expenses or lose their jobs, exult as they get salary increases at work, or excitedly buy a new car they’ve saved for. Which volunteer’s time is best spent? Which goup of students is more likely to remember the lessons learned—and use them to manage their money well?

The second group, probably. Merely lecturing youth doesn’t work. Experiential, realistic programs that appeal to emotions as well as logic are far more effective. This chapter discusses the types of financial literacy programs that research shows are effective and what types aren’t, what a model youth program looks like, and how to get young people involved in your credit union.

Well-known ignorance Lewis Mandell, Ph.D., has conducted six national biennial surveys of high school seniors for the Jumpstart Coalition for Personal Financial Literacy. The results have been nothing short of dismal. (See Fig 1-1.)

You Got That Right Only 17% of high school seniors correctly identified stocks as likely to yield higher returns than savings bonds, savings accounts, and checking accounts over the next 18 years, even though there has never been an 18-year period where this wasn’t true1.

Figure 1-1

Jumpstart Test of High School Students’ Personal Finance Knowledge (Overall Average Scores) 100% 80 Passing Grade


u Students learn in different ways, so financial education should include materials and activities for all learning styles.

40 20

u Simulation games and interactive web sites, which allow students to practice making financial decisions, provide a fun, memorable way to teach money management.







Source: Jumpstart Coalition for Personal Financial Literacy.



“In 2008, high school students’ financial literacy was the lowest measured since the surveys began in 1997,” he says. “But the decrease since 2006 may have been accentuated by the unusual economic times during which the 2008 survey was conducted, including declines in equity and home values and an apparent increase in inflation. Scores have fluctuated around the 50% mark since 2000.” Mandell’s analysis of the latest results reveals several interesting observations: Students who take a high school course in personal finance tend not to do any better on the exam than those who haven’t had such a course. For a small percentage, fewer than one in ten students, this may be a motivational problem, a failure to understand the complexity of their lifetime financial responsibilities. Another possible problem with current courses in money management may be the limited breadth that they present to the students. Given limited time and resources, teachers may focus simply on the facts of money management and ignore the larger economic picture. The better financial literacy performance by students who play a stock market game leads to a further conclusion that the real-life materials can best be taught in an interactive, real-time environment

Be Sure To: Engage students’ emotions by getting them actively involved in the financial challenges of their world. 4


through simulations, games, and research projects. Mandell’s research shows that any improvements in financial literacy continue to be led by the more affluent segments of the population. For example, in 2008, students from households that earned $80,000 or more had an average score of 52.3% on the Jumpstart test, while students from households with incomes of no more than $20,000 had an average score of only 43.4%. It’s increasingly disturbing that those with lower incomes are saddled with the additional disadvantage of not possessing the tools to spend what little they have efficiently. For example, students who plan to attend a four-year college score, on average, just over 50%, while those who plan no education after high school score just under 35%. How will these new workforce entrants be able to make an informed 401(k) choice, and will they realize the importance of saving for retirement?

The bad news Financial literacy advocates fervently believe in the value and effectiveness of personal finance education. But their belief is largely anecdotal. Researchers haven’t been able to prove that most current financial education programs work. The Jumpstart surveys consistently show that U.S. teenagers are as ignorant of personal finance as they ever were. “Advocates of personal finance education face a test of resolve,” Mandell says. “The truth is we have little to show for 10 years of increasing attention to the problem of financial illiteracy among U.S. youth.” In the past decade, according to Mandell, we’ve seen widespread and commendable attempts through the public schools to improve the ability of future adults to manage their personal finances. Much of this effort has focused on high school youth on the cusp

You Got That Right Since 1997 high school seniors’ financial literacy scores, as measured by the Jumpstart Coalition, have actually decreased2. of independence. Yet educators must admit that today there’s little evidence that personal finance instruction is improving the financial literacy of high school students. No one knows why current personal finance education in high school is a failure. It may be simply that no one has yet discovered the secret to successful intervention at that age. Indeed, Mandell’s research suggests, for example, that the experiential approach of stock market simulations is better for teaching investment concepts than traditional textbook and lecture methods.

The good news Fortunately, the news is not uniformly bleak across grade levels, as a recent program evaluation shows. With funds from the National Credit Union Foundation and the Illinois Credit Union Foundation, Mandell and others evaluated an experimental program that was a joint project of CUNA, the National Youth Involvement Board, and the Minneapolis-based National Theatre for Children. CUNA’s theatre program sought to improve the saving-related knowledge and behavior of middleschool students. The study shows that generally the less students knew to begin with and the younger they were, the more financial education benefited them3. Here’s how it worked. During the 2005-06 school year, students in 10 Chicago-area middle schools attended a live, 35-minute play about the usefulness of savings. The performance by professional actors from the National Theatre for Children included four improvisational skits that demonstrated the following crucial financial concepts:

• How to prioritize your needs and wants; • The difference between cash and credit; • Why you should spend less than you earn; and • The importance of starting a savings habit. The purpose of the play was to reach the young audience emotionally as well as intellectually. Suncoast Schools Federal Credit Union, Tampa, Fla., with $5.9 billion in assets and 900,000 members, helped bring a similar theatre program to its area middle schools. “There are interactive, fun skits, and then we go back with workbooks and follow up with related lessons,” says Juli Lewis, the credit union’s youth marketing manager.

What brain research suggests Two professional improvisational actors depicted some problems caused by not saving. In one skit, for example, a young middleschooler received both his weekly allowance and the repayment of a loan by a friend, a total of $15. He quickly spent all the money on a CD and food before learning that his favorite singer would be giving a concert in town that week. A ticket cost $15, which of course, he no longer had. The recent use of scans to record brain images of consumer decisionmaking shows that the evolutionarily older “emotional” parts of the brain (the limbic areas) are prone to override the areas supporting rational decision making (the prefrontal and parietal cortices and the temporal lobes). If the students in the test groups thought of savers as “uncool,” then softening that imagery could help them make better self-interested decisions. Disclaimers aside (See Sidebar “Theatre Program Study Design”), the program pilot has interesting implications for further research. “In less than one hour, the im-

provisational play seemed remarkably effective in improving the knowledge of hundreds of students at a time in an enjoyable fashion,” says Mandell. “It’s possible that a tragedy, focusing on the terrible things that can happen to those who don’t save and who use a lot of debt, could also have an emotional effect on students.” Although no one expects you to become a master educator in addition to your other job duties, recent brain research suggests approaches that can be helpful for any financial educator. (See Sidebar “Education on the Brain.”) The NEFE High School Financial Planning Program is one of the most notable examples of a brain-research-based curriculum.

What works— the younger, the better A second implication is that financial literacy education, and more specifically saving education, could be more effective at lower grades, perhaps before students have been fully swept into the consumption-driven economy. “It is critical that smart spending habits start early,” said Scott Kinney, Washington state Department of Financial Institutions director of communications and president of the Washington Jumpstart Coalition.

Be Sure To Instruct children as young as possible for maximum educational effect. The theater program “unites improv comedy with proven education techniques to help students understand the basics of personal finance—an education that will serve them well throughout their lives.” The study’s overall results show that the theatre program significantly increased student knowledge of saving. (Privacy issues prevented the collection of demographic information other than gender, grade, and whether or not the student had a savings account.) Figure 1-2 shows the relationship among these variables and pre- and post-test mean scores. As expected, students in lower grades knew less about savings than those in higher grades. What is most surprising, however, is the huge amount of learning that occurred in the lower grades—an increase of nearly 20% for sixth-grade students. This indicates that intervention may have its greatest impact on younger students. Students who didn’t already have a savings account also learned relatively more. This finding is not surprising because students with savings accounts have probably given the matter more thought than

Figure 1-2

Pre- to Post-Test Knowledge Gains (By Grade) 80% 70 60 50 40 30 20 10 0%

All Students

Pre-Test Score

Grade 8

Grade 7

Post-Test Score

Grade 6 Percent Gain

Source: Credit Union National Association, Theatre Program Study

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Theatre Program Study Design A total of 10 middle schools participated in this pilot study. Students who viewed the play were given identical pre-tests and post-tests measuring their saving knowledge, attitudes, and behavior. A total of 1,880 students took the pre-test and 1,384 students took the post-test. It is important to put the results of this pilot in perspective. • First, no attempt was made to choose schools randomly, so the results are not representative of middle-school students nationwide, statewide, or even city-wide. • Second, ideal experimental design will match individual subjects for both the pre- and post-tests. This study was able to connect the results of both tests to only a few students—too small a group for meaningful conclusions. • Third, there is no way of knowing just how “sticky” the knowledge students gained from the theatre program. It’s common for students to remember material recently covered in class and to forget it just a few weeks later. It would be useful to test recall for a longer period. The theatre program is no longer available because it proved costly and complex for credit unions to use. Still, the experiment yielded valuable lessons and bolstered theories that it’s far more effective to begin financial education when children are young, to target emotions, and to make it fun.

those without such accounts. Interestingly, female students, who had more knowledge going into the pre-test, learned more from the intervention than did their male counterparts. Mandell hasn’t given up on financial literacy education; he just thinks it needs to be done differently than in the past. “Research suggests some basic principles that can lead to more effective personal finance education,” he says. “With rededication, it’s not too late to modify our educational methods and actually improve financial literacy.” What does a model educational program such as a credit union youth savings club, look like? Based upon the research conducted thus far, the ideal

You Got That Right Recent research suggests that the younger the child, the greater the gains in knowledge from personal finance instruction. 6


financial education program has the following features:

First, a model program is realistic Research shows that motivation accounts for a large part of the difference in financial literacy scores. This suggests that personal finance courses should depict the “new America,” with fewer governmental and employer safety nets, and show students what their lives are likely to be like if they don’t learn to look out for themselves at an early age. Students will respond best to lessons that depict life as they know it in the 21st century. The effect of financial choices should be illustrated as graphically as possible. This means depicting honestly the consequences of poor planning and decision making as well as the rewards that come from the opposite behavior. Budgeting simulations that immerse players in a familiar family

situation are popular with teenagers. Typically these simulations let them “play house” by assigning them fictitious careers with incomes and families with responsibilities. Somewhat familiar with the kinds of dilemmas that heads of household face, players are willing to make choices when they are free to make mistakes without consequences. In this way, they can safely practice realworld decision-making before reality raises the stakes. Very simple tools are also useful, such as using a retirement calculator where students enter the amount of money they think they’ll save over their careers, notes John Faries, National Youth Involvement Board (NYIB) board chair and vice president of accounting and marketing at Space Age Federal Credit Union, Aurora, Colo. “The calculator tells them how long they’d be able to live on that amount, and if it would be enough to allow them to retire,” he explains. “It can be a real eye-opener, especially for teens about to enter the workforce.” You can find many retirement calendars online.

Second, a model program is experiential It’s most useful for students to prepare a financial plan for their own lives, demonstrating exactly how they intend to achieve their objectives. Ideally, students will focus on the actual financial decisions that they’ll make during the semester, such as obtaining a student loan, getting a credit card, or buying auto insurance. That way they can research these actual, major decisions with feedback from their colleagues as well as the teachers. Learning about something in the abstract isn’t very interesting for anybody. Teenagers are no exception. Lin Standke, manager of youth programs in CUNA’s

Education on the Brain The following suggestions are derived from the past 20 years of brain research4: 1. Our brains grow new neurons throughout our lifetimes. Exercise, stress, and nutrition affect this growth. You can’t always control students’ environments, but you can help create a positive, relaxed mood for learning. For example, you might be able find an alternative learning site for students whose school is chaotic, noisy, and under the control of metal detectors and armed guards. 2. Social factors affect brain activity and growth. Activities that create teams of students with something in common can improve comprehension as students help each other learn. 3. Experience in all its forms affects the brain’s ability to change. Don’t rely on the same lesson plans year after year. Try different skill-building methods such as using art projects to help students process what they’ve learned—for example a poster display rather than a written paper—and note which techniques seem to have the best effects on learning. 4. Activity enhances brain development. Try to include whole-body movement in your lessons whenever possible. For example, one of the advantages of a budgeting simulation over a worksheet is that it gets students out of their chairs and moving around the classroom. 5. People learn in different ways. Researcher Howard Gardner introduced the concept of “multiple intelligences.” They are: Intellectual Ability

Sample Indicators (being good at):


Puzzles, reading, writing, charts and graphs, drawing, sensing direction in relation to surroundings.


Listening, speaking, story telling, explaining, teaching, using humor, persuading.


Problem solving, classifying and categorizing, experimenting, calculating, geometric shapes.


Dancing, sports, crafts, acting, miming, using the hands to create or build.


Singing, whistling, playing musical instruments, composing music, remembering melodies.

Interpersonal (understanding others)

Seeing things from other perspectives, listening, counseling, co-operating, resolving conflict peacefully.

Intrapersonal (understanding oneself)

Self-reflection and analysis, awareness of inner feelings and desires, evaluating own thinking patterns.

Educators recognize these intelligences when they say: It’s not how smart you are; it’s how you are smart. In practice, teachers can use the concept of multiple intelligences to reach students better by designing lessons to appeal to students’ different learning styles—most commonly visual, auditory, and tactile. No one learns only one way, so vary your instruction to provide something for everyone—for example, discussion, reading, performance.

Center for Personal Finance, says, “What’s the point of going through the steps of balancing checkbook, if you can’t have a checking account? What’s so magical about the interest compounding if you have no investment choices beyond a basic savings account? Only by allowing youth the financial services that call for them to apply this knowledge will they have any motivation to learn it.” And then consider the deadly effects of the traditional teaching method. “Most adults would consider the topic of budgeting to be a ‘yawner.’ Books and classroom lectures on the subject would likely put most teenagers—and if we’re honest, most adults—to sleep,” Standke points out. “But a spending plan simulation elicits higher levels of interest, motivation, and engagement. These produce higher quality problem solving in students than traditional classroom methods do. The experience of spending and overspending is far more real and more informative than a discussion about budgeting.” Mandell’s Jumpstart study bears this out. Virtually the only factor that consistently results in higher financial literacy scores is playing a stock market simulation in class. This may appear odd to those who point out that a game that can only be won by taking huge amounts of risk (with no downside) may not teach the right investing habits. However, playing such a game tends to increase financial literacy by about 6%, which is considerable. Although research hasn’t yet shown why a stock market simulation is effective, it appears that its high level of interactivity, its real world currency, and its inherent fun all tend to contribute. An interesting footnote is that the literacy scores increase across all subject areas, not just saving and investing.

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A more realistic stock market game that conveyed a true sense of risk aversion, and other games based on current financial products and market conditions, would engage learners with the excitement of competition. The design of the popular NEFE High School Financial Planning Program® (HSFPP) recognizes that students learn best through experience. HSFPP lessons are structured in four steps that begin with what students already know—the Inquiring Phase. Students then augment their knowledge through research (Gathering) and analysis (Processing). Many instructional materials make the mistake of stopping there, with the temporary acquisition of abstract knowledge—temporary because after the test, the information tends to drain away. But the HSFPP reinforces knowledge acquired with assignments that require students to put their new knowledge to work for themselves—the Applying Phase. It’s the experience of this final phase— when, for example, students create a personal budget using the lessons learned—that makes the principles they learned stick long after they’ve left school. Says NEFE’s John Parfrey, “While most financial education programs focus on subjects to be learned, the HSFPP turns the focus on the students. The curriculum is not about creating a budget, but having students create their budgets, their financial plans, their saving plans, their investing plans. The program personalizes learning in ways that students can immediately begin to apply these learned skills in their own lives.” (See Handout “How to Shop for a Financial Insitution.”)

Be Sure To Find ways for students to apply what they’ve learned to their daily lives. Otherwise, their lessons are empty exercises, quickly forgotten.



Third, a model program appeals to emotions Thus far, the Jumpstart surveys have shown that financial literacy depends on students’ personal levels of aspiration. Those who expect to attend a four-year college, work as a professional, and earn a high starting salary tend to have higher financial literacy scores. Exciting research of the neuroeconomists suggests that beneficial financial decision making results from an appeal to emotion rather than straight logic. An oft-cited example is that, when asked if they’re saving enough for retirement, most adults say “no,” and when asked when they will begin to save more, many say “within a year.” However, very few of those who intend to save more actually do so, indicating the discrepancy between instinctual (emotional) and analytical (rational) decision making. There are two ways to overcome this problem. One involves equipping students with a higher level of analytical ability, a task educators have been trying to accomplish in traditional personal finance courses without much success. A second, more promising, approach is to deal directly with emotions, attempting to cause people to do the right thing instinctively. Instruction that encourages emotional involvement will have a more profound and lasting effect than a traditional lecture’s show and tell. Plays and movies that show the downside of poor planning or decision making will make an impact that is “stickier” than pure lecture.

You Got That Right 83% of U.S. children under the age of six watch “screen media” every day5. The average child sees an estimated 40,000 commercials a year6.



Fourth, a model program begins early Mandell’s research indicates that personal finance education is more effective among younger than older students. Learning about the value of saving is greatest among sixthgrade students and nearly nonexistent among students in seventh and eighth grades. This could be the result of early acculturation to a consumer-driven society. Countering this effect means “getting them while they’re young.” Credit unions that promote “full-family membership” can work with parents to start their children on the path to financial literacy almost as soon as they take their first steps. Many, if not all, experts believe that the earlier children learn to manage money, the more likely the lessons will influence their adult behavior. The experts also believe that parents should play an important role in their children’s financial education. Kids don’t grow up in a vacuum. Researchers tell us that 83% of U.S. children under the age of six watch “screen media” every day5. They see an estimated 40,000 TV commercials a year. In fact, advertisers spend $12 billion a year targeting the youth market6. And it’s paying off : The median age for children to buy something (with a parent’s help) is five-and-a-half years old7. This makes it especially odd that there are no guidelines for what U.S.

children should know about money before they begin school. The truth is that by the time U.S. children enter school, they’ve already formed fundamental opinions about money that can affect any subsequent formal instruction, often for the worse. Over time, preschool “benchmarks” would help ensure that fewer students need to “unlearn” unproductive spending attitudes and habits in school. CUNA’s free resource for parents, Thrive by FiveTM: Teaching Your Preschooler about Spending and Saving, includes eight activities that help parents talk about money with their very young children. (See Handout: “How can I teach…”) Nancy Granovsky, family economics specialist for Texas Cooperative Extension and member of the board of FedStar Credit Union in College Station, helped translate Thrive by Five into Spanish. She recommended the resource to her credit union. “We put a link to Thrive by Five on our Web site,” says FedStar CEO Mary Beth Borroni. “Our credit union is in the heart of Central Texas. It’s a young community, and Thrive by Five has been helpful for members and nonmembers alike. It’s something that parents and children can do together. A lot of young people think it’s cool that we’re trying to help them.” Beginning to teach children before they enter kindergarten about the opportunities and responsibilities that money brings promises to have long-term positive effects. It

can help prevent the formation of destructive and self-defeating spending behaviors that often lead to a lifetime of financial instability, overspending, and excessive debt.

What works—simulation Simulations consist of artificial situations that allow players to practice dealing with dilemmas and conflicts. The games imitate reality while reducing complexity to manageable proportions. Players walk in the shoes of other people and learn by experimenting with different solutions to realistic problems. CUNA’s Mad City MoneyTM simulates the balancing of a budget for a fictitious family, given a set income. The simulation, for example, requires teenagers to integrate their knowledge of money, skills in math, attitudes about choices, and money values. Within the program’s two hours, students make decisions with immediate repercussions that might not occur for years in real life. They have the opportunity to modify their decisions and actions and see the impact of changes right away. They have chances to make mistakes—and suffer the consequences of their decisions in a realistic, but safe, environment. Robert Morgan, classroom teacher and director of the Computer, Space Science, Simulation, and Faculty Technology Training

Be Sure To Allow students to learn by making mistakes when the consequences are merely simulated.

Center (University School, Shaker Heights, Ohio), believes simulations are a good way for learners to take on responsible roles, find ways to succeed, and develop problemsolving tools. Simulations make students hands-on participants, not just listeners or observers, he notes. Simulations motivate students because their involvement in the activity is so personal that it makes them want to learn more about the simulated subject matter. What’s more, simulations encourage persistence, creativity, productive research, and cooperative teamwork. Ohio University Credit Union, Athens, Ohio, with $202 million in assets and about 23,000 members, recently purchased Mad City Money. “It’s like the real world,” says Tricia Hale, member development specialist. “Each kid is assigned an occupation and a family status, and they’re challenged by necessities like transportation, food, and child care. They’re supposed to have $100 at the end of the day for savings.” Suncoast Schools, with $5.9 billion in assets and 900,000 members, uses the simulation too. “First we teach about check writing and

Be Sure To Base your efforts to increase market penetration among adults over age 18 by developing a “feeder system” of active members younger than that. balancing, and being on a budget, then we get into real-life situations,” says Juli Lewis, youth marketing manager. “The kids love it and really have fun with it, and it opens their eyes to what costs are out there. It’s not just rent, it’s all the responsibilities.”

The challenge for credit union educators Applying these key principles properly will require rigorous evaluation of results to ensure that no more time is wasted in pursuing methods that don’t pan out. Further research will undoubtedly uncover more effective approaches as well as educational dead ends. However, entering the battle against financial ignorance armed with research is certain to generate much better results in the next 10 years. The good news is that more credit unions are making efforts to

Figure 1-3

2007 Youth Financial Education Expenditures by Asset Range* $25,000 20,000 15,000 10,000 5,000 $0

Less than 10M$10M 20M


50M- 100M- 250M- More than 100M 250M 500M $500M

*Based on credit unions that provide youth financial education. Amounts exclude staff time and salaries. Source: Credit Union National Association.

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educate young members than in the past. Two-thirds of credit unions in 2007 said that they provide financial education to members under age 18, spending nearly $9,000 a year, on average8. Figure 1-3 shows how that spending breaks down by asset range. The bad news is, this age group is still poorly represented among national credit union membership. The U.S. Census Bureau shows that those under age 18 currently account for about one-fourth of the population9. Several years ago, CUNA estimated that only around one in ten were credit union members. “My instinct tells me the number would be higher today, given many credit unions’ redoubled efforts to attract, serve and educate the youth market, but

Resource List

Where To Go for More Information • Jumpstart Coalition for Personal Financial Literacy (state coalition contacts)—Select State Coalitions • Learning Styles and Multiple Intelligence • Mad City Money™—Search 27732 • National Youth Involvement Board • NEFE High School Financial Planning Program and Thrive by Five™: Teaching Your Preschooler About Spending and Saving—Select Resources for Youth • Value of a Dollar: Teaching Your Preschool Child—Search 26672 • Value of a Dollar: Teaching Your K-8 Child—Search 27271 Credit Union Web sites • FedStar Credit Union • Ohio University Credit Union • Space Age Federal Credit Union • Suncoast Schools Federal Credit Union



there’s no doubt that this age group is still poorly represented,” says Jon Haller, CUNA’s director of corporate & market research. Underrepresentation extends into Generation Y. Young adults aged 18 to 24 comprise about 10% of the U.S. population10, and 18% of eligible nonmembers, but only 6% of credit union members11. Why do credit unions do so poorly among this group? This isn’t merely an academic question—these young people are about to enter their prime borrowing years. Maybe credit unions would have more 18-to-24-year-olds if they didn’t do such a lousy job of attracting younger members. With such a poor record, how can credit unions justify trying to attract youth with programs that rely mainly on trinkets and teddy bears? A youth program that merely entertains is vulnerable to competing attractions. But a youth program that delivers financial services and education builds a lifelong relationship that can withstand competing offers. Education in how to use more sophisticated financial services can build on children’s curiosity about money and help to instill financial confidence and responsibility. Chapter 3 focuses on products and education programs that help young people learn to spend, save and manage their money. Chapter 4 covers teaching youth to borrow.

Long-term educational benefits Personal finance instruction can help young people develop lasting financial behaviors, even when you might not think you’re getting through to them. Kelly Schermerhorn, CEO of CES Credit Union in Mt. Vernon, Ohio, has a couple of anecdotes that make this point. “When I did financial literacy training for youth in our credit union, I talked about

Be Sure To Look for long-term positive effects from financial education. Some lessons take time—and “hard knocks”—before they sink in. paying yourself first, saving a portion of each paycheck. In my very first class there was a young man named Corey who subsequently graduated and went into the Air Force,” Schermerhorn says. “I saw him about two years after the class. He’d immediately signed up for payroll deduction, to save almost 10% of his income in his credit union account. He got it—he understood the importance of paying himself first. He’d learned that if you never touch the money, you won’t miss it.” More recently Schermerhorn has been conducting financial education in schools. “I teach at an alternative program where students are getting their graduation equivalency degrees,” he says. “I talk about ‘laddering’ investments [staggering the maturities], which seems like a complex topic for this audience. But about six months later I ran into one of the students working at a local grocery store. And he said, ‘I want you to know that, since the store offers direct deposit, I’m having $10 taken out a week. When I’ve been here a year I’ll have $500 and I’ll buy a certificate of deposit.’” The student talked about laddering, using the same terminology that Schermerhorn had introduced in the class months ago. This suggests that financial education can affect students in positive ways that don’t show up until months or even years later. It suggests that the true value of financial education and your youth program will become apparent only when you take the long view.


How to Shop for a Financial Institution A Guide for High School Students  Does a parent or guardian need to give permission or be a cosigner on my card?  What would my credit limit be? What would I need to do to raise the limit?  What interest rate (APR) would you charge me?  What types of credit card fees do you charge? (e.g. cash advance, over limit, late payment) Loans  What types of loans do you offer to someone my age?  Does a parent or guardian need to give permission or be a cosigner on the loan?  What are your requirements for cosigners?  How does my individual credit score affect the interest rate I will pay?  Do you have flexible term limits? Are there any restrictions or fees for paying off a loan early?  Do I have to do all of my business with you in order to receive the best rate? Online bill pay  Do you offer online bill pay? Is there a fee?  Are there minimum account requirements to be eligible? Personal preferences  Does the staff communicate clearly?  Does the staff treat me with courtesy and respect?  Does the staff provide me with helpful information or do they try to sell me products and services that I don’t want or need?  Do they have specific products and services for people my age?  Do I like doing business with them? Philosophy and community involvement  How do you support the communities where you operate?  How do you use your excess revenue? Who determines this?  Do you have any way for me to become involved (e.g. a youth advisory group)?  Do you offer other services for people my age (e.g. student loans, scholarships, or financial education)?

Just like different stores at the mall, banks and credit unions offer products and services at different rates. Some financial institutions offer special rates based on your age or if it is your first account. So, it can pay to shop around! See for yourself: Stop in—or call—at least two financial institutions and compare answers to these questions: Convenience  Is there a branch within walking or biking distance? Will I need to drive or take a bus?  Do you have evening or Saturday hours? Are you open when I can get there?  Where are your ATMs? Is there an annual charge for an ATM card or fees for using it?  Do you offer online banking? What services are available online? Are there any charges or restrictions because of my age? Account opening and information access  What kind of identification do you require to open an account?  Can I access my account information online?  Can I access my account information by phone?  Are there fees or limits for account access?  Do you require a parent’s or guardian’s signature?  What rules change when I turn 18? Savings accounts  What is the minimum amount to open an account?  What happens if my balance drops below the minimum?  Is there a charge for withdrawals or transfers?  What is the current interest rate? Is there a minimum balance to earn interest? Checking accounts  What is the charge for a box of checks? Are “designer checks” more expensive? How many checks are in a box?  What is the minimum amount to open an account? What happens if my balance drops below the minimum?  What happens if I overdraw my account? Do you have overdraft protection? What does it cost?  What fees do you charge for overdrafts? What happens to my NSF (nonsufficient funds) checks?  How much money do I have to have in my account to earn interest and what is the interest rate?  Is there a monthly service fee or fees for number of checks written per month?  Do you keep my cancelled checks for free or return them to me for a fee?  Can I get a debit card and what are the fees?  Can I get personal money orders and what are the fees? Credit card  What are the age and credit history requirements to receive a credit card?

How to find a credit union: Visit and click on “Locate a Credit Union.” How to find a bank: Visit and click on “Bank Find.” © 2004 Credit Union National Association, Inc. May be reprinted for educational, non-commercial purposes. All other rights reserved. For a reproducible copy, go to—Select Resources for Youth, select All Youth Resources.

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Thrive by Five TM: Teaching Your Preschooler About Spending and Saving





 Direct members to for more “What your preschooler should know about money” activities.






 For a reproducible copy, go to cunafi.orgâ&#x20AC;&#x201D;Select Resources for Youth, select Thrive by Five.

W h a t M a k e s a Yo u t h P r o g r a m E f f e c t i v e



Chapter 2

Action Checklist

3 Teach and Deliver the Basics  

Survey your coworkers and members. What are their children’s spending habits? What are their saving goals?

Check with other credit unions, your local chapter and state credit union league, and other financial institutions to learn what they’re doing with youth programs. What modifications might your youth program require?


Review your current lesson plans in light of the phases of financial development discussed in this chapter. Do you need to update references and statistics? Are online resources you recommend still available and up to date? Are there gaps in your materials or curriculum? Do your lessons mesh with state curriculum standards? Use all channels at your disposal—Web site, newsletter, seminars, workplace and lobby posters, and employees—to emphasize the importance of teaching children good money habits. Are staff— especially front-line staff, loan officers, and call-center workers—prepared to recommend your youth program when members give them a conversational opening?

Use special events such as National Credit Union Youth Week and its National Saving Challenge to generate excitement about saving.

Check with your attorney to ensure that your youth service offerings don’t conflict with state law or your credit union bylaws. Establish policies that legally comply. How will the features of youth services differ from those for adult members?


Look for ways to customize turnkey educational programs to make them relevant to your young audience. Can you modify presentation slides and/or handouts with your credit union’s name and logo and references to your products? Are there opportunities to tie local current events to your personal finance lessons?

Look for ways to teach to students’ different learning styles. Can you augment your lessons with music or physical activities? Can you balance “teaching by telling” with teaching through demonstration and simulation?

Include a way for students to provide feedback to help you improve lessons. (See Chapter 9.)

Teach parents to recognize “teachable moments” that give them an opportunity to communicate a money lesson or value to very young children.

Build measurement of effectiveness into your program design. Look for ways to measure youth program effectiveness, both short- and long-term. How do you define “success” for each teaching component and event? (See Chapter 9.)

Model Youth Program Guide Best Practices & Proven Techniques

Chapter 2:

Teaching to Spend, Save and Manage Money Summary Credit union youth programs should introduce young people to financial products when they’re ready for them, so that they know how to manage money before they’re on their own. Providing the services young people need and the education to use those services responsibly is not simply an expense. It’s a sound investment for a credit union to make, a calculated long-term business development strategy.

Highlights u Children in the U.S. grow up immersed in the consumer economy. The consumer initiation of the typical child proceeds naturally from the first store visit at a median age of two months to the first independent purchase at the median age of eight years.

u Young people pass through four phases on the way to financial independence: learning to spend, to save, to manage money, and to borrow. The rate at which young people pass through the phases is related to maturity, not age. Each phase creates a need for different financial services.

u Providing appropriate services to qualified youth contributes to long-term member retention. Checking accounts and debit cards lead to electronic access. When teenage members move away to work or school, they’ll be less likely to sever their electronic credit union ties.

u Many parents demonstrate poor money-management habits. Credit unions should provide tools that help parents teach children about wise spending, saving, and money management.

u It’s also important to involve frontline staff in cross-selling youth financial education and products.


ou’re out shopping with your toddler, who spots a toy she really wants. “Can I have it---please, please, please?!” she whines. “I don’t have any money with me,” you evade. “That’s OK, just use your cardthing,” she quickly replies. Children learn at a very early age that money is somehow connected to getting things. They don’t understand that there’s a limited amount of money available, that you should save for the things you need and want, and that you shouldn’t spend more than you have. They’ve observed that plastic cards equal money, and don’t understand why you can’t spend without end. Where would they possibly have learned these things? Oh … that’s right … from us, the adults in their lives. Children model their behavior after their parents’, as you know if you’ve ever heard your young child scolding his or her stuffed animals, using words and a voice that sound all too much like yours. Unfortunately, too many parents demonstrate poor money-management habits, having witnessed their parents’ poor habits, and so on, and so on. The constant barrage of advertising that today’s kids face doesn’t help either. Credit unions can help families learn positive financial behaviors. This chapter covers helping parents teach their kids about money— spending, saving, and managing it. And it recognizes the fact that children mature at different rates. Therefore, credit unions should give qualified youth access to financial services based on maturity and education, not just chronological age.

How to—get started When your credit union decides to design and implement a youth program, where do you start? How do you begin? Start with credit union coworkers, especially those who have children. Survey your

members. Find out their children’s saving and spending habits and specific financial needs. Check with other credit unions, your local chapter and state credit union league, and other financial institutions to learn what they’re doing with youth programs. There’s no better way to motivate young members to learn about wise money management than by providing them with a full range of financial services as they become mature enough to handle them. By establishing your credit union now as the best source of all your young members’ current and future financial services, you’ll ensure a thriving membership in the future.

Be Sure To Search the Jumpstart Clearinghouse for lowcost educational materials. (See Resource List.) Use the Jumpstart curriculum standards to evaluate materials before you buy. Check out CUNA’s financial literacy resources at



With education and supervision, many minors can responsibly handle checking, debit cards, and credit. Use National Credit Union Youth Week, the National Youth Saving Challenge, and other builtin opportunities such as International Credit Union Day and your annual meeting to reenergize young savers. Then follow up with the services and education they need to grow into full membership before they leave home.

What Parents Should Know According to Heather H. Harris, , vice president of community development at Isabella Community Credit Union in Mt. Pleasant, Mich., the topics that parents ask for help with most are: • How to teach children quality money skills—when they themselves might not have the skills. • How to enrich their children’s lives without spending more. • How to teach life-long lessons. • How to live within their means and pay themselves first. • When and how to give allowances.

How to—teach parents to teach kids It’s also important not to overlook the potential for youth programs to educate adults. State Employees’ Credit Union in Raleigh, N.C., has a youth program with 108,000 savings accounts and $41.6 million on deposit. Its program for teenagers has 68,000 savings accounts with $23.7 million on deposit and 17,000 checking accounts totaling $4.3 million. The two programs cover young people from birth to age 18, and the credit union also offers products geared toward young adults, which build on the good behaviors they’ve learned in their youth. (See Handouts “Teaching Preschoolers About Money.”) Leigh Brady, senior vice president of education services for State Employees’ says, “As parents, we’ve 16


spoiled our children. We want to give them things, especially things we didn’t have when we were young. Our youth programs are designed to help parents teach their children how to be responsible with money, how to plan, and how to achieve financial goals. When parents participate, their own behavior also changes, and they often become better members themselves.” So be sure to build support for your youth program among adults. Share lesson plans with them. Invite them to sit in on youth sessions. Recruit them to help with teaching simulations. Anticipate parents’ questions and keep them fully informed about the educational purpose of activities. By drawing parents into youth programming, you might be surprised to find out that you’re also educating some parents in better money management behavior. Brady adds. “When we do presentations, even teachers say, ‘Wow, I didn’t know that.’” Families are busy, and your educational seminars compete with many other activities for their attention. You have to make it easy for them to attend—and make your invitation compelling. For example, just the name of your parent seminar can influence attendance. Which sounds more interesting: “Family Money Issues” or “Do You Argue with Your Kids about Money?” (See Checklist “Conduct a Youth or Parent Session.”) Also consider relieving parents of the need to find child care by providing supervision or a separate program for young children at the same time. “We always extend invitations to parents as well as students,” says Tina Mike, education director at APG Federal Credit Union, Aberdeen, Md. The invitation flyers include RSVP requests, and credit union representatives follow up with phone and e-mail reminders. “Many times we time the sessions around a usual meal and

we provide free breakfast, lunch or dinner. We often tag onto an existing event at a school or library that we know parents will already be attending,” says Mike. “Or we couple the lesson with a student award program or showcase that the parents will be eager to attend.” Parents do understand the need to teach kids about money, Mike indicates. “But I get the sense they don’t like to do it. When someone helps them do something they might not be very comfortable with, they latch on to it, especially if it’s free.” And they’ll thank you for it. At every class, APG Federal distributes evaluation forms to get feedback for future sessions. “The last question is always, ‘What other topics would you like to learn about?’” Mike explains. “We pay attention to what our members say and do our best to incorporate their feedback into our plans—whether through seminars, workshops, Web-based education, newsletter articles, partnering with external community subject-matter experts, or providing free financial literacy educational materials from our own education department’s resource library.” APG Federal also invites members and the community to contact the credit union via email with questions, concerns, or suggestions about its financial-literacy initiatives. “My direct phone line is the number listed in all of our educational materials, and several times

Be Sure To Include grandparents, aunts and uncles in your programs. They’re important in a child’s life and their approval can often motivate children in ways that parents, as primary disciplinarians, can’t. Train your frontline staff to listen for cues that a family has a new child, and open a dialogue by saying, for example. “Wouldn’t your niece or nephew appreciate a birthday savings account deposit?”

Be Sure To Involve your frontline staff in cross-selling youth financial education and products. It’s easier than you might think, says Marty Kelly, senior vice president of marketing and business development at US Federal Credit Union, Burnsville, Minn. “In my experience, cross-selling youth services is one of the easiest requests to make of frontline staff,” he says. “With some exceptions, credit union lobbies are not the ideal place for a child, and the younger ones in particular really tend to squirm. Our tellers and financial service representatives are perpetually seeking something to offer visiting children, and those who have kids of their own know that candy is anything but a calming distraction.” Offering financial education materials works much better. “The opportunity here lies in providing young visitors with fun but educational material that emphasizes the value of saving at a credit union—maybe a credit union-friendly activity book or an inexpensive piggybank,” Kelly continues. “These materials can and often start a dialogue about the importance of saving, which in turn can lead to opening a youth account, making a deposit, or developing a savings plan.” each year I poll our own employees to see what challenges they’re helping members deal with on the front line, or that our employees themselves may be dealing with,” says Mike. Member feedback tells her that parents often seek out financial education to help young people avoid mistakes that they’ve made. “Or they want kids to understand that there’s only so much money,” Mike says. “A lot of kids want to ‘keep up with the Joneses,’ and we’re another voice telling kids that, when parents say they can’t afford something, they mean it.” They’re usually seeking education for themselves as well as their children, she notes. “The most requested topic for us is budgeting. Parents also want their kids to understand the importance of education, that their grades today lead

to more earning power tomorrow. They want to know how to fund their children’s college education.” To teach parents, says Mike, “You have to take real-life experiences and turn them into teachable moments around money and family finances. To capture or create those moments during our classes, we use reading, games, hands-on activities, and Web-based tutorials parents and children can do together. You have to make it fun and interactive.” Once families try tutorials and other activities in class, they’re much more likely to use them at home. Her credit union invites different age groups of young people in for educational sessions, always including parents. “We have the most success in engaging whole families when we go to them—to a Boy or Girl Scout meeting, or a back-toschool night—where they’re already there,” Mike says. “Then we’re the most successful in terms of numbers reached and the degree of engagement.” Often parents have opened new doors of opportunity for APG Federal. “They might say, ‘My kid came home and said you were in her class today; could you talk to my Scout Troop, my church youth group, or my eighth-grader’s class?’” says Mike. During most seminars and community events (although not during regular school classroom visits), APG Federal offers the opportunity to establish new memberships or add additional services to existing memberships. “I track these numbers, and total outreach annually— both the number of educational sessions we teach and the number of individuals we reach,” says Mike. “I also track the program growth in each of our youth savings club programs, both in terms of new memberships, closed memberships, number of services, and the program penetration rate as compared to age-eligible memberships.”

Te a c h i n g t o S p e n d , S a v e a n d M a n a g e M o n e y

The phases of becoming a financial consumer Designing substantive youth programs means recognizing how children’s awareness and use of money change as they grow. To build lifelong credit union members, youth programs must address children’s developmental needs. “Think of the young people who’ve grown up before your eyes,” says Rena Crispin, managing editor of Googolplex in CUNA’s Center for Personal Finance. “In high school, they want their independence, and money is a way to exercise freedom. In middle school, they want to belong, and money is a way to have what their friends have. In elementary school, they want it NOW, and money is a way to instant gratification. And as preschoolers, they want to mimic Mom and Dad, and money is a way to act like a grownup.”

Crispin says, “We shirk our responsibility if we wait for young adults to get in money trouble and then come to us for help. The 25-year-old considering bankruptcy got to that point of desperation after a lifetime of bad money habits. Think of the influence we could have if we did more to guide kids when they first became consumers. For most kids in this country, that’s way before kindergarten.” This means we need to do more than educate adults to be better money managers. We must also train them to teach their own children to manage money wisely—and the earlier the better. Children in the U.S. grow up immersed in the consumer economy. According to James U. McNeal,



You Got That Right Median ages for U.S. children to experience their first: â&#x20AC;˘ Store visitâ&#x20AC;&#x201D;2 months â&#x20AC;˘ In-store requestâ&#x20AC;&#x201D;2 years â&#x20AC;˘ In-store selectionâ&#x20AC;&#x201D;3.5 years â&#x20AC;˘ Assisted purchaseâ&#x20AC;&#x201D;5.5 years â&#x20AC;˘ Solo purchaseâ&#x20AC;&#x201D;8 years1 retired marketing professor at Texas A&M University, the median age for a newborn to experience the inside of a retail store is two months old1. The consumer initiation of the typical child proceeds naturally from there to the ďŹ rst independent purchase at the median age of eight years. McNealâ&#x20AC;&#x2122;s research suggests a developmental model for introducing children to ďŹ nancial services. It describes the stages children might be expected to pass through on the way to ďŹ nancial independence. The rate at which any given child might be ready to begin each phase will vary by maturity level and family circumstances. And unfortunately thereâ&#x20AC;&#x2122;s no guarantee that any given childâ&#x20AC;&#x201D;or adultâ&#x20AC;&#x201D;will master any or all of the four. However, credit unions that want to assist children in becoming responsible ďŹ nancial consumers can use the model to design a youth program that introduces young members (and their parents) to the services they need and can learn to use properly before age 18. (See Fig. 2-1.) The developmental modelâ&#x20AC;&#x2122;s phases, which recognize a young personâ&#x20AC;&#x2122;s growing educational and service needs, are: 1. Learning to spend 2. Learning to save 3. Learning to manage money 4. Learning to borrow Unfortunately, itâ&#x20AC;&#x2122;s common for credit unions to structure youth programs by age. If a credit union has more than one club, theyâ&#x20AC;&#x2122;re typically described as being for children and teenagers of various 18


ages. Itâ&#x20AC;&#x2122;s tempting to consider the learning phases above as a guide for youth program age limits. However, the phases arenâ&#x20AC;&#x2122;t age-speciďŹ c. Children develop at diďŹ&#x20AC;erent rates and will be ready for the added responsibilities of, say, a checking account, at diďŹ&#x20AC;erent times. In addition, the phases overlap, so itâ&#x20AC;&#x2122;s necessary to encourage an overall saving habit throughout childhood and adolescence.

What worksâ&#x20AC;&#x201D;services based on maturity level â&#x20AC;&#x153;With youth programs, it would be easy to say young people canâ&#x20AC;&#x2122;t have a certain product until they reach a certain age, but thatâ&#x20AC;&#x2122;s not how life works,â&#x20AC;? says State Employeesâ&#x20AC;&#x2122; Brady. â&#x20AC;&#x153;You need to be ďŹ&#x201A;exible; children mature at diďŹ&#x20AC;erent rates. You

might have an extremely mature 14-year-old. Another young person might not be mature enough to handle a checking account until age 19.â&#x20AC;? Thatâ&#x20AC;&#x2122;s why State Employees

Be Sure To Consider childrenâ&#x20AC;&#x2122;s maturity levels rather than their ages in providing them financial services. oďŹ&#x20AC;ers three diďŹ&#x20AC;erent youth programs, targeted to young people of diďŹ&#x20AC;erent phases of development, and is ďŹ&#x201A;exible about allowing them to use a wide variety of ďŹ nancial services based on their developmental levels. â&#x20AC;&#x153;It really helps to involve parents,â&#x20AC;? Brady says. â&#x20AC;&#x153;Theyâ&#x20AC;&#x2122;re the ones who know best when their children are ready to use products like checking accounts, debit cards, and credit

Fig. 2-1

Development Model: Young Membersâ&#x20AC;&#x2122; Evolving Need for Financial Services Birth

Age 18

Phase 1: Learning to Spend   













Phase 2: Learning to Save

Phase 3: Learning to Manage Money


You Got That Right Teenagers aged 16 to 18 spend $26 per week on average ($1,352 per year), while 13-15-year-olds spend half that2. cards.” With checking and loans, for example, the credit union requires parents as cosigners. “We talk to the parents and say, ‘This is a joint decision between you and your child,’ ” Brady explains. “Parents know their children and their maturity levels.” Just what do parents and their children need to learn during each developmental phase? What products and services should credit unions make available to young people? Let’s consider these questions, using McNeal’s model of consumer development is as a guide.

Phase 1: Learning to spend We’ve all seen examples of how young children catch on quickly to money’s essential purpose as a medium of exchange. Their wants are powerful and once they observe that money can satisfy those wants, they want money too. And of course, as children grow into teenagers, their wants become more expensive. Even very young children are bombarded by advertising messages urging them to spend. If parents don’t help them interpret these messages by instilling their own values about the money, they’re leaving it up to the advertisers to

Examples of Key Spending Skills From the National Standards in K–12 Personal Finance Education: • 4th Grade—Give examples of situations in which financial information would lead to better decisions. • 8th Grade—Analyze and evaluate advertising claims. • 12th Grade—Determine whether financial information is objective, accurate, and current. (See Resource List.)

do the teaching. Many parents have heard their own children parrot the often outrageous claims of TV commercials as if they were gospel. Credit unions can provide tools that help parents teach children about wise spending, and that children themselves can use to develop good habits. Teach teenagers to make smart consumer choices. Teach first graders to add and subtract coins. Teach kindergarteners to recognize different coins and help parents instill healthy values about spending and saving money.

What works— spending class As part of their youth financial education programs, many credit unions include classes on learning to spend through budgeting. As with any youth education, it’s important to keep the classes realitybased and experiential. Here’s how State Employees does it. “When I teach young people budgeting, I’ve found the thing that works best is to have the students develop a real financial plan,” says Brady. She asks each student to come up with five spending goals. “It might be to buy a car or a new dress for prom, or they might want to go to a concert—it really varies,” she explains. “It’s meaningful to them because it’s something they really want.” Brady helps the students narrow down and prioritize their lists. “We take the most important item and figure out how much it costs. Let’s say it’s $300 for a prom dress.” She asks: “How much do you bring home each month? Did you remember to take taxes out? What are your expenses each month— gas, your cell phone, going out with friends—and how much do you have left?” Often there’s nothing left. “They see there’s no way to save for the dress if they’re spending that much each month,” says Brady. “Then we get into wise spend-

Te a c h i n g t o S p e n d , S a v e a n d M a n a g e M o n e y

ing; it’s all about wants and needs. In kindergarten my daughter would always say, ‘I need this,’ ” she continues. “We’d say, ‘Do you need it or do you want it?’ That’s what I do with these teenagers. ‘Do you absolutely need to spend that much each month to have fun with your friends?’ ” The teenagers often admit that they could cut their entertainment costs, and this easy, hands-on, real-life exercise really helps them see how developing and following a spending plan gets them what they want. “It’s a lot of fun, too,” adds Brady. “It doesn’t matter if you’re talking to second graders, tenth graders, or adults. When you’re teaching something they don’t know about money, you’re making a difference. It’s something that will last their whole lives.” (See Tips “Smart Shopping.”) And this simple exercise doesn’t

Be Sure To Allow children to explore how needs and wants change with age and circumstance. have to cost a fortune. Even a small credit union with limited resources likely could invite a group of students in for a couple hours, or send a volunteer to a school classroom periodically. The only materials needed are pencils, paper, energy, and a sense of humor. (See Sample “Volunteer Recruitment Article.”)

Phase 2: Learning to save Saving is the other side of the spending coin. Young people need to learn that saving is the way to accumulate the money to spend on things that they need and want. Parents can open savings accounts for their newborns, possibly with a financial incentive from your credit union. Many people equate youth financial education to forcing them to eat their vegetables. This attitude presents saving as something



Be Sure To Use tangible saving incentives. “Teenagers want immediate gratification, so saving bonds often don’t work well as prizes. Popular are homecoming tickets, yearbooks, and retail gift certificates,” says Rose Evers, administrator of marketing and community development at OUR Credit Union in Royal Oak, Mich. “When our school store sold fresh-baked cookies, the smell filled the building. We gave away a three-pack of cookies to every student who opened a new account. That was a great promotion. Kids love food!” For Erie Federal Credit Union, Erie, Pa., giveaways with each youth deposit are a great incentive, says Sandi Carangi, vice president of business development and financial literacy. “We have a treasure chest that children can pick a prize from when they make a deposit of $10 or more. When we visit schools, we offer $5 coupons for an initial deposit to a youth savings account. These are working very well for us with older students.” To measure how the incentives correlate to accounts opened, Erie Federal runs monthly reports using its MCIF (Marketing Customer Information Files) of new accounts opened and amounts deposited, by age. “We also track the number of $5 youth coupons returned to the credit union,” Carangi says. children should do because it’s good for them, not because they have reasons of their own to save. That’s why it’s vitally important to allow children to choose some of their own future spending goals—they’re self-motivating. As soon as children are old enough to have small financial goals (to want something that costs money), they’re old enough to participate in managing their savings. Your credit union can help them— and their parents—learn how. Youth programs usually offer basic savings accounts. State Employees calls its “Fat Cat” account, which pays an additional 25 basis points (0.25%) interest, a “starter savings account.” Space Age Federal Credit Union, Aurora, Colo., focuses on savings accounts for its youngest members, too. “We want to get them in here and get them to start saving,” says John Faries, vice president of accounting & marketing. “We preach the concept of ‘pay yourself first’: If you get $10 for your birthday, 20


deposit $3 or $4 before spending any.” Youth savings accounts start earning dividends at $25 for further encouragement. Space Age also has a savings club at a nearby elementary school for fourth graders. “I go in once a week to collect the savings, and I have a chart that shows balances,” says Faries. A+ Federal Credit Union, Austin, Texas, offers the Green Apple Savings Club Program, which allows young children to open savings accounts with just $10, explains Dawn Ambuehl-Sadek, member education specialist. The accounts earn daily dividends, which are paid and compounded monthly. Schools can integrate the program into their curriculum, and members participate in regularly scheduled deposit days to give them hands-on experi-

You Got That Right Teenagers aged 13 to 18 have an average of $1,044 in savings, up from $822 in 20063.

ence with financial transactions. Student “junior tellers” help collect and record the deposits. Are your current children’s savings accounts growing at a steady pace with regular deposits? As these young savers grow older, are they using other credit union services? It’s important to set youth program policies that further these goals. Your credit union must establish policies for when a young member may have a savings account without joint ownership by an adult, or withdraw funds without a cosigner. Some financial institutions set this at age 12 or 13. Others vary age limitations based on the member’s character, academic achievement, and overall ability to handle the account. Whatever policies and procedures you establish for your youth savings program, be on the lookout for minimum deposits that do not grow—these accounts are obviously costly over time. Some credit unions shy away from promoting children’s savings accounts because they believe a minimum deposit can sit for years with no activity. This situation is easily remedied by educating and motivating both parents and children. Other credit unions offer youth CDs, such as A+ Federal’s StartUp share certificates. Young members can buy them for just $10 and add to them in increments of $10. The certificates pay 25 basis points more than regular certificates. While the product is designed especially for young savers and investors, there’s no age limit, just a $1,000 cap. “That way any member who finds it difficult to save can use the product,” says Ambuehl-Sadek. “We offer a one-year Share Builders Certificate,” says Patty Browne, community relations manager at Arlington Virginia Federal Credit Union, Arlington, Va. “The minimum to open it is $25, the rate is the same as our regular oneyear certificate, and the member

Examples of Key Saving Skills From the National Standards in K–12 Personal Finance Education: • 4th Grade—Describe ways that people can cut expenses to save more of their incomes. • 8th Grade—Explain why saving is a prerequisite to investing. • 12th Grade—Identify and compare saving strategies, including “paying yourself first,” using payroll deduction, and comparison shopping to spend less. (See Resource List.)

can make additional deposits to it anytime during the year, including payroll deposits. It’s been popular with our youth members as well as regular members who find it hard to save and not dip into the savings.” Coastal Federal Credit Union, Raleigh, N.C., also has 12-month student certificates for anyone 21 and under, with a higher interest rate than its regular 12-month CD. The minimum deposit is $100, where the regular minimum is $500, and unlimited additional deposits can be made in $100 increments, says Joe Mecca, director of community and corporate relations. Bellwether Community Credit Union, Manchester, N.H. is considering a special savings program for first-time car buyers, indicates Madeline Anderson, marketing manager. “We’d allow a special savings CD to save up for the down payment on a first car, at a special dividend rate, and if members also get their auto loans through our credit union, they get our ‘platinum rate’ on their first cars,” she says. “That would be 20 basis points off our current rate, which is usually

reserved for our larger depositors.” Some credit unions tie a savings program to their youth loan program. The young borrower must deposit a set amount into a savings account regularly with each loan payment. With a good incentive program like this and parents’ involvement, you can ensure that young members continually add to their savings, until they’re ready to explore more sophisticated investments.

Investing on their own “I first met Corey’s mom after she and her son had been injured in an automobile accident,” says Jamie Letcher, a financial advisor affiliated with Great Wisconsin Credit Union in Madison. “They weren’t hurt badly, but both got small settlements.” Corey’s mom invested the settlement money in two separate moderate-growth mutual funds, one for Corey and one for herself. When Corey turned 20 in 2006, he was finally ready to invest on his

Be Sure To Give young people investment facts and show them how to use online calculators, for first-hand, experiential knowledge of the magic of compounding. own. “One day the phone rings and I hear Corey’s mom say, ‘My son has $3,000 and asked me to call you for an appointment so he can invest it,’ ” says Letcher. He told Corey: “There’s a tradeoff between risk and return. If you

Examples of Key Money Management Skills From the National Standards in K–12 Personal Finance Education: • 4th Grade—Give examples of household expense categories and sources of income. • 8th Grade—Discuss the components of a personal budget, including income, planned saving, taxes, and fixed and variable expenses. • 12th Grade—Analyze how changes in circumstances can affect a personal budget. (See Resource List.)

Te a c h i n g t o S p e n d , S a v e a n d M a n a g e M o n e y

You Got That Right 63% of teenagers aged 13 to 18 say that they are knowledgeable about money management, including budgeting and investing. However, 64% say that they’re worried about being able to support themselves after graduation4. put your money in a safe, it’s 100% secure, but it won’t grow.” Then he showed him how, at the other end of the extreme—the lottery—Corey was most likely to lose his investment. But Letcher never told Corey what to invest in. He simply and respectfully presented the facts at that first appointment and gave Corey time to make his own decisions. A week later, after Corey had time to review the material, he was finally prepared to make his own investment decisions. “The original premise behind credit unions is thrift,” says Letcher. “And thrift is what this is all about too. Lending is the backbone of credit unions, and the engine that drives them. Saving is the gas that drives those engines.” Letcher advises, “Be proactive and preemptive with teenagers. You and their parents are going to teach them discipline and rigorous saving habits. The second they start to make their own money, it ought to resonate: ‘I just made $200. I need to sock away $20.’ ”

Phase 3: Learning to manage money Money management presents challenges for even the youngest child. Simply having money in your pocket means worrying about losing it. Then there are the challenges of not wasting money and keeping track of it so you can make it last. The reality is that money management for kids isn’t much different than it is for adults. (See Sample “Teenage Budget Worksheets.”) “While most credit unions offer a youth program, they’re missing the



boat if they don’t provide a teenage program to move young adults into a variety of financial services, including education,” says Steve Carr, public relations and education specialist at Boulder (Colo.) Valley Credit Union. Credit unions must offer more than savings accounts to young people—a market in which credit unions have always been weak— to secure their loyalty by the time they’re adults and build lifetime relationships. Does your credit union have the innovative services and comprehensive programs that appeal to members under the age of 18?

Be Sure To Invite grandparents to start a college savings fund for each grandchild at birth. Golden 1 Credit Union in Sacramento, Calif., offers products and services designed for more mature youth, including ATM cards, savings accounts that can be used for college, and telephone and online account access. These products encourage young people to save and to learn prudent financial manage-



ment skills early, before they go off to college or work. To encourage responsible youth to become long-term, active credit union members, the Golden 1 Freedom Checking account gives qualified teenagers with a B grade average or higher the opportunity to have their first checking account without a cosigner. A relatively lowlimit ATM/debit card allows easy access to their accounts while helping them learn the basics of good financial management. These youth-based products and services are designed to appeal to new and existing members, and move them from the learning phase of Goldie’s Super Savings Club to active adult usage of a full range of services. Golden 1 considers developing and retaining youth accounts an important core strategy. A strategic approach can help with long-term member retention. Teenage members of State Employees can sign up for checking accounts and debit cards through its Zard program. State Employees also takes advantage of teenagers’ comfort with technology to give them electronic access to check their account balances, transfer funds, check interest rates, and locate ATMs and branches. By the time these teenagers move away to work or school, they’ll be much less likely to sever their electronic ties to the credit union. In fact, they’ll probably look to extend their remote membership through services such as automatic billpay. A+ Federal offers Cash-Back Checking accounts for young members. “They tend to use debit cards more than checks, and every time they use a debit card and run it as a credit transaction—by swiping and signing instead of using their PIN—we deposit five cents into their savings accounts,” says Ambuehl-Sadek. “The number of transactions is unlimited, and we’ve opened up the product for our entire membership—it’s very popular with everybody.”

The business of serving youth Credit unions like the ones featured throughout this guide understand that stability and growth depend on being attractive to all ages. While teaching their children, you can offer parents information on such basic topics as setting a child’s allowance for maximum education-

You Got That Right It costs about $200 to attract a new member5.

al value and teaching teenagers to handle a checking account or shop for a used car. Invite grandparents to start a college savings fund for each grandchild at birth. Providing the services young people need and the education to use those services is not simply an expense. It’s a sound investment for a credit union to make, a calculated long-term business development strategy. To attract a new adult member typically costs about $2005, so it’s far more cost-effective to retain your young members. If you offer the products they need and want— and could easily get somewhere else if you don’t—they’re likely to stay and bring a lifetime of business. The business development model of learning to spend, save, and manage money can help structure the educational component of your youth programs. The progression of experience in becoming a financial consumer ties logically to a progression of financial services that build on children’s and teenagers’ growing sense of responsibility and desire for autonomy. The model’s power lies in its ability to turn youth into a never-ending source of membership renewal and revenue growth while, in a very real sense, saving their lives.

Surprising spending decisions Parents are often very nervous about putting spending decisions in their children’s hands, but they often find their children are more practical than they’d have thought. Joe Cummins, community development educator at Alternatives Federal Credit Union in Ithaca, N.Y., has a great example of this. “A guy came to talk with me and mentioned that he wanted to give his teenage children stipends at the beginning of the year for clothes and other expenses, and have them decide how to spend it throughout the year,” Cummins says. “He was really nervous, scared to let go of the control, but I said it was a great idea.” The intrepid dad went forward with the plan, and later told Cummins that when he informed one daughter, she said, “You mean if I don’t use all the money, I get to keep it?”

Be Sure To Teach parents to avoid battles with their children over money. Not only is “winning” rare, but the negative emotions that surface can lead to more poor money decisions in the future.

specific policies and procedures to ensure it’s a successful, worthwhile venture. The laws in your state and your credit union bylaws influence the features of specific accounts, such as age limits, credit card limitations, maximum loan amounts, lending terms, interest rates, credit requirements, cosigners, fee structures, and minimum deposits, as well as check card and ATM card limitations. You might decide to establish dollar authorization limits lower than those of your adult members, and stricter guidelines for closing of accounts for such things as overdrafts. It’s best to have your whole program neatly planned and packaged before you offer any part of it to your membership. Finally, you must have your credit union attorney review and approve these policies and procedures. Monitor how young members are using your services, and react if you detect unintended consequences. For example, on hearing that another credit union had decided to give young members a break by publicly announcing

that they were waiving overdraft fees, Isabella Community’s Harris warns: “I wouldn’t promote this philosophy, even if you plan to do it. I find when you set realistic expectations for teenagers, they will

Be Sure To Set expectations for young members high, and make your confidence in their ability to fulfill those expectations clear.

strive to achieve, and in most cases exceed them. If you set the bar low, that’s what you’ll get. To that end, explain up front what will happen if they overdraw their account. Harris continues, “I also add, ‘paying overdraft fees is like driving down the road and throwing money out your window – it’s just silly…so don’t do it!’ ” That’s a key insight. Maybe not all unintended consequences are bad. Teaching young people how to manage money means giving them some degree of power and control over their lives and trusting them not to mess up too badly. And it’s

“Yes,” her dad replied. To his shock, his daughter said, “Great; I don’t need any new clothes.” How often does a teenage girl say that? And if her dad was paying for her clothes, would she have said it? Probably not. When it was her money, “she was immediately making sound spending decisions,” says Cummins.

How to—redesign services for young members If you’re implementing a new youth program, as with any service expansion, you must establish Te a c h i n g t o S p e n d , S a v e a n d M a n a g e M o n e y



Resource List a funny thing about trust. Often, the act of granting trust drives the recipient to prove that he’s worthy of it.

Phase 4: Learning to borrow Young members who set financial goals and save for them will more easily understand the function and benefits of credit. Basic risk management and sometimes loan cosigning make it possible to introduce the privileges and responsibilities of borrowing at an early age. If you are considering youth lending program, you will find a great deal of interest within the credit union movement, with limited, yet growing activity. Don’t let the scarcity of publicized programs dissuade you. Harris suggests that you “take a leap of faith when introducing a youth lending program. When you combine the willingness to take a leap with sound, flexible policies and educational techniques you are ensuring success.” Because this is a complex topic—and not without controversy— Chapter 3 covers it separately.

Where To Go for More Information • Googolplex (online periodical for elementary-, middle-, and high school students)—Search “googolplex” • Guides to Independence (online personal finance curriculum for high school students)—Search “guides” • International Credit Union Day—Search International Credit Union Day • Mad City Money (budgeting simulation for teenagers)—Search 27732 • National Credit Union Youth Week/ National Saving Challenge—Select Resources for Youth • National Standards in K-12 Personal Finance Education, 3rd ed., 2007, Jumpstart Coalition for Personal Financial Literacy—Select Standards


• Thrive by Five™: Teaching Your Preschooler About Spending and Saving—Select Resources for Youth • Value of a Dollar: Teaching Your Preschool Child—Search 26672 • Value of a Dollar: Teaching Your K-8 Child—Search 27271 Credit Union Web sites • A+ Federal Credit Union • Alternatives Federal Credit Union • Arlington Virginia Federal Credit Union • Bellwether Community Credit Union • Boulder Valley Credit Union

• National Youth Involvement Board

• Coastal Federal Credit Union

• NEFE High School Financial Planning Program—Select Resources for Youth

• Erie Federal Credit Union

• NCEE Online Lessons (searchable database of lesson plans), National Council on Economic Education

• Great Wisconsin Credit Union

• Jumpstart Coalition Clearinghouse, Jumpstart Coalition for Personal Financial Literacy—Select Clearinghouse


• Teach Children About Money (brochure)—Search 20875

• Golden 1 Credit Union

• Isabella Community Credit Union • OUR Credit Union • State Employees’ Credit Union

Handout Thrive by Five™: Teaching Your Preschooler About Spending and Saving


Direct members to for more “What your preschooler should know about money” activities. (page 1of 2)

Te a c h i n g t o S p e n d , S a v e a n d M a n a g e M o n e y





For a reproducible copy, go to cunapfi.orgâ&#x20AC;&#x201D;Select Resources for Youth.




Conduct a Youth (or Parent) Session Adapt this list to plan for a successful seminar, simulation, or other education event. Advance Planning and Promotion  Clearly define your target audience. Middle-schoolers? Parents of middle-schoolers? Middle-schoolers and their parents? Is the public welcome or is this just for members?  Identify potential presenters from among your coworkers, select employee group staff, Cooperative Extension, the local school system, or other reliable source in the community. Does your membership include retired teachers, an excellent resource for overburdened staff?  Identify other staff participants and their roles. Will you need a loan officer or other specialist on hand to answer questions? Will you need help to accept membership applications or open accounts on site?  Select a date in collaboration with the presenter, and reserve a seminar location—credit union, sponsor worksite, or classroom. Check the local calendar to avoid conflicts with other events.  Arrange for group child care, if necessary. Can members of your youth club provide this service?  Customize and send promotional articles to student and community newspapers and your member newsletter, including all meeting details. Will there be a charge? If there will be a charge, how much and will it be refundable? If refundable in whole or in part, under what conditions (e.g. at the end of the session, upon completion of some “assignment,” such as a savings deposit or creation of a personal budget)?  Customize and print posters and othe? promotional pieces for display in lobbies, schools, churches, etc., including all meeting details.  Prepare session handouts or presentation slides that give directions to appropriate areas on your Web site, such as for Googolplex or youth debit cards.  Provide presenter(s) with a hard copy of your presentation slides, notes pages, handouts, and presenter preparation sheet.  Update your Web site calendar with session date, time, and location.  Assign a staff member to take registrations by phone or mail. (If you’re providing child care, verify the number of children to expect, and use the sign-up sheet that includes space for number of children attending.)  Reserve and test required equipment—laptop computer, microphone, LCD/video projector, flipchart, surge protector, extension cord, and white board, if needed.  Plan and arrange for refreshments and any giveaways you may choose to provide. Does your audience have any special dietary or pizza-topping requirements? Week Before  Check with your presenter(s) about the session content and equipment.  Determine final registration count. Allow for walk-ins.  Print and make copies of handouts for participants.  Prepare an evaluation form with your logo, and make copies

for participants. (See Chapter 9.)  Assemble takeaway packets for participants, including materials on credit union services related to your session topic.  Purchase and assemble supplies:  Name tags  Sign-in sheets  Pens/pencils  Giveaways  Snacks  Toys, and other child care items, if necessary  Items for display table on other CU products and services  Prepare signs for parking, room location, sign-in, and restrooms.  Make sure room has at least one outlet so presenter(s) can plug both the projector and the laptop into a surge protector.  Hold final planning session with participating staff.  Offer certificates of completion for participants. Customize certificates with your credit union name, name of participant, name and dates of seminars, and customized message if desired.  Confirm all arrangements at site.  Confirm child care, if needed. Day of Session  Check room setup/refreshments.  Check for and test all equipment.  Set up display and registration table. If you have a youth club, provide those materials and information about your saving and investment products as well.  Put up signs. Within One Week After Session  Send a thank-you letter to presenter(s), particularly those who aren’t CU staff members.  Compile and summarize end-of-meeting evaluation forms to identify possible improvements as well as topics for future sessions. Share feedback with staff  Go to and click on the “Report what you’re doing” tab. Report parent educational sessions there. (Follow the link to to report youth sessions.)  If you get requests for handouts from a member who couldn’t attend the session, use that request as an opportunity to cross-sell—market future seminars, children’s accounts, loan specials, and so on.  Report your youth presentation/session to the Credit Union’s Network’s National Youth Involvement Board, which will share this information with lawmakers and the media to gain recognition and support for the future of the credit union youth movement. (See Resource List.) Within Three Months After Session  Send follow-up evaluation form to all participants—phone calls may yield higher response rate. Note that a follow-up communication gives you the opportunity to notify participants about coming seminars, related products and services, and also to remind participants about the importance of the topic and encourage their plans to change behavior as a result of attending the seminar.  Offer encouragement and assistance to stay on track for personal financial goals derived from the session. © 2004 Credit Union National Association, Inc. Adapted from CUNA’s Seminars in a Box series. May be reprinted for educational, non-commercial purposes. All other rights reserved.

Te a c h i n g t o S p e n d , S a v e a n d M a n a g e M o n e y





Recruitment Article

Smart Shopping

Volunteer to help students learn to manage finances

Here’s a list of techniques that “master consumers” use to get the most value for their money. Use them to organize a shopping lesson, but avoid presenting them as a lecture. Instead, look for ways to put students in a position to discover the tactics through direct experience. For example, the first tip would have much greater impact if you brought in several weeks of Sunday newspaper circulars and had students clip 10 coupons each for products their families use at home, calculating the total savings per shopping trip, per month, per year. Similarly devise your own ways of teaching these and other aspects personal finance. Putting your own spin on the lessons will make them more satisfying to teach.

The Erie Federal Credit Union has made a commitment to make a lasting impression on the financial well-being of young people in our area. In addition to being a sponsor for the NIE Friday Invest in Your Future program, 12 Erie FCU employees volunteer in 10 area schools. They work with students from K-12 to teach the Junior Achievement curriculum. Junior Achievement has a waiting list of 93 teachers at 20 schools for the JA program; more sign up every day. Erie FCU helps provide volunteers. The JA curriculum includes vital lessons on financial education that credit union employees, along with other community business volunteers, teach to area students. If you are interested in volunteering your time, JA staff will provide you with all the materials and training so you too can make a difference. Contact LaTonya M. Jaiman, JA Program Manager at 000-0000.

Plan ahead If you think before you shop, you won’t spend as much. Try: • Clipping coupons from the newspaper for discounts on things you need or want. • Find out when stores are having sales, and wait to shop until then. • Take the time to compare prices at different stores— don’t forget discount stores and the Internet! • Compare different brands and models within stores to find the best deal. • If you have trouble sticking to the spending limits you’ve set, don’t bring more money than you plan to spend (or leave your check book, debit card, or credit card at home).

You’re never too young to learn about money. Erie FCU’s Pamela Wonner teaches kindergarten students the Junior Achievement lesson “Ourselves.” Source: Erie Federal Credit Union.

Choose carefully While you’re out shopping: • Don’t buy something just because you have a coupon or because it’s on sale—if it’s not something you really need or want, you won’t use it. You’ll have wasted your money. • If you see something you really like while shopping, ask the store to hold it for you for a day. If you still really want it after that, buy it. If you don’t, you’ve avoided an impulse buy! • Check the quality of things before you buy. If something’s less expensive, it may not last as long. Is it a better deal to buy something you’ll have to replace right away, or to spend a little more and have it last longer? Before you buy, ask yourself: • Do I really need or want this? • Will I be sorry I bought it? • Can I afford it? If you answer “yes” to any of these questions for any item, remove it from our cart before checking out. You’ll be glad you did.




Budget Simulation Use this checklist—adapted from CUNA’s Mad City Money— to help you organize a budgeting simulation for high school students. Advance Planning and Promotion (4-5 Weeks Before)  Customize documents (e.g., certificate of course completion, merchant training invitation, poster, and newsletter copy) by inserting CU name and logo on the first and/or last page of each document.  Order checkbooks (checks and register) and debit cards from your supplier. These do not need to be customized with the participants’ names. Approximately 20 checks per participant should be sufficient.  Identify a potential facilitator from the credit union, SEG, Cooperative Extension, local school, or other reliable source in the community. Review all the information necessary to conduct a successful simulation.  Determine what groups you will work with to deliver this program; i.e., scouts, 4-H, faith-based, etc.  Identify volunteers from the credit union or the community to serve as merchants during the simulation, with the help of the facilitator.  Select a date, in collaboration with the facilitator, to hold a short (45 minutes or less) training session with the merchants.  Select a date, in collaboration with the facilitator, to hold the simulation, and reserve a location—credit union, SEG, schoolroom, community center, or other local community site. Check local calendar to avoid conflicts with other events.  Reserve required equipment, such as a boom box, if needed.  Customize/send promotional articles to local newspapers; including CU name and meeting logistics.  Publish promotional article in CU newsletter; insert CU name and meeting logistics. Also, consider printing mass quantities as flyers and place them in acrylic holders so members can take them home. Print as four-color (more expensive), or print grayscale or black-and-white to reduce costs.  Customize/print poster for display in lobbies; insert CU name and meeting logistics.  Create new promotional pieces, if you wish, using graphics from existing files.  Provide facilitator with copies of instructions, merchant materials, and participant materials.  Update CU Web site calendar with simulation date, time, and location.  Assign staff member to take registrations by phone or mail— sign-up sheet is provided.  Plan and arrange for refreshments and any giveaways you may choose to provide. 2 Weeks Before  Send prework to participants.

1 Week Before  Check with facilitator and merchants regarding comfort level with material and equipment.  Determine final registration count. Allow for walk-ins, although walk-ins aren’t recommended.  Make copies of handouts for simulation participants; coordinate with facilitator to make sure handouts are copied by credit union or facilitator, but not both.  Customize evaluation forms with CU logo, and make copies for participants.  Purchase/assemble participant materials: Worksheets used during simulation:  Occupation sheets  Budget worksheet  Savings & spending plan Handouts distributed at end of class:  Evaluation form (See Chapter 9.)  Personal budget work sheet (to take home—see Sample)  Certificate of Completion  Additional budgeting information Supplies:  Checkbooks/debit cards  Name tags  Sign-in sheets  Pens/pencils  Giveaways  Calculators  Items for display table on other CU products and services  Print wall signs and “make check payable” signs for merchants.  Prepare signs for parking, room location, sign-in, and restrooms.  Confirm that room has a spare outlet for the boom box, if necessary.  Hold final planning session with participating staff.  Print Certificate of Completion for students who complete the simulation. Customize certificates with your CU name, name of student, date of simulation, and message, if desired.  Confirm all arrangements at site.  Arrange for refreshments. Day of Session  Check room setup/refreshments.  Test all equipment.  Set up merchant, facilitator, and registration tables.  Put up merchant signs and merchandise pictures. Within 1 Week After Session  Send a thank-you letter to facilitator and merchants, particularly those who aren’t CU staff members.  Compile and summarize end-of-meeting evaluation forms to identify possible improvements as well as topics for future educational sessions. Share feedback with CU staff. © 2007 Credit Union National Association, Inc. May be reprinted for educational, non-commercial purposes. All other rights reserved.

Te a c h i n g t o S p e n d , S a v e a n d M a n a g e M o n e y



Sample Teenage Budget Worksheets


What I Earn! to be used with Where Does My Money Go?

Name ______________________________________ Date prepared______________________





Job 1


Job 2















What I Earn! January

Use the worksheets on the following pages to: 1. Figure out your total income—don’t include money you’re not sure you’ll get, such as gifts. 2. List all your expenses. Include basics like clothes, car insurance, gas, and entertainment, and don’t forget about special occasions. . 3. Figure out how much you spend each month on these items. The most accurate way is to save receipts and track your expenses for a month—you may be surprised at how much you’re actually spending! If you don’t want to wait, you can start out by estimating, and then adjust your budget as time passes. 4. Include money you’ll set aside for savings. You should save a certain portion of your income regularly, and you may also want to save for something special. 5. Add your expense amounts. Do they total more than your income? If so, you’re spending more than you make. Figure out where you can cut some “wants” to make sure you can afford your “needs”. 6. Now you know how much you should spend, on what. From now on, stick to those amounts. You won’t run out of money—and you’ll even be saving and earning interest! 7. It’s a good idea, at least at first, to save receipts and verify that you’re really following your budget. Enjoy your financial fitness!

Interest/dividend earnings $

Sell used items






I’m saving for __________________________________________________________ It costs____________. I can buy it in _____months if I save_______a month. I’m saving for __________________________________________________________ It costs____________. I can buy it in _____months if I save_______a month. I’m saving for __________________________________________________________ It costs____________. I can buy it in _____months if I save_______a month. TOTAL: $___________ © 2007 Credit Union National Association Inc.

Page 1 of 2

(page 1 of 2)



Where Does My Money Go?

to be used with What I Earn!

After completing both the income and expenses sections, determine how much money you have left each month and how much more you can add to your savings. Are you spending more than your income? What can you do to reduce expenses in each category?

Savings* Snacks

$ $



Personal stuff


School supplies/fees Car payment

$ $













Where Does My Money Go?

Car insurance payment $ Gas Car repair

$ $

Sports fees & equipment $ Hobbies


Charity & donations Music

$ $

Pet expenses


Entertainment** Presents

$ $



College/school tuition


Retirement Other

$ $





*List the amount you are saving monthly for the goals you listed on page 1. **Include dates, school events, prom, movies, concerts, etc. Š 2007 Credit Union National Association Inc.

Te a c h i n g t o S p e n d , S a v e a n d M a n a g e M o n e y

Page 2 of 2



Chapter 3

Action Checklist

3 Manage the Risk of Lending to Minors  

Work with your board, CFO, and attorney to determine your criteria for lending to young borrowers.



Acquire or develop educational materials to teach youth how to handle credit responsibly. Can you recruit coworkers from your lending department to teach from their experience with adult borrowers?

Consider a “borrowers’ club” to act as a peer support group for young members who have loans or would like to apply. How do you define a “creditworthy” teenager? What lessons do “borrowers-intraining” require?

Develop ways to monitor youth loan accounts and adjust policies as needed. What role will you require of parents in an “early-warning system” of potential repayment problems? How can you turn a possible late payment into a learning opportunity? How can you work with young borrowers and their parents to avoid taking away their credit cards and/ or charging off their debt?

Share your success with members and local media. What opportunities do you have for word-of-mouth advertising of youth loans? How will you showcase your youth lending success stories?

Income requirement Savings requirement Readiness indicator(s), such as school grades, work history, references

Decide how your youth loan policies will differ from those for adult borrowers.  Credit instruction requirement  Credit card types and terms  Consumer loan ty pes and terms  Business loan types and terms  Collateral requirement(s)  Cosigner requirement  Credit reporting agency requirements  Fees and penalties  Parental monitoring agreement  Late payment intervention  Default consequences Consider offering business as well as personal youth loans. How will you modify your business lending policies to finance the smallest of businesses and business owners?


Model Youth Program Guide Best Practices & Proven Techniques

Chapter 3:

Teaching to Borrow Summary Some credit unions that lend to minors require parents as cosigners; others require parental consent but no cosigners. Whatever the default risk of a particular option, parental involvement is the key factor in youth loan program success.

Highlights u It makes sense to help teenagers learn to use credit responsibly while they’re still at home under their parents’ supervision. They’ll be better prepared to resist the credit card offers that will bombard them after they turn 18 and the spending choices of living on their own.

u Credit unions structure youth loan programs with combinations of terms—interest rates, credit limits, repayment terms, criteria for approval, education requirements—that fit their risk-tolerance levels and business objectives.

u Credit unions successfully offer youth credit cards without cosigners by screening applicants carefully and teaching them about borrowers’ responsibilities to the credit union and to their fellow members.

u Besides managing the risk of lending to minors with education, credit limits, and parental monitoring, you also can influence repayment positively by clearly communicating that, as members, they have your trust.

u Making small business loans to qualified youth entrepreneurs is another way to help them learn about credit—while they learn to run a business.


ucker is a freshman in college. When his phone rings, he doesn’t answer it.

Why? He’s tired of collection agencies calling about his past-due credit card bills. When Tucker was growing up, his financial institution didn’t offer loans or credit cards for people under age 18, so he never learned how to handle credit responsibly. When he turned 18, he got at least one credit card solicitation in the mail every week, with offers that sounded unbelievably good. That’s right. Unbelievably good. “Zero percent finance charge for six months.” “Low 8.9% interest rate unless you’re ever late on a payment.” Of course, Tucker didn’t read the fine print. He applied for several cards and the shopping began: pizza, pricey athletic shoes, concert tickets…. The balances mounted, and Tucker couldn’t even make his minimum payments. Interest on one card immediately went up to a shocking 29%! Tucker’s in trouble. But he doesn’t even know enough about money matters to contact his lenders and work it out. He doesn’t know what he’s done to his credit score. He just listens to the phone ring. What if Tucker had belonged to a credit union that issued credit to teenagers, with or without cosigners, accompanied by education on handling it responsibly? What if he’d made this mistake with a single

You Got That Right Four of 10 credit unions had youth lending programs in 2005—offering credit cards and auto loans1.

one credit card with a $200 limit while he still lived at home? His parents and his credit union would likely have helped him fix the problem, and he’d have learned a valuable lesson. Tucker would have avoided the cards with unfavorable terms that he ended up embracing in college. He’d still have a good credit score. Of course, not every borrower learns his lesson the first time, but what if you could help? This chapter looks at the importance of offering loans with financial education so that young people know how to borrow—before they turn 18 and are inundated with “easy credit” offers. More credit unions have youth lending pograms today—four of 10 responding to a recent survey offer credit cards and auto loans1. And those that do make youth loans report success. For example, Carol Bayreuther, president and CEO of Hartford (Conn.) Healthcare Federal Credit Union, enthusiastically endorses the “Say Yes to Youth” program, designed by the Credit Union League of Connecticut, as very successful for her credit union. “A big part of the future for credit unions is to establish a relationship with youth today, because within the next 10 to 20 years, they’ll constitute our major membership base,” Bayreuther says. Hartford Healthcare Federal offers a savers’ club for younger members and a teenage program, which includes loans. Steve Carr, public relations and education specialist at Boulder Valley Credit Union, Boulder, Colo., is a firm believer in youth loans. He notes, “If you’re not offering young members checking, debit cards



Examples of Key Borrowing Skills From the National Standards in K–12 Personal Finance Education: • 4th Grade— Explain the difference between buying with cash and buying with credit. • 8th Grade— Explain how interest rate and loan length affect the cost of credit. • 12th Grade— Define all required credit card disclosure terms and complete a typical credit card application. (See Resource List.)

and loans, there’s nothing sticky about your credit union when they become teenagers. What makes you think they’ll stick around when those are the kinds of services they want?” Learning to borrow is the fourth phase in young people’s financial development—after they learn to spend, save and manage money. (See Chapter 2.) And credit unions need to help them navigate the borrower’s phase successfully.

Be Sure To Allow members to “cut their teeth” on small loans to prepare them for the responsibility of borrowing from you later for larger car loans, student loans, and, eventually, mortgages.

How to—structure a youth loan program Young members might need loans for a variety of reasons. For example, a young person with a paper route, lawn mowing business, job at a fast food restaurant, or even a regular baby sitting job may need to borrow money to purchase a new bicycle, a new lawn mower, or an educational trip. A young person with a 4-H project might need a loan for livestock, materials, or equipment. Perhaps a youth has a candy-making business at home and needs a loan to purchase candy molds and supplies. A loan from your credit union becomes a learning experience for 34


young members, while at the same time earning interest for the credit union, building member loyalty for future services, and strengthening the community. But you have to decide what will work for your credit union. Will you charge the same interest rate on a loan to a young member as you charge your adult members? Will your repayment terms be the same? Will you assess any fees or reduce fees on these youth accounts? Will you require a cosigner for some or all youth loans? (See Sample “Youth Loan Policy.”) If you use risk-based lending, how will you evaluate a minor’s application? How will you establish a rate? “Some credit unions use a model that gives a minor the ‘C’ paper rate for a loan since there may not be a credit score available to use in a risk-based pricing structure,” says Pam Swope, marketing manager for FinancialEdge Community Credit Union in Bay City, Mich. (See Sample “Youth Credit Application.”) There’s considerable variety in the way credit unions structure youth loans. State Employees Credit Union (SECU), Raleigh, N.C., is willing to lend money to responsible members as young as age 13, with a parent as cosigner on the loan. It believes that educated teenagers who “cut their teeth” on a $1,000 loan to buy a computer will be good credit risks for car loans

and student loans later. Members First Credit Union, Plymouth Minn., offers members aged 15 to 17 no-cosigner credit cards with $100 maximum limits. Borrowers must have a source of income, their parents have to sign a consent form, and they must attend financial education sessions quarterly at the credit union. Suncoast Schools Federal Credit Union, Tampa, Fla., also issues youth credit cards without cosigners to youth aged 16 or older, with $100 minimum and $300 maximum limits. “Students and their parents attend a counseling session first, and parents have to sign a consent form, but they’re not cosigners,” notes Juli Lewis, youth marketing manager. “We decided not to require cosigners so the students would really take ownership,” she adds. “Students don’t have much that they’re in control of, and we felt it would give them responsibility and pride.” To screen borrowers, Suncoast Schools Federal has certain requirements. “They have to bring in a copy of their report card—it’s not based on grades, we just want them to show the responsibility,” Lewis says. They also must complete tests on money and budgeting, credit reports, and credit cards; and obtain a letter of recommendation from someone not related to them. Suncoast Schools Federal has offered the youth credit cards since

Fig. 3- 1

Sample Youth Loan Limits Years old

Maximum loan

Interest rate

Repayment term


10 to 11


2pts. less than regular rate

1 year


12 to 13


2pts. less

1 year


14 to 15


2pts. less

1 year


16 to 17


1pt. less

18 months




1pt. less

2 years


(More for a new or used vehicle)

You Got That Right One of three high school seniors has access to a credit card, their own or their parents’ card2. 2002 and has 34 outstanding, with balances totaling $11,557. “We wanted to help kids learn to use credit the smart way,” Lewis continues. “When they turn 18, they’re bombarded with card offers. If they don’t know how to use cards, they can get carried away. They’re over their heads in debt right out of high school.” None of the youth card accounts has ever been delinquent. “They pay better than adults do,” says Lewis. Suncoast Schools offers closedend loans as well, to teenagers as young as age 13, with a maximum limit of $500. As with youth credit cards, parents sign consent forms. “Teenagers use the loans for car repairs most often, so they don’t lose their jobs when their cars break down, and their families can’t help,” says Lewis. Figure 3-1 shows some sample youth loan limits.

What works—credit cards without cosigners Kelly Schermerhorn, now CEO at CES Credit Union in Mt. Vernon, Ohio, has been a proponent of no-cosigner youth credit cards for years. When he was CEO of Harvest Federal Credit, in Heath, Ohio, he persuaded an initially reluctant board to approve such a program in 2001. He proposed starting the TeenPac program for youth, requiring participants to be 15 to 17 years old, have a job outside of the home, and be a member of the credit union. What they wouldn’t need was a parent’s signature… for anything.

Be Sure To Assess the return on your youth program costs as you would any business development expense. Te a c h i n g t o B o r r o w

Learning requires motivation. What would motivate TeenPac members, Schermerhorn said, is that, because there’d be no adult safety net, they’d understand that it was truly their checking account, their debit card, their Visa credit card—and their responsibility. “When I first proposed to the board of directors that we begin lending to teenagers, who can’t enter a legally binding contract, there was some skepticism,” he says. “However, after looking at the numbers, the directors approved the program unanimously. Schermerhorn explained that the credit union expected no more than 100 kids to be involved at any one time because of the job requirement and the lack of access to the general school population. Every club member began with a credit limit of $100. He says, “So, even if all 100 teenagers maxed out, our risk would be a mere $10,000.” TeenPac’s performance was very good. “Did our teenagers discover that, as minors, they legally didn’t have to pay their bills? Oh, yes,” says Schermerhorn. “We charged off a

You Got That Right 88% of teenagers aged 13 to 18 say that they don’t like the way it feels to owe someone money. However, 29% are in debt, owing an average of $2933. total of $250, including fees, not quite a 2% loss. I’ll bet most credit unions wouldn’t bat an eye about spending $250 on incentives to get teenagers to participate in a youth program. But a charge-off? No way! “But how many of us spend $250 on a marketing program without thinking about it? If you put that loss in context against what you might spend on a mascot costume, it becomes insignificant,” Schermerhorn says. “Compare it to a marketing or business development expense and get real. You deal with costs and risks for adult members every day. Shake your assumptions

about minors and apply the same risk management principles to youth lending.” The two TeenPac members who took the easy way out and defaulted learned a bad habit they wouldn’t be able to break until their credit scores suffered and their cost of credit went sky-high. “But who can’t afford to lose $250 on a program that doesn’t cost anything and that does so much good?” Schermerhorn asks. TeenPac prepared the other 38 teenagers who were club members at the time to make better decisions. They learned how to buy a car and how the cost of insurance affects its overall cost. They started an investment club to make their retirements much easier to fund. They learned how credit cards work, and how not to fall into the trap of revolving credit. “These TeenPac members had already acquired and put into practice more financial knowledge than most adults,” Schermerhorn says. “That’s a huge return on a $250 investment.” In 2008 TeenPac is still going strong, according to Harvest Federal’s current CEO, Julie King, and helping create long-term, revenuegenerating members. “We haven’t had any losses recently, and when cardholders turn 18, we convert them to our regular credit card. If they have steady incomes, we increase their credit limits.”

How to—manage risk Credit unions making youth loans have accepted the repayment risk and learned to manage it. In fact, Juri Valdov, retired CEO of Northwest Federal Credit Union, Herndon, Va., believes it’s riskier not to offer youth loans. “We don’t give teenagers enough credit—in both senses of the word,” he says. “I don’t see any advantage in waiting until they leave home and their parents’ direct supervision to lend them money.”



Jim Hanson, vice president of CUNA’s Center for Personal Finance, concurs. “Credit card debt is like unlimited dessert to some young adults. They can’t get enough of it, partly, I’m convinced, because they come to it after age 18, when their wants and their independence create a powerful and tempting combination. Instead, if you let them experience credit card debt in smaller, controlled servings while they’re still teenagers, you’d have a better chance of guiding their ‘debt diet.’ ” Northwest Federal offers a credit card to members aged 15 to 22, with a low fixed rate and no annual fee, no-fee cash advances, no-fee balance transfers, and a 25-day interest free grace period for purchases. Can teenagers be trusted with credit cards? Yes, says Hanson, “The credit unions that are lending to minors tell us that most teenagers are trustworthy if they’re taught to be. Teach them the rules of credit and consequences of not following them, tell them that you expect them to follow the rules, and enlist their parents in making sure that they do. Most teenage borrowers will

rise to the challenge—they’ll want to live up to your high expectations. But the keys to managing your risk as a lender are education and parental monitoring.” Credit cards present a special challenge because of the ease of use, the high interest rate, and the undemanding minimum repayment requirements. Symbol of freedom, epitome of convenience, mark of sophistica-

Be Sure To Check with the credit reporting agencies that your credit union works with to find out how they treat minor borrowers, with or without a cosigner. tion—the credit card has become a highly desirable acquisition for teenagers. Among high school seniors, 14.9% have a credit card in his or her own name, 14.2% have access to a parent’s credit card, and 5.6% use both4. A majority of college students have credit cards, which are almost universal among older adults. Clearly, teenagers who can’t already get their hands on a credit card will acquire one soon. So—considering the potential for

abuse—it makes sense to help young people prepare for responsible credit card use before they leave home. A variety of traditional credit card options allow you to choose the degree of risk you are willing to accept. In order of risk, they are: Lowest risk: Parent owner, youth as approved user. Medium risk: Youth as owner, parent as cosigner. Highest risk: Youth owner, no cosigner. Most lenders will feel most comfortable with the first two options. But before you rule out not requiring a cosigner, consider how even this level of risk can be managed. As a rule, young members assume the new responsibility and pay off their loans in a timely manner. With an adult cosigner, credit unions have a better chance of collecting the balance owed, but no guarantee. You’ll certainly want to cover the topic of redit reports in your educational sessions for new borrowers. Students who understand the importance of having a positive history of repayment will be more creditworthy adults. Your lending program will give them the chance to develop good borrowing habits that will serve them in good stead after age 18.

Creating a credit history Of course, the whole point of lending to minors is to instill in them a sense of the responsibility that creditors have to lenders. “Basically, the credit reporting system is voluntary, so credit unions can choose to do business with any of the credit reporting agencies (CRAs) or none at all. Most, if not all, report to at least one major CRA,” says Valerie Moss, CUNA’s director of compliance information. “The Fair Credit Reporting Act says 36


nothing about age: There’s nothing in the statute that requires or prohibits the reporting of information on minors or adults. It just requires that all reporting be accurate,” Moss points out. Maxine Sweet, vice president of public information for Experian, explains how her credit reporting agency handles information about minors. “If an individual’s name is on an account, creditors are expected to report it regardless of the age. However, by policy, Experian does not report ANY account information for minors. The information that is collected is stored and updated, but suppressed. When people turn 18, the entire report is made available. Until then, we send a response saying that it’s the credit report of a minor and therefore no information will be provided.” “So,” concludes Sweet, “if a credit union is helping young people build a positive credit history, it will help them when they turn 18 and want to buy a car or get a student loan. The flip side is that if they don’t make payments as agreed, that history will hurt them when they turn 18.” Sweet adds, “The confusion may be coming from authorized user credit card accounts. Experian does not release negative payment history on the report of an account’s authorized user, who can be of any Te a c h i n g t o B o r r o w

age. This is by policy because an authorized user has no obligation to pay, so we remove their names upon request, no matter what balance is owed.” Other CRAs might have different reporting policies than Experian’s. So to be on the safe side, check with the credit reporting agencies that your credit union works with to find out how they treat minor borrowers, with or without a cosigner. Proper screening and education of both children and parents will help curtail any loan losses from a youth lending program. To qualify youth borrowers, some credit unions require proof of income, or grades of B or better, for example. Some require minor borrowers to take a financial education course at the credit union and pass a test. FinancialEdge Community offers credit cards and loans without cosigners to teenagers who have documented income (a pay stub) and meet loan-to-income guidelines. The credit union does require parental consent. “We haven’t had very many yet so we don’t know if we’ll have any delinquency, but we’re pleased with the way they’re handling the loans,” says Swope. “These are the kids that become lifetime members. We believe that the 16-year-old who needs a bike loan for a paper route will go on to get a first mortgage from us.”

Keeping faith with parents Michigan Catholic Credit Union, Troy, Mich., offers loans to teenagers without cosigners for those as young as 16. “We do require parents to sign an acknowledgement form,” says Rebecca Caron, business development supervisor. “We’re keeping good faith with parents, keeping them in the know.” (See Chapter 5.) Regardless of age, minor borrowers at her credit union must take financial education courses. “We created our Money Smart

courses in-house,” Caron says. “We had been using CUNA’s Guides to Independence, and we loved them, but we felt it was very important to be specific about our own products and services.” Member services representatives go over the educational information with new borrowers, and the courses can take 20 minutes to an hour, depending on the number of questions learners have. “We encourage them to come in any time they have questions,” says Caron. “A lot of people are shocked that we’d offer a 13-year-old a credit card, but with the education, they can handle it.” At Regional Federal Credit Union, Hammond, Ind., the goal is to turn loans into learning. The credit union offers the “Power Pay” loan at its five in-school branches. Students attending any of the schools with a branch, and who are between the ages of 15 and 17, can borrow up to $300 for a year for just about any purpose. The difference between borrowing at school and taking a loan from the credit union’s traditional office is the inclusion of the students’ parents in the loan transaction. “The objective of this loan is to open up communication in families about financial issues,” explains Jill Banning, president and CEO. “Although the parents aren’t cosigners on the loans, they’re part of the application.” The credit union sits down with each student borrower and his or her parents to discuss credit basics, the importance of paying on time and the concept of interest—before handing over a single dollar to the student. Banning says many of the parents benefit from the discussions as much as their kids do, learning about credit scoring right along with their students. In addition to the age require-

Be Sure To Manage your risk as a lender with education and parental monitoring.



ments, students must be qualified to borrow. They need to have good attendance and behavior records, grades at a C or better, and they must have some sort of job. Student borrowers are employed at everything from retail to babysitting to lawn work, and they use the money for what could be classified as typical teen spending—formal wear, dinner and tickets to the prom, yearbooks, gifts for others, and even car repairs. Parents have been supportive. “I believe we only had one parent come in with a student, sit through our education meeting and decide she didn’t want her child to participate,” says Banning. “Of course, that parent knows her child best, so she probably saved us a loss! Most parents enjoy the education sessions and thank us for including them.” Regional has issued 22 loans totaling $6,050 since the program launched in 2006. Early on, there were five chargeoffs totaling $916. “Oddly, those who walked away from their loans did it quite early in their agreements—of the five, four made fewer than five of their 12 payments,” says Banning. The credit union improved its

You Got That Right Since 1996, almost 1,200 youth members have graduated from Burbank City Employees Federal’s Independent Advantage program and earned no-cosigner credit cards.



account monitoring processes and communications, and in 2007 didn’t have any losses. Banning feels comfortable that they’ll be able to avoid high losses in the future. Now Regional is preparing to launch a “family credit card,” which will allow children to be designated as authorized users under the parent’s name. “We hope it’ll offer even more lending experiences for students, while allowing the parents to carefully monitor and limit the students’ use of the Visa card,” says Banning. Of course, some risk is simply a part of doing business. When your credit union began offering debit cards, or even credit cards, you implemented controls to minimize risk, and factored in the costs of fraud and chargeoffs. Consider this same risk planning when you design your youth program. If a minor refuses to repay a loan, you cannot legally collect the debt, and you cannot ensure that the cosigner will pay without legal pressure. However, credit unions with youth loan programs report that, in practice, risk from youth lending is minimal.

What works—financial education to mitigate risk Burbank City Employees Federal Credit Union’s has long paired youth financial services with education. In 1996 its board directed management to develop a program for teenagers to increase youth membership, and “the management team felt the best thing we could do for teenagers was to educate them,” says Suzanne McClure, vice president of marketing, who led the program’s development. “But not just educate them,” she continues. “Provide them with the information they need to become financially independent and then give them the tools to put that knowledge to the test.” Thus, the Independent Advantage program

(IA) was born. Originally, Burbank City Employees Federal offered students between the ages of 15 and 18 seven classes, but cut back to four. This made it possible to offer the program nine times a year to as many as 300 students annually. These four courses give students the basic knowledge they need to begin handling their own finances. Once they complete the undergraduate program, they’re eligible to take graduate courses. Checking 101. Students learn the basics about checking accounts, such as the parts of a check, how to complete a check, how to use a check register, how to balance a checking account, and the consequences of bouncing a check. At the end of this class, they apply for a checking account with checks, a Visa debit card, the credit union’s online service, and the automated phone service. Electronic Services 101. Here, students get hands-on experience using the ATM, online access service, and automated phone service. In groups, they rotate among various electronic workstations. Credit union employees demonstrate and teach the students how to use each of the services. Tom Moioffer, Burbank City Employees Federal’s president and CEO, enjoys showing students how to use the ATM. “I have each student practice making a withdrawal, deposit, and transfer at the ATM,” Moioffer says. “Since many of the kids have a limited income, they often don’t have enough money in their accounts to withdraw $20. So as a gift, the credit union deposits $20 into each student’s account prior to class, so they’ll have money to practice with during the evening.” Credit 101. Topics include the definition of credit, the different types of credit, credit terms, credit reports, the importance of credit, how to use credit wisely, and what happens if you don’t use it wisely.

Students participate in a game of Jeopardy to help reinforce what they’ve learned in class. They then complete an application for a Visa credit card. Students’ credit limits are based on age: Fifteen-year olds have a $200 limit, and it increases by $100 each year to age 18. Budgeting 101. Through lecture, group activity, and a video, students learn the importance of saving, tracking expenses, setting financial goals, and creating a budget. At the end of the class, students receive a Visa credit card and a certificate of completion. Burbank City Employees Federal offers graduate courses in investments, insurance, and auto-buying on a single evening one or two times a year. Has IA been a success? “Yes indeed,” says Moioffer. “Not only are we meeting the credit union’s goal of building our youth membership base, but we’re also helping our community by giving our youth the financial education they need to make wise financial decisions.” Almost 1,200 students have graduated from the program. “I’m always surprised at how savvy they are,” says Kate Vergara, business development and education coordinator. “They save a lot, and as a group, their Visa balances are at less than half their limits.”

You Got That Right The USDA’s Farm Services Agency, which lends up to $5,000 to young people between the ages of 10 and 20 who live in towns of fewer than 50,000 people, had nearly 10,000 youth loans on its books as of January 2008. loans to youth for business purposes may need 100 percent collateral and/or a cosigner. U.S. credit unions would do well to look outside the movement for models of youth business lending. In Goose Bay, Labrador, Canada, a 20-year-old runs a thriving home care business. Summer Watch provides services for vacationing homeowners, such as security, lawn care, and pet care. Growth in customer base, equipment inventory, and student employees reveal the business’s steady progress. To accommodate the growth, the owner successfully applied for a $3,000 loan from the Youth Ventures Program of the Newfoundland and Labrador Association of Community Business Development Corporations. The loan funded equipment purchases and a truck rental. Youth Ventures no longer makes business loans, but young businesspeople can apply for loans directly

from area Community Business Development Corporations. Gwen Mahaney, former coordinator of Youth Ventures in Canada, says that when the program offered loans, it also required business plans of students applying for a loan. Other requirements included parental consent, a cosigner for those younger than 18, and the agreement to use the funds for operating a fulltime summer business. Youth Ventures assisted three business startups in its inaugural year, 1992, and four years later had some 400 young people participating at 23 sites across Labrador. A volunteer board of directors reviewed applications using standard underwriting criteria. Students between the ages of 12 and 29 years gained hands-on experience operating businesses ranging from designing Web pages to delivering singing telegrams. Youth Ventures’ funding comes from the Atlantic Canada Opportunities Agency (ACOA), a federal agency. “This makes it possible to hire and train the local coordinators and promote the program across the province,” Mahaney says. Until 2005, money for the loans came from the Business Development Bank of Canada, which then

What works—loans for young entrepreneurs Credit union loans can also help students get a start in the business world. Member business lending helps young people learn to manage credit effectively and learn about running businesses—and generates revenue. According to the National Credit Union Administration (NCUA), it’s unlikely most youth loans would be categorized as business loans under NCUA and state regulations because the minimum business loan principal is set at $50,000. And any Te a c h i n g t o B o r r o w



cancelled that funding source, according to Mahaney. Individual Community Business Development Corporations stepped in to fund the loans through the Youth Ventures Program, then began funding the loans directly. In the U.S., there’s also limited government funding for youth loans. The USDA’s Farm Services Agency (FSA) lends up to $5,000 to young people between the ages of 10 and 20 who live in towns of less than 50,000. FSA loans must be used “to establish and operate income-producing, agriculture-related projects of modest size in connection with their participation in 4-H clubs, Future Farmers of America, and similar organizations,” says James F. Radintz, director of the FSA’s loan making division. “As of January 2008 we had nearly 10,000 youth borrowers.” Projects such as livestock and crop production or lawn and garden services are eligible for the loans as long as they’re organized as part of a supervised work program, planned and operated with the help of the organization adviser. The project must produce sufficient income to repay the loan, and provide practical business and educational experience. Applicants also must be unable to get a loan from other sources. These young entrepreneurs succeeded by following a classic formula: See a need, prepare a business plan to analyze how to profitably meet it, secure necessary funding, and then launch the enterprise. But they didn’t do it alone. They worked with small-business lenders. What would it take for your credit union to provide loans for young entrepreneurs? Schermerhorn believes if a loan met the policy standards currently in place, there would be no reason to turn it down. “I’d find a way to make the loan,” he says. Schermerhorn believes it doesn’t make sense to write a policy to fit particular cases. 40


Flexibility is also the watchword at CP Federal Credit Union in Jackson, Mich. “Practicing the credit union philosophy allows us to look at the whole picture and each member individually,” says Susan Young,

financial education supervisor. “This gives us the opportunity to assist each member with their personal finances, including loans. We don’t rule out a loan just because a member is 18 years or under.”

Resource List

Where To Go for More Information • Guides to Independence (online personal finance curriculum)—Search “guides” • Jumpstart Coalition Clearinghouse, Jumpstart Coalition for Personal Financial Literacy—Select Clearinghouse • National Standards in K-12 Personal Finance Education, 3rd ed., 2007, Jumpstart Coalition for Personal Financial Literacy—Select Standards • Youth Loan Manual—Search “youth loan manual”

Credit Union Web sites • Burbank City Employees Federal Credit Union • CP Federal Credit Union • FinancialEdge Community Credit Union • Hartford Healthcare Federal Credit Union • Harvest Federal Credit • West Financial Credit Union • Michigan Catholic Credit Union • Regional Federal Credit Union


Youth Loan Policy Legal Majority Loans to minors (under 18 years of age) will be granted with an approved cosigner or guarantor. Cosigner/Guarantor If the loan officer determines that a cosigner is prudent, he or she must review the creditworthiness of the cosigner. Cosigners must qualify for the loan they wish to sign on, just as if it were their own. Cosigners must satisfy the Credit Union’s credit criteria including debt ratio guidelines and must agree to assume responsibility for the entire loan balance. The Credit Union will provide all cosigners with proper notice explaining rights and responsibilities, as required by the Fair Credit Reporting Act. Source: Boulder Valley Credit Union.


Youth Credit Application Application and Agreement for a Teenage Loan Member number:___________________________________ Social Security number: ____________________________________ Name: ____________________________________________________ Date of birth: ____________________________________ Address: _____________________________________________________________ Live with parents  Live with grandparents  Live with guardian  Other  Driver’s license number: _________________________________________________ Employment and Income Place of employment: ______________________________________________________________________________ Date started: ____________________(If start date is within the last six months, did you work somewhere else previously?) If so, where?_________________________________________________________________ How lLong:____________ What is your job position or title? _____________________________________________________________________ Number of hours worked per week:________________ Salary: __________________(per hour) Your average “take home” pay is $________________ per week, every two weeks, or monthly (circle one) Your allowance is $__________________ per week, from whom:_____________________________________________ Total monthly income: $____________________________ (from all sources) Purpose and Details of Loan Request The amount you wish to borrow is $______________ The purpose of the loan is:_________________________________ Remainder to be completed by Suncoast Schools FCU loan officer and at closing:  Loan Request (310)  Credit Card Request (410) Teen Tracks completed:  Money Basics and Budgeting  Credit Reports  Credit Cards  Income verified  Copy of report card with overall GPA attached  Letter of recommendation attached

$____________ Approved loan amount ____________ Approximate term $____________ Approved credit card limit

Loan or Credit Card Agreement and Terms ____________ % Interest rate ____________ Monthly payment ____________ First due date Repayment terms are 2% of the balance due on the statement date.

 Automatically transfer the monthly payment from account: ____________


You promise that everything you have stated in this application is correct to the best of your knowledge for the purpose of obtaining credit from Suncoast Schools Federal Credit Union. You have completed the required Teen Tracks for a loan or credit card request. You agree to repay the loan or credit card according to the terms above or until the amount borrowed plus interest is totally repaid. You understand a late charge may be assessed if the monthly payment is not received within 15 days of the payment due date, and we may discuss the loan account with your parent(s) or legal guardian signed below. Your membership privileges may also be restricted in the event your payment is delayed or missed. ______________________________________ Applicant/Borrower Signature ______________________________________ Parent or Legal Guardian Authorization Signature (Parent or legal guardian must be present and signature is obtained at loan closing.) ______________________________________ Approving Loan Officer Signature

______________________ Date ______________________ Date ______________________ Date

Source: Suncoast Schools Federal Credit Union.

Te a c h i n g t o B o r r o w



Chapter 4

Action Checklist

3 Build a Solid School Relationship  

Research the needs of individual school demographics. What kinds of students does the school serve? What are students’ families like? What is the current state of relations among faculty, administration, school board, and the community?

Determine how your products and services can benefit administrators, teachers, and families. Can you modify your existing products to better appeal to them?

Build relationships with educators by volunteering for school events. Are you able to chaperone dances or assist with the school science fair or open house?

Find an ally among the teaching staff who can help you marshall your program through the school system to get administrative approval. Do you have members who are teachers or who work for the school district who can provide an “in”?

Meet with administrators and/or teachers to show them how you can help them. Can you get on the agenda for the new teachers’ orientation program? Are you able to set up a table where you can educate teachers about your credit union?

Volunteer to come into classrooms and teach. What specific topics are you able to address? How do those topics fit with specific school subjects? Can you point out any connection between your lesson content and state curriculum standards? What expectations do teachers have for your presentations? What kinds of students will you be facing? How will the teachers participate in your program?


Prepare classroom presentations to meet specific teacher expectations and student demographics. Is your presentation interactive and age appropriate? Have you considered a variety of techniques across all your lessons, including role playing, simulations, games, and music?


Pay particular attention to your opening, “ice-breaking” activity to engage students immediately. Is it something that will get them out of their seats and talking? Do you have an interesting story that illustrates good financial decisionmaking?

Keep your activities experiential and appeal to emotions. Can you use fictional stories and characters for very young children? Can you incorporate personal, real-world anecdotes and examples for older youth? Can you provide a simulation activity that lets youth make decisions and live with the consequences?

Prepare and practice your material thoroughly. Stick to a few key topics. Can you anticipate student questions? Do you have extra material in case you have extra time? Do you have alternate activities in case students are not responding to your planned material and you need to “switch gears”?

Assess each presentation soon after. What went well? What needs improvement? What “snappy comeback” have you thought of now that you want to have in your repertoire for next time?

Take advantage of existing free and low-cost programs and materials. How can you adapt them with references to current events or local situations?

Recruit volunteers among your coworkers, and community and business colleagues to help with presentations. Can you invite a skeptical board member to join you at school to assist and observe financial education in action and see its value first-hand?

Involve parents by addressing them at one of the school’s parent/teacher organization meetings. Is there an opportunity to teach parents how to manage money and instruct their children at home?

Model Youth Program Guide Best Practices & Proven Techniques

Chapter 4:

Working With Schools Summary Schools and parents are ill-prepared to teach personal finance to youth. Credit unions can help by providing financial instruction in the classroom. In the process, credit unions can build relationships with teachers and parents and good will in the community.

Highlights u There’s no foolproof, cookie-cutter approach to getting into schools; you have to be flexible and creative. Start by finding out what your local schools need. To win over administrators and teachers, it’s important show them how they’ll benefit, especially in terms of meeting relevant state curriculum standards.

u Keep presentations current so that administrators and teachers can see that they will resonate with students. To engage students, classroom activities must be real-world, experiential, fun, and age-appropriate.

u Gear presentations to the age of the audience or risk losing them. Characters and multiple activities keep young children’s attention. Older children want to be taken seriously, so real-life activities work better than fantasy or fiction. High school students can deal with more complex, in-depth lessons tied to the everyday concerns of their lives.

u It isn’t necessary to reinvent the wheel—there are many free and low-cost educational materials and programs available.

u Organizations that have missions and objectives similar to your credit union’s, and that serve the same populations, can make excellent partners for developing and implementing educational programs.


football coach bounds into a sixth grade classroom and blows his whistle. Loudly. “Heads up!” he bellows. “It’s game time.” Students sit up and take notice. They’re intrigued, energized. They want to see what’ll happen next. It’s not really a football coach… It’s Jeremy Cybulski, youth program coordinator at Community Choice Credit Union, Livonia Mich. He’s there to teach financial goal setting—and he has the students’ attention. He continues with the football theme to keep the lesson fun and interesting. “Sometimes you have to sneak the information in there,” he says. It can be a challenge to keep students engaged throughout a financial education class, and an attention-getting opening and theme helps, as do hands-on, reallife activities. That’s assuming you can get into the schools to teach, which isn’t always a given. (See Sample “Letter of Introduction to School Officials.”) Administrators can be protective, guarding teachers’ and students’ precious time against what they could perceive as a sales talk. Teachers are pressed to focus on preparing kids for standardized tests, and reluctant to allow time for “extras” like financial education. And when you do get into the classroom, students’ attention spans can be short. They may not readily see how financial education applies to them and why they should listen. This chapter focuses on ways to build relationships with administrators and teachers and get access to students. It also covers effective

Be Sure To Emphasize the benefits of financial education to the administrators and teachers as well as the students. For example, point out how your lessons will reinforce state curriculum standards. Stress any special features of your program, such as having staff who can teach in a language other than English.

ways to engage and educate young people at the elementary, middle school, and high school levels.

How to—build a solid relationship with schools Area schools are a great place to connect with young people, educate them about financial literacy, build awareness of your credit union, and attract lifelong members. Most schools certainly need assistance with financial education; the Jumpstart Coalition for Personal Financial Literacy says fewer than one in five high school students have completed a one-semester personal finance course in school. Close to one in three have taken a course where some content covered personal finance, but the responses don’t specify how much—it could have been just a couple of hours. Jumpstart’s most recent national survey shows that high school seniors’ average financial literacy score—once again—is an F1. This leaves parents as the primary teachers of financial literacy, but many are poor role models. Bad financial habits pass from generation to generation, but credit unions can help break the cycle. Providing effective financial education in school classrooms is one important way to accomplish this. (See Sidebar “Get Parents Involved.”)

M O D E L Y O U T H P R O G R A M G U I D E 43

Get Parents Involved Parents can be an important resource too. “I’ve found that more and more I’m able to rely on parents,” says Community Choice Credit Union’s Jeremy Cybulski. “I participate in Parent Teacher Association meetings, and I’m at school open houses, so they get to know who I am and understand what I have to offer.” (See Sample “List of Financial Presentation Topics for Schools.”) Once parents understand how financial education is helping their children, they’re eager to contribute. “They ask what I need and they’re willing to do it,” says Cybulski. “If I’m having a contest, they’ll pick up the prizes. They’ll make banners. They’ll staff my table at open houses. Parents are a great volunteer resource, which helps you cut your costs.”

More credit unions are getting involved. The National Youth Involvement Board (NYIB) tracks its credit union volunteers’ classroom presentations annually, and it reports that during the past school year, more than 9,800 of its network members visited classrooms across the nation. As a result, more than 289,000 students heard messages on the wise use of credit, savings options, budgeting, smart shopping, careers, and credit union philosophy2. If your credit union wants to join the ranks, the first step is getting into the schools. Sometimes they’ll approach you; other times they’ll respond eagerly when you contact them. Sometimes it’s a challenge. School districts have different cultures, so there’s no one-size-fits-all method for building relationships. Here are some innovative ways credit unions are succeeding in doing so. (See Sample “Offer to Speak in the Classroom.”)

You Got That Right Each year members of the National Youth Involvement Board network teach hundreds of thousands of students about credit unions and personal finance. 44


How to—get in the door Opportunities to establish school contacts and raise awareness of your credit union are everywhere, indicates Amy Crowe, public relations and education liaison at Great Wisconsin Credit Union, Madison, Wis. When you interact with teachers or administrators, add them to your contact list, she suggests. She gives teachers she meets several of her business cards and asks them to pass the cards along to other teachers. If credit union employees have friends in the school system, she asks for that contact information. Sometimes Crowe asks to meet with school principals or teachers. She recommends doing research first to find out what teachers handle money-related education. “In high schools, I’ve found there are often two tracks—one for students headed toward college, one for those who aren’t. College-bound

Be Sure To Report your classroom presentations to the National Youth Involvement Board to help support the movement’s claim of leadership in financial literacy. (See Resource List.) students often get finance through an economics class. Non-collegebound students often get it through a consumer-living track. In middle schools it’s usually part of the social studies curriculum.” Check your state’s regulations before meeting with administrators or teachers, Crowe advises. Each state is different; some mandate a semester of financial education, some require less, some don’t require any. “In Wisconsin there is a state model for academic standards for personal financial literacy, outlined in a packet the Wisconsin Department of Public Instruction provides,” she says. “It tells you, by age, what students need to learn about financial management. When you go into

a school, you’ll strengthen your case if you can show that your presentations will supplement the standards with real-life examples,” she continues. “Those are buzzwords principals and teachers pay attention to.” To build a relationship, Crowe explains how her presentations will help reinforce teachers’ instructions. “A teacher might cover something like how to balance a checkbook. I can expand on it and bring the financial institution perspective—like what happens if they bounce a check—that’s real-world experience the teacher doesn’t have.”

How to—use the backdoor When it comes to getting into schools, it’s often most effective to go through the backdoor. “Who do you know in the parent-teacher organization or do any of your staff members’ kids go to the school?” asks Pam Swope, marketing manager at FinancialEdge Community Credit Union, Bay City, Mich. “They might be able to put you in touch with a teacher. “Sometimes going through the front door to administrators works, but if you can use your contacts to get an in-house cheerleader first, you have a lot better odds of getting face time with administrators,” she continues. Your “cheerleader” can get the process started. Remember that what works in one school district might not work in another, she cautions. “You can’t make a cookie-cutter pattern for doing it. Schools don’t operate that way—even two schools in the same district—you have to be flexible and creative.” Some people send letters to schools, Swope notes, but she hasn’t heard positive things about that method. “Letters tend not to get followed up on.” She does recommend hosting or sponsoring community events

to raise awareness of your credit union. “You can do many things, like seminars. Some events don’t even have to be financial; you just have to have your name out in the community so the schools recognize you.” Swope’s credit union participates in local Back-to-School Days for teachers. “Most schools have training days for teachers, if you can contact the person who puts it on, ask if you can support it,” she says. “You can sponsor breakfast or lunch and have a table where you give away goodies like highlighters or yardsticks. Then you can talk to the teachers directly and give them a flier about your programs. If you have a prize drawing it gives you a contact list to follow up with teachers.” Remember that with No Child Left Behind, “it’s mandated that schools cram a certain amount of curriculum into their days,” Swope says. “Unless you can show where financial literacy fits into that curriculum—or if you’re in a state where it’s mandated—they often don’t have time in the day to include it. Do your homework. Know what the state requires, what they’re covering, and how what you have fits with what they’re required to do.”

Be Sure To Look for a teacher who will “champion” financial education and know how to win the support of school administrators and the school board.

How to—be accepted Karin Kovalovsky, vice president of marketing for Air Academy Federal Credit Union in Colorado Springs, Colo. recommends using “the ABCs: acceptance, belief, and communication.” Her credit union has developed solid school relationships this way. Do area school districts know Working with Schools

who you are? Do they know what a partnership with your credit union can do for them? If the answer is no, get the ball rolling by finding out what your schools need. Begin with market research—ask for feedback from teachers, school administrators, and parents. There are many creative ways to get past a school’s gatekeeper to reach a key person. You can attend local civic meetings to meet principals and superintendents who are active in their communities. Attend school board meetings or serve on a local school committee. Ask coworkers with children in the schools to help you form relationships with school officials. Encourage staff to volunteer at school events on your credit union’s behalf. To gain acceptance, school educators need to know what you bring to the table. They need to hear about the programs you offer and what those programs can do for their students. Air Academy Federal divides school stakeholders into three groups—administrators, teachers, and families—and appeals to each. Figure out how you can help administrators deal with politics, financial challenges, growth challenges, and parents. Air Academy Federal conducted extensive research on its school districts that looked at marketplace trends.

“For example, we determined the percentage of students who receive reduced or free lunches,” Kovalovsky says. “We then referred to that information when discussing our micro loans, our free financial literacy programs for parents, and our checking program for high-risk members.” She and her team also considered the special challenges associated with life stages. New teachers fresh out of college may not receive a paycheck for two months after they start working and as a result, may have a cash flow problem. To help them, Air Academy Federal created a special-rate, one-year $1,500 loan that returns all interest paid as long as the borrower makes payments on time. “We also offer special incentives for member school district employees,” says Kovalovsky. “Employees who open checking accounts with direct deposit each receive $50.” Publicity and out-of-the-box programs are ways for schools to receive recognition. “We offer schools the chance to have studentrun branches, which supports their

Be Sure To Emphasize the potential benefits to the school district, the school, parents, and students from a partnership with your credit union.



interest in promoting financial literacy and teaches valuable life skills to the student workers,” Kovalovsky says.

How to—gain trust Once you get your programs in the door, you need to cement schools’ trust in you. One of Air Academy Federal’s core events is a back-to-school orientation for school staff. In return for serving breakfast, the credit union asks to staff a table with a special bee-themed trade show display to explain its financial literacy program “We Bee-lieve.” “We set up a prize wheel (with chocolate bees) and hand out a marketing piece with information about financial literacy, our personal finance Lunch & Learn sessions, and our art scholarship program,” explains Kovalovsky. In the process of answering questions about these programs and services, Air Academy Federal employees promote the credit union. “Typically, by the end of

Be Sure To

How to—communicate

Prepare yourself before entering the classroom. Know your subject and be comfortable with the material you plan to cover. Also know your audience. Think about what interests the group. Try not to cover too much material and strive to make the information relevant and useful for the grade level. And know yourself. If you’re uncomfortable telling a joke, don’t. Do what’s comfortable and natural for your presentation style.

Teachers are busy and strapped for time. Putting fliers in their mailboxes doesn’t work because they get too much mail. “If we want to distribute a marketing piece, we attach something, such as a ruler or a candy bar, to make the piece stand out,” says Kovalovsky. To further develop relationships with teachers, the credit union offers complimentary Lunch & Learn sessions. During these presentations, teachers and staff learn to identify and prioritize their personal money needs, and come to understand the value of smart money management now and in the future. Sessions stress the importance of financial literacy and discuss how students would benefit from learning simple skills, such as checkbook management and moneysaving techniques. Air Academy Federal offers to provide guest speakers to classes on a number of personal finance topics. Teachers are also always looking for help with fundraising events, so credit union employees volunteer to pitch in for the after-school fundraiser and use it to interact with staff and parents and get their feedback. Word-of-mouth advertising from participating school staff has expanded the credit union’s reach. Its financial literacy programs, art scholarships, and high school branches demonstrate its commitment and involvement. “More and more educators want to work with us,” Kovalovsky says. “And as our efforts become established, parents can see how Air Academy Federal supports their schools and their children.”

an orientation session, several principals ask us to attend future meetings to better inform staff about teaching students financial responsibility,” Kovalovsky adds. No matter what strategies you use to develop and solidify your school relationships, it’s important from the beginning to emphasize the potential benefits to the school district, the school, parents, and students from the partnership. Then make the actual benefits clear through regular communication with all concerned.

A Teacher’s View Since 1981, Cindy Brady, a high school business education teacher in McFarland, Wis., has taught a money management class for juniors and seniors. “I’m fortunate to have wonderful, intelligent students. However, when it comes to matters of finance, their knowledge is woefully inadequate,” she says ruefully. She gives a pre-test of basic personal finance questions at the beginning of each semester, and recent results were typical: Nine of ten students failed. Without early instruction, students too often get information (or misinformation) only from movies, TV, and friends. Here are some observations Brady’s made over the years. 1. Setting aside funds before spending money is a new idea for many students. Often, student savings consist of what’s left over after spending, but they quickly see the value of paying themselves first to reach their financial goals. 2. Although they try to be sensible consumers, most teenagers simply never think about less-thanimmediate financial goals. 3. Today’s teenager minds demand variety, and teaching methods must vary as well. Reading from a textbook quickly becomes old, but teenagers love to hear personal stories and real-life examples. One year, during the federal income tax unit, a student named Michael shared that his father had evaded taxes for some time. Because of the penalties, bankruptcy was the only option left for his family. “The impact of Michael’s story on the class was greater than anything I could have told them about the responsibility to pay taxes,” Brady recalls. 4. Students say that stories from class often find their way into family discussions. Opening up these dialogues is always beneficial because parents can provide information about financial and personal values.



How to—keep current Kathy Crim, director of education at Texas Dow Employees Credit Union, Lake Jackson, Texas, has been approaching

Pre-presentation Questions As soon as you’re invited into a classroom, ask the teacher these questions. He or she will play a major role in the success of your presentation, so you want to be sure you understand the expectations. 1. What grade(s) will you be speaking to? Will classes be combined for your presentation? How many students will attend? 2. What are the students currently studying? 3. How long is the class period? 4. Do any students have special needs? 5. Do you need to bring your own equipment? 6. Are there any special sign-in security procedures?

schools and teaching youth financial education for years. “I started going out to schools and knocking on teachers’ doors, asking if I could come in and teach. It evolved from there,” she recalls.Now she has an extensive youth education program and reaches numerous students each year. To garner repeat invitations into schools, reminds Crim, you have to keep your presentations current so administrators and teachers see that they resonate with students. “Financial education is taking a dramatic turn because today kids do everything on the computer,” she says. “I’ve changed my presentations to talk about how they can manage their accounts online. If I teach an hour-long class on writing checks and keeping a paper check register, it would be useless.” To stay current, she continually asks students how they do things. “When I ask how they keep track of their checking accounts, they say they look at them online every day,” Crim relates. “We have to understand what’s on their minds or they won’t listen to us—just like we didn’t listen to our parents.” (See Sidebar “A Teacher’s View.”)

Nuts and bolts While no two presentations are alike, there are some general rules for success. First, keep it simple— concentrate on one or two specific subjects. Working with Schools

Start strong. An attentiongrabbing introduction goes a long way in getting your point across. Remember Jeremy Cybulski’s football coach approach? A dramatic question such as, “How much do you think you’ll earn in your lifetime?” can also start you off with a bang. Put students’ answers on the board before pointing out that at the average starting salary ($49,928), a computer programmer would gross $1 million in 20 years3. (See Resource List.) “Keep in mind that students have short attention spans and are bombarded with information all day long. If you want to be heard, don’t lecture,” emphasizes Heather H. Harris, vice president of community development at Isabella Community Credit Union, Mt. Pleasant, Mich. “Variety is essential, so change your teaching technique every 20 minutes. “Try role playing, hands-on activities, and simulations,” she advises. “For example, if you’re discussing credit, have a student pose as a loan officer and another as an applicant. Use examples and short stories to stress a point. Students learn in different ways, so make your presentation interesting to all types of students.” Sandi Carangi, vice president of business development at Erie Federal Credit Union in Erie, Pa., frequently uses online activities. If you do so, she cautions, “Be sure the classroom has computer ac-

cess and that the Web sites you’ll be using won’t be blocked by any firewalls.” If the students are involved and start asking questions, throw your well-defined plan out the window and follow their lead, Carangi advises. “I had one class where all they wanted to know about was the difference between debit cards and credit cards, and the teachers in the back of the room started asking questions about it too!” So that’s what she covered. In a nutshell, if possible, arrive early and observe the students you’ll be addressing. Start on time and project energy. Be careful not to talk down to students. Avoid jargon such as “par value” and “instrument” (in the sense of a type of financial security). Silence is golden when asking questions—give them time to formulate a response. Use eye contact and establish a relaxed and informal atmosphere by moving around the room. Cover the topic thoroughly and appropriately for the age group, and end with a flourish. Sum up what you’ve been emphasizing, and close with handouts or gifts.

Tips for Teaching Young Children 1. Relax, but be the authority figure. Stand tall, talk loud—but don’t yell—and have pride. 2. Be very animated and expressive, and avoid speaking in a monotone. 3. Have children act out the story, such as clapping three times when they hear a key word. Add props that give children a role. 4. Play games that reinforce the key points of your lesson or story. 5. Create an identity as the person from the credit union. Digital Federal Credit Union’s Diana Wheeler says, “When children see me outside of work, they’ll run up to say ‘save, spend, and share.’”



Tips for Teaching Middle School Students 1. Group games and quizzes are popular with this age. 2. Use statistics about their peers’ money habits to generate discussion. 3. Challenge students’ assumptions and conventional wisdom.

It’s important to gear your presentation for your audience’s age group, or you’ll lose them. Credit union presenters have a multitude of tools and techniques for keeping it fun and interactive for different ages.

What works— techniques for early elementary school “For kindergarten through third grade I usually incorporate stories,” says Community Choice’s Cybulski. “Some books tie into financial concepts. I’ll read the story and build my presentation off of it.” He recently read Judith Viorst’s “Alexander, Who Used to Be Rich Last Sunday,” to a second grade class. “It tells how Alexander’s grandparents visited and gave him a dollar, and he rented his best 48


friend’s snake for an hour for 12 cents, lost a nickel through a crack in the floor, bought a deck of cards with a two and a seven missing, and ended up with nothing but a couple of bus tokens,” Cybulski explains. “I have a worksheet the kids can use to cross off the coins Alexander loses. It helps them learn to identify coins, and about the value of money and saving,” he adds. “After the story, I had them do addition and subtraction to double check how much Alexander lost.” The class also played a cashier and customer game Cybulski developed. “I bring in adding machines and do a tutorial. I have trinkets, like friendship bracelets, bouncy balls, and money pouches.” He selects four people to be the cashiers first and each has a line. The students playing customers each get a dollar and pick three items. The cashiers have price lists; they add the prices and give change and receipts. Then the students switch roles. At the end they can each select one item to keep. “Involving characters and doing multiple activities keeps their attention,” Cybulski says. “If I just read the story it wouldn’t grab them so much.” And they’ll remember you. When your presentation is fun and interactive, children will remem-

ber the lesson—and you. They’ll go home and talk to their parents about the person from the credit union who came to school and talked to them about money. This stimulates conversations at home that will show parents how much their children learned about money and personal finance. Everything makes a lasting impression with young children, from the way you enter the classroom and say good morning, to the way you hold a book you’re reading in the front of the classroom, notes Diana Wheeler, youth program specialist at Digital Federal Credit Union in Maynard, Mass. “When I run into any of the students from the classes I visited, they point me out to their parents,” says Wheeler. “Quite often, parents will thank me for sharing such important information with their child. It’s very gratifying when this occurs.”

What works— techniques for older elementary and middle school For very young children it works to use fantasy and characters, but for older ones it works better to personalize your lessons and make them real. “Be careful not to dumb it down too much, especially for older kids—they pick up on it real quick,” Cybulski says. “They want to be taken more seriously and often don’t want to admit they enjoy interactive activities. You have to get

Be Sure To Follow up. “When I do a presentation, I give my business card to everyone in the class. It has my cell phone listed, and I tell students they can call me anytime with financial issues, such as not understanding a loan application, or the fine print on a credit card application, or repairing their credit,” says Arapahoe Credit Union’s Julie McLean. “I have students I met three years ago who call me periodically—the rapport is awesome.”

Tips for Teaching High School Students 1. Lectures are death; avoid long stretches of one-way talk. 2. Include true stories, which really resonate with students. 3. Use up-to-date visuals. For example, the fashions in an old video will be a huge distraction. 4. Look for the widest possible theme. For example, Disney references will probably appeal to more students than content based on NASCAR. 5. Avoid the early-morning slot or late-afternoon slots, when students’ energy slumps. 6. Make yourself available after class, when students feel more comfortable asking “dumb” questions.

them to let their guard down.” The Jumpstart Reality Check Survey helps spark discussion and learning about the realities of growing up and becoming financially independent. (See Resource List.) “There are about 30 questions based on lifestyle preference, like, ‘When you grow up, do you want to live with your mom and dad, by yourself, or with a roommate? Will you use public transportation, have a motorcycle, or a new or used car?’ ” explains Cybulski. “It tells students how much they’ll need to make to support that lifestyle and lists professions to consider that fall in that salary range.” Cybulski also uses a game show he’s created called “Name That Salary.” It includes a game board with 10 different professions and salaries listed, from a forensic scientist at $35,000 to a professional athlete at $102,000. “Students try to get the closest to guessing average annual salaries,” he says. “They usually think scientists make tons of money, but they make less than teachers do. We talk about how teachers need to get recertified and have other requirements. They think professional athletes make millions, but we talk about how that’s only the top ones, and the averages include benchwarmers too.” When you talk about careers, get Working with Schools

students to think about things they could do that involves something they like. “NEFE talks about the fact that you have to work, so you might as well do something you enjoy,” says Cybulski. “Go around the room and ask what they like. It’s a good way to get to know them. If they like music, they don’t have to be a lead guitarist, they could be a roadie, or do promotions, or manage a record store, or be a music teacher.” He tries to get students to think about whether they need to be at the top of the heap, or if they could find satisfaction in another way. “It’s real and personal,” he says. That’s what keeps their interest. It’s the only way I’ve found to make the information really effective.”

What works—techniques for high school You can get into more complex, in-depth topics with high school students, and it’s even more important not to talk down to them at this

age. They’ll sometimes make you work to get their attention. “I’ve taught high school personal finance classes at 7:30 in the morning, and it’s extremely difficult— some have their heads down on their desks,” says Cybulski. “To get their attention I do things like, when someone participates or asks a question, the teacher runs around with fake dollars and gives them one. At the end of the class, they can turn it in for something small or wait until the end of the semester and get a bigger payout.” This approach incorporates both instant and delayed gratification, he indicates. “It takes a lot for them to ask a question, especially at the high school level. They’re a little shy about asking in front of their peers, and most won’t. “They don’t want to seem stupid,” he continues. “When they do ask a question, if it seems simple or other people start reacting like it’s a dumb question or answer it for them, it’s really important that you don’t

Money Talks—Are You Listening? When Carlin Tran, a student at Biloxi High School in Mississippi called Keesler Federal Credit Union’s MoneyTalks program “essential for any teenager who plans on being financially stable,” credit union employees knew the after-school program was success. MoneyTalks is a four-week in-depth financial education workshop. Every week, MoneyTalks covers topics such the credit union difference, managing checking accounts, and creating a budget. Students find out that credit is a privilege when they learn about credit cards, credit reports, and the perils of bankruptcy. The final week, students get connected and learn how to protect their identity online and how to use Keesler’s online services—a must for this age group. Once MoneyTalks students pass quizzes about good checking and credit card management, they receive a checking account and a cosigned $200-limit credit card. The credit union’s MoneyTalks instructor monitors the accounts monthly looking for any potential problems. “So far this hasn’t been necessary,” notes Keri Foretich, Keesler Federal’s assistant manager of express lending. “All the students are making their credit card payments on time and staying under their credit limits. These students will remember the positive experience they had with their first credit cards.” Keesler Federal started MoneyTalks in the spring of 2006 and it’s been so popular that teachers from other schools want to know how they can participate. As of the end of the fall 2007 semester, there were 41 MoneyTalks graduates. “Our goal is to someday have at least 120 program graduates in every school, every school year,” says Foretich.



Contents of the HSFPP The NEFE High School Financial Planning Program provides a seven-unit student guide and instructor’s manual at no cost. The curriculum give students the tools to: 1. Create a personal financial plan 2. Create a budget 3. Invest 4. Use credit 5. Manage money 6. Buy insurance 7. Choose a career

somehow add to that reaction.” Cybulski tries to build the questioner up and justify their asking the question—whether they’ll admit it or not, it probably benefited half the class. “I’ll tell them it was a good question, and sometimes bring it back to the class, saying, ‘How many of you knew this?’ Or I’ll expand on it and maybe add another question: ‘You knew this; did you also know this? That’s why it was a great point to raise.’” He always tells students that he’ll be available after class for questions, too. “At least three or four will approach so they don’t have to ask in front of the class,” he says. “Be ready to switch gears,” he adds. “You can’t assume kids of a specific age are at a certain level. I always bring more than I think I can fit into the hour just in case. Some kids pick things up right away. Others act up or don’t get the information right away and it takes longer. It’s really hit or miss.” Julie McLean, director of financial education at Arapahoe Credit Union, Centennial, Colo., doesn’t just speak to high school students. “I engage them with multimedia presentations. I have music, video, PowerPoint, and handouts to follow along with. The variety keeps them interested—they have short attention spans,” she says. “I always ask questions related to their world,” McLean notes. “When we talk about credit, we’ll look at credit reports and talk about the 50


good vs. the bad. I tell them they can’t get insurance, financial aid, or an apartment with a bad credit score. I relate it to them.” She leads an exercise showing how an auto buyer with a good credit score could get an interest rate of 5.25%, while a buyer with a bad score would get a 16% rate and pay $4,000 more for the same car. “They totally get it,” says McLean. “I also tell them about the site so they can go home and look at it with their parents. That kind of pulls the whole thing together, and makes it a family activity. Sometimes I get letters back saying that the parents had no clue either.” (See Sidebar “Money Talks— Are You Listening?”)

Off-the-shelf programs It may seem like a daunting task to develop a youth program, but remember, “Nobody has to start from scratch,” says John Faries, vice president of accounting and marketing at Space Age Federal Credit Union, Aurora, Colo., and chair of the NYIB. “If you want to know how to engage a particular age group, send a question to NYIB’s listserve.” Also look at CUNA’s Personal Financial

Be Sure To Consider offering local teachers instruction, too. Many are uncomfortable teaching personal finance because they never learned to manage their own money.

Initiative ( and Jumpstart’s online clearinghouse. (See Resource List.) “If you think of something cool, odds are someone’s done it and has figured out what works,” he continues. “There are people out there who have the answers.” If you face budget issues, NEFE’s High School Financial Planning Program® (HSFPP) is free and there are many other free or low-cost resources. A team of financial services professionals and teachers rewrote the HSFPP in 2007, to make it more teenager-friendly and to update the content for today’s complex financial world. Credit unions nationwide are using the program in several ways, explains John Parfrey, director of the HSFPP. “They introduce it to school decision-makers and help implement it in schools; they sometimes help teachers teach it in schools; they sometimes train teachers how to teach the program; they sometimes train other credit union professionals to introduce and teach it in schools; and they promote it at many events in their states,” he says. (See Tips “Teacher Recruitment Plan, NEFE High School Financial Planning Program.”) Financial Edge Community’s Swope is a big fan of using existing tools. “The most important thing is that you have something. My credit union is fairly small, and my biggest suggestion is to look at what’s available through canned or cooperative education and advertising programs,” she says. “There are a lot of really well-developed programs out there, and you can customize them to the degree your credit union feels appropriate.” There’s no doubt it takes time to provide youth financial education, but you don’t have to do it alone. Other credit union staff can assist, and what better way to get a board member’s buy-in than to bring him or her into a classroom for a firsthand look at how kids benefit? Also recruit your business partners

and community organizations—and don’t forget parents.

Be Sure To

Potential presenters

Look to your local Cooperative Extension for help in contacting schools and working with teachers.

You can cover more classrooms if you recruit others to do some of the presentations. But when you ask other credit union staffers or volunteers to present, are they scared? Anxious? Tell them they don’t have to be. They should know that some of the most effective teachers are

those willing to share their personal experiences and knowledge. Credit union employees and volunteers see personal money management extremes on a daily basis, and can provide important insights to students. When they teach basic financial skills with a dose of reality,

A Three-Way Collaboration Erie (Pa.) Federal Credit Union has established a valuable partnership with its local Junior Achievement (JA) group and the Newspapers In Education (NIE) program. Sandy Carangi, the credit union’s vice president of business development, had known Anna McCartney from NIE and Erica Jackson from JA for many years. “We sat down last summer to form a plan for the partnership,” she says. They wanted to make newspapers available to all Erie-area schools, and have them include weekly “invest in your future” financial education articles and activities. They’d provide teachers with lesson plans built around the articles, and Penn State University would help create an online component. After putting the plan together, Carangi applied for and received a $3,000 grant from the Pennsylvania Credit Union Foundation to partially fund the program; JA and the United Way each put up $3,000 each as well. Under the plan, Anna gathers information and writes the articles and lesson plans, using resources such as the NEFE program, with Carangi assisting at times. Erica develops pre- and post-tests to measure the program’s effectiveness. The three met with teachers to explain how they could receive the newspapers and lesson plans, and request classroom presenters from the credit union, if they liked. JA offered its courses and classroom speakers too. They attended several school open houses in September 2007, where they set up tables and informed parents about the program. In just four months, Carangi spoke to about 590 students in 10 different classrooms. Now 72 schools and more than 6,000 students are participating. “We gave the pre-test to a sampling of students, and at the end of the school year we’ll give the post-test to see how much they’ve learned,” says Carangi. “Most of the students missed half the questions on the pre-test, and they’re pretty basic questions.” She’s hopeful the post-test will show real progress. She’s found that her partnerships make it easier to get into schools. “When I worked at other credit unions and I called schools to ask if I could come in they’d usually say no,” she says. “They were concerned about having businesses come in, but now that JA is our partner they’re eager to have us.”

Working with Schools

they can change a student’s life. Your potential presenters may be inspired to hear that, for many of the credit union people who reported to the NYIB that they visited classrooms last year, it was their first time back to a classroom since they were students. Invariably the CEOs, tellers, loan officers, and branch managers who went back to school found the experience “extremely positive,” “rewarding,” “enlightening,” and “great fun!” Tell staff that making classroom presentations offers personal benefits, too. You can hone your public speaking skills, enhance your creativity, and expand your consumer financial knowledge. Facing a classroom of lively seventh-graders can quickly improve your listening skills, teamwork and cooperation techniques, and sense of humor. In addition to educating future credit union members about the benefits of promptly repaying loans, student presentations help your credit union support the International Credit Union Operating Principles. (See Resource List.) A single 55-minute visit to a high school can address the principles of ongoing education, social responsibility, and financial stability.

Presentation partners You also can recruit industry experts to assist with presentations. “You’ll be surprised what partnering resources you have and what they can do for you,” says Cybulski. “We work with Accel Members Financial Counseling, and I was talking with one of their representatives about doing financial education before giving out credit cards. He said, ‘Part of our partnership entails providing education on products and services.’ “Credit unions might not realize the resources available in their existing partnerships,” he continues. “Explore your business relationships—mortgage companies and credit bureaus do presentations,



there’s probably expertise within CUSOs you set up—you do have resources at your disposal.” You can also collaborate with nonprofits like 4-H, Boys & Girls Clubs, or the Boy Scouts and Girl Scouts. This summer Arapahoe’s McLean is working with the Young Americans Center for Financial Education’s Young AmeriTowne program and Arapahoe County Youth Workforce to put together a summer camp for youth ages 15 to 18. “It’ll give them information on preparing for and paying for college and on opening youth accounts,” she says. “We’re planning a two- or three-day event.” The Cooperative Extension System can also be a very helpful resource. “We have a strong partnership with the head of our state Extension agents,” says Karen Smith, director of outreach services for Montana Credit Unions for Community Development, which is part of the Montana Credit Union Network, and is a resource for state credit unions looking to provide youth financial education, among other things.



Smith developed a set of lessons for teenagers called Credit Savvy. She explains, “It uses calculators to show that, if you have a credit card balance of $300 and are paying just the minimum balance, this is how long it will take to pay it off and how much you’ll actually end up paying.”

page and have same goal to serve clients or members,” she says. “Keep communications open and try to work as a collaborative; don’t say, ‘It’s our project and you’re helping us.’ Treat them with respect.” Erie Federal’s Carangi advises looking for organizations already involved in financial literacy education. “Call to find out if you could volunteer your time to be a guest speaker and provide financial literacy materials and handouts. Join organizations that have contact with these groups such as chambers of commerce, business organizations, school organizations and non-profit groups,” she recommends. “To effectively work with these groups, your credit union has to make a time commitment—regularly attend meetings and follow up with your contacts and speakers, for example.” (See Sidebar “A ThreeWay Collaboration”) Collaborations can help you avoid duplication and create a stronger program. “It’s so much more effective if like organizations work together,” says Smith.

Be Sure To Consider offering personal finance instruction to parents through local parent/teacher organizations.

Her league makes the tool available to Montana credit unions and schools. “As we communicate with credit unions, we encourage them to partner with their local Extension agent, the schools, and organizations like Consumer Credit Counseling,” she adds. To find partners, she recommends identifying organizations that have a common objective and are reaching out to the same populations you are. “As you work with them, make sure you’re on the same

Resource List

Where To Go for More Information

• Reality Check, Jumpstart Coalition for Personal Financial Literacy

• Cooperative Extension System—Select Local Extension Office

• Teach Children About Money (brochure)—Search 20875

• Evaluation of the NEFE High School Financial Planning Program, National Endowment for Financial Education—Select HSFPP Evaluations • Financial Literacy: Improving Education, Jumpstart Coalition for Personal Financial Literacy (bottom of page) • Financially Made—Search “financially made” • Googolplex (online periodical for elementary-, middle-, and high school students)—Search “googolplex” • Guides to Independence (online personal finance curriculum)—Search “guides” • International Credit Union Operating Principles • Junior Achievement—Select Programs • Mad City Money (budgeting simulation)—Search 27732 • National Youth Involvement Board • NEFE High School Financial Planning Program—Select Resources for Youth • Newspapers in Education—Select Lesson Plans, Elementary, Middle, Secondary • Occupational Outlook Handbook (job descriptions, prospects, and earnings projections)

• Thrive by FiveTM: Teaching Your Preschooler About Spending and Saving—Select Resources for Youth • Value of a Dollar: Teaching Your Preschool Child—Search 26672 • Value of a Dollar: Teaching Your K-8 Child—Search 27271 • What Teachers & Students Say about the NEFE HSFPP, National Endowment for Financial Education—Search NEFE HSFPP, select Say What? Credit Union Web sites • Air Academy Federal Credit Union • Arapahoe Credit Union • Community Choice Credit Union • Digital Federal Credit Union • Erie Federal Credit Union • FinancialEdge Community Credit Union • Keesler Federal Credit Union • Space Age Federal Credit Union • Texas Dow Employees Credit Union

• Personal Finance Initiative (online financial literacy clearinghouse)

Working with Schools




Letter of Introduction to School Officials DATE SCHOOL ADMINISTRATOR SCHOOL ADDRESS Dear SCHOOL ADMINISTRATOR: I would like to offer my services as a guest speaker to your students about money management. I am prepared to teach [PROGRAM NAME OR LESSON TOPIC LIST]. As you may be aware, personal bankruptcy rates are at record levels nationwide. At the same time, consumers under the age of 18 have an enormous amount of spending power – an estimated $170 billion a year. It is no surprise that advertisers are drooling over the youth market. And it’s a shame that young people are ill prepared to make wise spending and saving decisions in a world that is becoming increasingly complex. The Jumpstart Coalition, a national collection of public and private sector organizations, has conducted surveys of high school seniors’ financial literacy. The results of the studies since 1997 have been the same: An average score of F, with the 2008 results being the lowest ever. Given that your high school students are only a few years (or even months) from full independence, their ability to support themselves and their future families is of vital concern. Research shows that students can benefit from as little as 10 hours of instruction during the year. This instruction can complement your business, economics, math, social studies, consumer science, or related classes with real-world applications. Let me stress that there would be no cost to your school or your students. [CREDIT UNION] provides student and teacher materials at no charge as a public service. There also is no sales component to my presentations. In a few days, I’ll call your office to ask about setting up an appointment to show you a sample materials and answer your questions about the lesson plans. I hope that you will have the time to meet with me soon. Sincerely,




Sample Offer to Speak in the Classroom

Welcome back teachers! As part of our partnership with Arlington Public Schools, Arlington Virginia Federal Credit Union is happy to speak to your students on a variety of financial education topics. If you’re planning a unit on any of the topics below, please contact us! We have financial professionals available to speak about any financial topic for all grade levels in both English and Spanish. Elementary:

Middle School:

High School:

• • • •

• • • •

• • • • • • • •

Money Savings Checking Accounts What is Credit?

Saving & Investing Checking Accounts Budgeting What is Credit?

Setting Financial Goals Budgeting Saving & Investing Account Management Auto Buying ID Theft Insurance Credit, Credit Cards & Credit Reports

Contact Patty Browne to book your speaker today! 703-526-0200 x265 or

Source: Arlington Virginia Federal Credit Union.

Working with Schools



Tips Teacher Recruitment Plan, NEFE High School Financial Planning Program® Steps in finding and convincing teachers to implement the NEFE High School Financial Planning Program (HSFPP) with your help: 1. Identify prospects The HSFPP is appropriate for all high school students and can be successfully integrated into several subjects, such as economics, math, consumer/life sciences, and social studies. It is written at an 8th-grade reading level. Contact NEFE (303-224-3516; to see if any teachers in your area have asked for volunteers to help teach the program or to add your name to the volunteer list. To find new candidates, consider teachers your child has had, ask parents for suggestions, and seek recommendations of top teachers at PTA/PTO meetings. 2. Prepare your case Demonstrate your willingness and ability to teach by summarizing program content and making the following points: • Youth financial illiteracy is rampant (share statistics from the National Jumpstart Coalition for Personal Financial Literacy report “Financial Literacy: Improving Education;” (See Resource List.) • The HSFPP puts curriculum concepts into a real-life context; • HSFPP classroom materials and team-teaching assistance are provided as a public service at no charge; • The HSFPP does not sell financial services or promote specific institutions; • The HSFPP develops students’ decision-making abilities, sense of financial responsibility, and long-term confidence about money management, helping them avoid excessive debt, bankruptcy, and related social problems such as divorce. • HSFPP content is regularly subject to expert review and updating; • The HSFPP can be incorporated into several different courses and adapted to a range of available time slots. 3. Present your case Make an appointment with the prospective classroom teacher with sufficient time (20 to 30 min.) to explain the program’s benefits. Start with an overview of the HSFPP’s scope and connect the teacher’s subject matter and HSFPP content as clearly as possible. Establish your qualifications (both formal and informal) to teach the material. Offer to speak with anyone else who would be involved in the decision to use HSFPP. (This will vary among school districts.) Note: Many teachers have the authority to add the HSFPP to their curriculum on their own. Others might need the approval of a department head, the principal, or even the school board. In any case, follow the teacher’s lead. Leave behind supporting material -- the HSFPP information kit, “Evaluation of the NEFE High School Financial Planning Program 2003-2004,” and testimonials. (See Resource List.) 4. Follow up At the first meeting, set a time for a follow-up contact. Make yourself available for meetings with the administration, if necessary. The timing of your initial contact and the degree of the teacher’s interest will determine whether you can implement the HSFPP in the class during the current school year or will have to wait until next year.




List of Financial Presentation Topics for Schools Community Choice Credit Union CU at SchoolSM Program Financial Presentation List* 2007-2008 Grade Level




Save, Spend, and Share

Basic Money Management

Max’s Money

Simple Money Concepts

Arthur’s Pet Business

Goods & Services

Deena’s Lucky Penny

Counting coin to $1.00

The Go Around Dollar

Currency & Economics

2nd Grade

Alexander Who Used To Be Rich Last Sunday

Making Change

3rd Grade

The Berenstain Bears’ Dollars and Sense

Checks & Money Management

My Dad’s Job

Career Awareness, Finance

Little Bill’s Money Troubles

Basics of Finance & the Credit Union Philosophy

Penny: the Forgotten Coin

Historical and Social Value of Money

Job Applications & Interviewing

Tips about applying and interviewing for jobs

‘Reality Check’ Survey

Affording your Lifestyle

Careers & Income

Choosing the Career You Love!

Budget Survivor

Creating a Household Budget

Plane, Train, or Automobile?

Decide the Least Expensive Source of Travel for your Vacation!

The Biology of Checking

An Interactive PowerPoint Presentation

1st Grade

4th Grade

5th Grade & Up

* Please do not feel confined to the above list of topics. If there are other finance-related topics impacting your curriculum that you would like to have covered with your class, just let me know! I would be happy to create a lesson plan or presentation for you! Source: Community Choice Credit Union.

Working with Schools



Chapter 5

Action Checklist

3 Open an In-School Branch  

Appoint a committee of enthusiastic employees.


Get board approval of the final proposal.

Research in-school branches with your league, other credit unions, and the Internet. (See Resource List.)

Educate local school leaders about credit unions. If the branch will also serve teachers, and staff, explain how you will ensure confidentiality of their account information. Will you provide special training for student tellers? Will you give teachers the option of doing business with the on-site adult branch supervisor?

Recruit one or more school employees to work with students.

Prepare a partnership agreement with school personnel. List what the credit union will provide, including equipment, student training, and supervision. List what the school will provide, including participation in the selection of student staff and coverage in economics or business courses.

Involve students in the planning as much as possible. What hours do they recommend? What suggestions do they have for naming the branch? How can they help create advertising for the branch?


Supervise branch construction.


Launch your initial advertising campaign.

 Decide whether the branch will be tied to

Orient each new class of incoming freshmen and their parents to the branch and its services.

Get senior management approval of your preliminary proposal.

Consult with your credit union’s attorney about local, state, and federal laws.

Hold financial-education courses in classrooms throughout the school year to improve students’ money-management skills—and talk up your branch.

Solicit ideas from staff, teachers, and students.

Establish criteria for selecting a school, such as location, space, grade levels, and faculty support.

Provide year-end reports to the school and the local school district, citing financial education statistics as well as membership and account data.

Prepare your final proposal, incorporating suggestions and revisions.

Prepare your preliminary proposal, including:  Program mission  Regulatory issues  Benefits to credit union, school, teachers, and students  Planned products and services  Hours of operation  Goals and projections  Staff support and oversight  School support  Student roles, selection, training  Recordkeeping and data processing  Equipment  Security  Insurance  Confidentiality  Educational programs and course credit, if any  Insurance  Estimated costs

an internship program to develop future employees.



Select a school. Get the approval of local school leaders and faculty by thoroughly explaining your program’s benefits.

Install equipment. Recruit, select, and train students. Prepare forms and documents. Involve students in promoting and advertising the in-school branch to build and sustain participation. Can students earn class credit for working in the branch? Invite students, parents, school officials, faculty, and local media to your grand opening.

Model Youth Program Guide Best Practices & Proven Techniques

Chapter 5:

Student-Run In-School Branches Summary In-school, student-run credit union branches help students develop a saving habit and learn wise money management. School branches can help credit unions build goodwill within the school system and the community at large. And they build a competitive advantage by locking in the future business of people that banks aren’t interested in serving.

Highlights u Elementary school branches usually emphasize saving. Middle school and high school branches typically offer a range of products and services.

u Even credit unions with limited resources can open mini-branches; those with more resources can operate full-service ones.

u It’s essential to offer financial education along with branch services.

u Working in an in-school branch helps students learn about the world of work and about personal finance. Some credit unions have had success with at-risk or special education students. Student workers can often become excellent employees at your regular branches during or after high school.

u In-school branch members often remain with your credit union long after they complete school.


ix-year-old Sof ía scrounges under the couch cushions and in the washing machine for coins. Does she want to buy ice cream or a toy? No, it’s deposit day at her school’s student-run credit union branch, and she doesn’t want to be left out. Even if it’s just 10 cents, she finds a way to save each week. When she does, the credit union matches her savings up to a dollar, and she’s entered into a monthly drawing for prizes.

Hopefully Sof ía is forming a lifelong saving habit. When she gets to middle school and high school, the student-run branches will offer products such as checking, debit cards and credit cards, along with hands-on financial education that will help her learn more good financial habits. She’ll be able to work at the branches, collecting deposits and counting cash, or making withdrawals and transfers, and entering the transactions by computer. To accommodate adult members, credit unions often have service personnel or small branches in the workplace. Why aren’t there more conveniently located credit union service facilities for young members? This chapter focuses on inschool, student-run branches, and their role in helping build wellinformed, lifelong credit union members. The branches engage a neglected audience on its turf and on its terms. Student-run branches are a great complement to classroom personal finance instruction, and help children and teenagers develop a saving

habit. Working at the branches—as tellers, marketers, assistant managers—students develop good work habits, job and leadership skills. Inschool branches make money management an activity that’s as normal a part of school life as socializing between classes. The branches can help credit unions build goodwill among parents, school officials, and members

You Got That Right By year-end 2007, 169 credit unions in 30 states and the District of Columbia reported operating branches in 555 schools, including elementary, middle, and high school. All are to some degree student run1. of the community at large. And they can create a competitive advantage by attracting young members that banks aren’t interested in serving. Figure 5-1 shows strong growth in the number of credit unions operating student-run, in-school branches. Besides serving young members, these in-school branches educate students about how credit unions work, train them to manage their personal finances, and build relationships with them for the future. When Sof ía’s a young adult looking to buy a car, she’ll likely think first of her credit union. And later, when she needs a mortgage, she’ll probably go to her credit union.

How to—put credit unions in schools Patty Browne, community relations manager at Arlington Virginia Federal Credit Union has managed student-run branches for four years, a couple of those at another credit union. Her credit union now has two branches in high schools, one



Figure 5-1

Self-Reported Student-Run In-School Credit Union Branches* 600 500 400 300 200 100 0




2004 2005 Year-End

Credit Unions




Representing 30 states and the District of Columbia.

at a high school career center, and two in elementary schools. (See Sidebar “Cover All the Bases.”) “I’m always working on adding branches and getting meetings with principals; it’s in our business plan,

Cover All the Bases All successful in-school credit unions are the products of careful planning and long-term commitment. For example, you have to consider legal implications. Check with your state league and your credit union attorney for state laws affecting your in-school branch. Make sure your regulator will allow you to operate an in-school branch under your original charter. Depending on their locations and various state, county, or city laws, credit unions wanting to establish in-school branches face requirements, such as: • State and city licenses • School board approval • Student employee work permits • State banking commission approval • Amendments to bylaws to include in-school branches • Presence of a credit union employee onsite during hours of operation • Worker’s Compensation Insurance for student employees • Modification of insurance coverage and risk management plans to provide liability protection and on-site security.



and it needs to be,” she says. “Support for the program comes from the top, from our board and CEO.” To begin the process of opening a new branch, she advises networking at school events. “Many schools have a partnership coordinator who works with community businesses to bring enrichment activities into classrooms,” she says. “Schools are looking to be more relevant to what businesses need and partnerships are a great way of meeting those needs.” (See Sample “Student-Run Branch Coordinator Job Description.”) Make friends with the coordinator and inform him or her about your in-school branch program, Browne suggests. Offer to speak at educational programs for teachers. Whether a school will want a branch is often a matter of timing. “They may be interested, but the time may not be right,” says Browne. “Don’t give up; that’s the time to network and build relationships with teachers. Go in and do financial education, support career days. They’ll get to see you as a partner, and when you think the time is right, you can go in and talk about branches.” Negotiations with school of-

ficials are more than selling the benefits to students and school. You’ll want to make it clear that the branch is a shared responsibility of both parties. Be prepared to present in detail what the school can expect from you and what you need from the school. (See Sample “Credit Union-School Responsibility Overview.”) Sometimes teachers initially look at credit union people as if they want to come in and sell something to the students. “If you’ve built a relationship they won’t think that,” Browne says. Bear in mind that school officials and staff will have concerns about keeping a lid on their personal information with student tellers. Musette Bracher, vice president of marketing for GECU in El Paso, Texas, reports that some teachers did question whether their account information would be kept secure and confidential at the inschool branch. “But the students working at the branch are regular GECU employees, subject to all our privacy and confidentiality policies and procedures,” says Bracher. “We reiterate our member privacy policies to

Be Sure To Anticipate questions from teachers and school officials about the confidentiality of their account information through the student branch. Explain account access restrictions and describe student training. Give them the option of conducting business with the adult branch supervisor. students each year, and let them know they could face termination if they disclose any sensitive information. The teachers were satisfied when we advised them that we respect their privacy and have coached our employees on the issue.” Obviously another option you want to offer adult members is to conduct their business with the credit union’s onsite adult supervisor.

What works—more than kiddie accounts Stop thinking small: In-school branches are not just kiddie accounts. That’s the message David Gorham, director of student-run credit unions at Apple Federal Credit Union, Fairfax, Va. has for all credit unions. “They can be a big component of your business, depending what you do with them,” he says.

Be Sure To Consider building an internship program into your in-school branch operation as a way to identify and train future entry-level employees. He should know; his credit union has 34 branches, including one especially for special-education students. Two are in middle schools, the rest in high schools. The first opened in 1995, the second in 1998, four more in 2001, and about six a year ever since. News about the program spreads by word of mouth and teachers often approach Gorham. Apple Federal has hired five former student workers as full-time employees over the years, and many part-time ones. About 450 students staff the branches each year and there are thousands of student members. The program took in $1.2 million in deposits and generated more than 2,000 members during the 2006-2007 school year alone. “Many of them still have accounts with us after they leave high school,” Gorham says. Quite a few former youth members are in their 30s, including roughly one-half of the first 30 students who opened accounts at Lee High School in 1995.. Hire student workers as regular employees while they’re still in high school or after they graduate, Gorham advises. He says that there’s no better opportunity to get great employees who are already

familiar with the credit union. Once hired, these students can be a constant source of what is in or on the minds of fellow students, your target market. They can alert you to trends, preferences, and brands that are hot. They’re like having a generational consultant or focus group on staff. How can Apple Federal accommodate so many branches? “The idea is not to make it too elaborate,” says Gorham. “We don’t go in and physically build out a structure. Once we establish the location and content, a launch can typically happen over the summer. We use online banking; there’s no mainframe access at the branches. We do have couriers that go to the schools, but no armored cars—there’s not a lot of cash involved. Students from business courses staff the branches.” The branches all have the same look and feel. “It’s like McDonalds—the materials, the layout and the design are all the same,” Gorham says. “But every branch has special needs and we make concessions all the time. Schools let us know if something needs changing, and we’ll do it if we can. But we don’t do things in terms of policies, money, or equipment for one that we wouldn’t do for others.” Five credit union staff members, along with Gorham and the vice president of business development, are responsible for the branches. “We’re not in every branch when it’s open,” Gorham says. “We have a set number of visits, and a dedicated hotline and e-mail for branches, so we can provide immediate help. When we visit and find a problem, we call and get walked through the fix. If something is broken, we schedule someone to go fix it. We’re part carpenters, IT people, planners, and speakers. I’ve built cabinetry for branches and driven it out in a U-Haul.” Apple Federal’s in-school branches offer deposits and withdrawals, as well as checking accounts and debit cards with

Student-Run In-School Branches

parental consent. High school students can get credit cards with parent cosigners. “We don’t offer those at the middle school level; we don’t want parents to think we’re marketing those to their kids,” says Gorham. The credit union provides financial education in the classrooms, including a budgeting simulation and the PBS educational program “The Secret History of the Credit Card,” and training for student branch workers. Credit unions new to the process have to keep in mind that schools have been running for years without branches. They won’t be interested in the program if you’re difficult to work with, Gorham indicates. “The principal and the teacher are the bosses—it’s not our house.” Of course, it’s a two-way street. “If we don’t have a good relationship with a teacher, we can remove them, and if it means closing a branch, we’ve done that,” says Gor-

Be Sure To Consider more than grades when choosing student volunteers for your in-school branch. Teachers can advise you about students who have the character to be good workers despite not being on the honor roll.

ham. “Certain political situations are untenable. If the teacher’s not interested, or has been assigned by the principal and is doing it against their will, no amount of money in the world buys their attention and we part ways amicably.” It can take credit unions a while to figure that out. “You might fight uphill battles for two years. You can try to have another teacher assigned, but sometimes it’s not possible,” he continues. “It might be better to pull out. That’s the least desirable option for a credit union, but you have to face it at some point.” Teachers’ involvement level and relationships with the students are a big factor in branch success. “It’s



not about the credit union, the material things we provide or the cash incentives,” says Gorham. “In the end, the teacher can inspire the kids to work or not.” (See Sidebar “In-School Branch Success Tips.”) A common mistake credit unions make, he says, is to have unrealistic expectations for the number of members, business and deposits a branch will generate. “Some credit unions call here to ask advice and say, ‘There are 2,000 kids in this school; we should be able to get 500.’ That’s impossible.” It’s important to plan for the future. “If you get one deal with a high school and there are 10 in your county, why are you leaving out other nine?” Gorham asks. “It’s not hard to do except for the first-year outlay of cash. You need to think of it as part of your business plan.” (See Chapter 8.)

How to—go mobile When resources are scarce, credit unions get creative. A few years ago, Central Virginia Federal Credit Union, in Lynchburg, was all set to establish a branch in a local high school. “Everything was approved, but enrollment went up overnight and there was no space for us,” recounts Kim Wilkerson, vice president of marketing. “I don’t take no for an answer very easily. I said, ‘I’ll take a closet, or under the staircase.’ ” She brainstormed with the

In-School Branch Success Tips • Lobby for a teacher who will be an enthusiastic champion of the branch. • Consider all students, including those in special education, as potential workers. • Look for ways to involve students in all aspects of the branch, including design, construction, and advertising. • Respond to operational or facility problems immediately, showing that the branch is your top priority. • Set ambitious goals, but be willing to adjust them if they turn out to be unrealistic.



Be Sure To Be open to unorthodox ideas. In one high school that Dave Gorham approached, special education teachers saw the opportunity to get those students involved with running a branch. It met the school’s inclusion objectives, which called for the principal to involve lower functioning students in mainstream activities. According to Gorham, the branch works the same as the others. The teacher performs the same functions, probably helping the student workers a little more, but there’s no need for added staff. school’s marketing and business students and came up with a novel idea. “We involved the shop students and they built a mobile, rolling branch for us,” she says. “It’s not fancy. It’s probably six feet by four feet, and our IT people helped put a case-locked computer on the side of the unit. You see the monitor on the side, and there are cash and supply drawers. We could have built an extravagant mobile thing, but we wanted the kids to own it.” The students helped create a branch logo, which displays prominently on the unit’s desk. Posters on easels promote products and services. The school was going wireless that year, which meant the branch could set up shop anywhere. “During our regular morning hours we’re in the main lobby, right across from the main office—there’s a lot of visibility when parents and visitors come in,” says Wilkerson. “We can move to the cafeteria at lunch, or go to special events.” Wireless makes it easier, but it would be possible to connect via a phone line, she notes. You also need a storage area. “The business teacher is our sponsor, and she’s wonderful. She has a phone and a supply area for us, where we have a vault and a camera.” Student workers call the credit union’s regular branch, which is

five minutes away, to order cash or ask for assistance. “Typically two students run the mobile branch and two are in the office,” says Wilkerson. The students also teach personal finance classes in the middle school, which gets the eighth graders excited about joining. The high school has just under 800 students, and the credit union’s goal is to enroll up to 30% of them. It already has about 100 members. “This is a great option for schools that don’t have much space,” Wilkerson enthuses. “We’re the only in-school branch in the area, and we didn’t know how it would work, but it’s been very successful. There’s been a lot of buy-in from administrators and teachers, and parents have been active in getting kids signed up.”

How to—train student workers When you’re ready to launch an in-school branch, select and educate student workers. Community Choice Credit Union, Livonia Mich., has five branches in elementary schools. Two are parent-run and two student-run. For the ones run by students, says Jeremy Cybulski, youth program coordinator, “I’ll gather the fourth graders and then the fifth graders in the gym and we talk about the opportunity to work at the credit union.” Most students are familiar with the in-school branches, but not about the employment aspect, he indicates. “We talk about the expectations and compare them to expectations for being a successful student, about how working at the credit union can help with their math,” Cybulski says. (See Sample “Student Branch Training Program Outline.”) He covers how to complete a job application and get teacher

recommendations, outside references, and parental permission. He gives interviewing tips—make eye contact, shake hands, say thank you—and sets a two-week deadline to submit applications. Each applicant receives a letter scheduling an interview, and Cybulski, along with the school’s principal, teachers, parents, and credit union human resources staff,

Be Sure To Have a formal application and selection process, as well as job descriptions, for student branch workers. interview all applicants. “We pair a school person and a parent or professional for each interview so there are different perspectives, and we provide interview questions,” Cybulski says. “It’s a realistic experience, including the possibility that applicants won’t be selected. Most are very mature about realizing that and understand that they’re learning valuable life skills.” Sometimes branch managers participate. “I’ve had them say,

Entry-Level Credit Card iQ Credit Union gives its young members the chance to gain experience using credit under adult supervision. The credit union explains its “beginner’s” credit card to parents by pointing out that it helps show teenagers the rewards of financial intelligence and responsibility. iQ’s Visa program is designed specifically for members 15 to 17 years old. To receive a low-limit, entry-level Visa card with no cosigner, students must have written permission from a parent or guardian to enroll in the program. They then must complete two free financial workshops, which teach them the responsibility of money management and explain not only how credit works, but also how important it is to have a good credit history. iQ’s Yelena Lyashevskiy makes it clear to parents that the Visa card their teenagers receive “will be an individual account only, but there will be an option on the application for the minor to grant permission to the parent/guardian to obtain account information until the youth member is of legal age.” As she points out, the workshops and the entry-level Visa card give students a “real-world working knowledge of daily finances.”

‘I’m hiring this kid in eight years,’” laughs Cybulski. The selected student workers learn to do marketing—to make posters and do in-school announcements, for example—and to act as tellers. They rotate between the two positions. “They get uniforms, name badges, and schedules,” Cybulski explains. “We have a reward voucher system to compensate them—they get a piece of fake money when they work and are responsible for it. If they lose it, we don’t replace it. They can buy small things like a bag of candy or save them for larger rewards like mall gift cards.” Students not selected as workers are invited to come save at the branch, which is open to kindergarten through fifth grade. All it takes to open an account is $10. After that, deposits can be as little as a penny. “For every five deposits they can pick a prize, or save reward stamps and get a $5 or $10 toy store gift card. They get reward stamps for good grades too, and they have a record book to keep track of their savings,” says Cybulski. “The reward system really makes it stick.” On student members’ birthdays, they get to stick a hand in a “Birthday Bonus Bowl” of change and pull out as much as they can. “When kids’ friends hear about this, or when their friends work at the branch, they want to come down and see what it’s all about,” Cybulski says.

Branches on a budget Yelena Lyashevskiy, campus branch coordinator for iQ Credit Union in Vancouver, Wash., reports that her credit union has operated in-school branches since 1995. It currently runs five high school branches, plus one at a job skills center. She says, “The high schools we work with have each set up an accounting or marketing class that we draw our student workers from.

Student-Run In-School Branches

Each student in those classes can apply for one of 30-60 unpaid student staff position at that school’s branch. To be selected, students must have teachers vouch for their characters and clean records. Some of the job titles include branch manager, security coordinator, communications director, and membership officer. Student workers also are eligible to apply and interview for one of the credit union’s halfdozen paid internships. “I oversee all five school branches with the help of school employees—four instructors and three staff assistants—who supervise the branches for about one-and-one-half hours a day. In a nutshell, I create and maintain all financial operations, marketing oversight, summer student training, internship coordination, school and community relationships, leadership training for student branch managers, and other related projects at the credit union.” The following services are available through iQ’s in-school branches: • Deposits, • Withdrawals, • Loan request initiation, • Loan payments, • Check ordering, • Most account file maintenance, • New savings accounts, and • ATM/Visa card ordering. (See Sidebar “Entry-Level Credit Card) In other words, says Lyashevskiy, “everything but money orders, traveler’s checks, cashiers checks, foreign check/currency, and bond issuance or redemption.” Figure 5-2 is a summary of iQ’s average branch operations budget, which does not include capital expenditures. The school branches are online with the main office, and they are assessed for data processing. The school donates space, utilities, and maintenance. Lyashevskiy estimates that the one-time expense of branch startup might range from $30,000 to $50,000—with equipment being the variable that shifts the cost of open-



Fig. 5-2 Annual In-School Branch Budget Operating Expense

Per Branch

Promotional Items










Incentive expense


Public Relations


Supplies Expense Annual Total

$300 $2,950

Source: iQ Credit Union.

ing a branch toward the high end of the spectrum. (See Sidebar “School Branch Cost Considerations.”)

Branch care and feeding A branch requires nurturing, cautions Browne. “You don’t just start one and go off and leave it,” she says. She audits each of her branches monthly. “We count down the cash, just like with regular tellers, and it’s a great opportunity to look around, see how things are going and ask how we can help,” she says. “You get a vibe from the teacher and the students.” One school moved to a new location mid-year, and the in-school branch moved quite far from the assisting teacher’s classroom. “It wasn’t as convenient and she was getting discouraged,” says Browne. “During our audit I talked with her to figure something out. Now we’re inside the cafeteria and it’s an awesome location. We want to stay here.” She talked with the teacher about the following year, suggesting she schedule a class around noon with students who could operate the branch, rather than having students come in on their lunch hours. “We want the teachers to know we support them,” she says. “If you’re not in the branches 64


monthly they’re out of your sight and you think things are just running along,” she adds. “We don’t pay our teachers; they’re taking the project on to help students, so we need to be there.” Her credit union gives $500 per year to each school, presented to the principal and involved teachers. “We want our partnerships to continue and we want them to be school partnerships,” Browne says. “Teachers come and go; there’s more meat to it if your partnership is with the school.” Education goes along with the in-school branch program. Along with a full program of seminars on various topics, “During the first two weeks of school we do training about credit unions and banks, how to write checks, how to use calculators, about our Web site and about accounts they’ve never heard of like IRAs,” says Browne. “Student workers have two days of training on procedures for running the branches.” Michigan Catholic CU, in Troy, Mich., operates studentrun branches in area parochial schools—without busting the budget. Ten are in elementary schools, which in Catholic schools usually include grades K-8. “We started our first elementary branch about seven years ago,” says Rebecca Caron, business development supervisor. “The elementary branches are deposit only. We go into the schools twice a month with laptops, and student tellers—mostly fifth graders—take the deposits.” The tellers rotate positions. “One does the computer transactions, one takes deposit slips and counts cash, and one is a runner who goes to classrooms to let students and teachers know we’re there,” Caron says.

Be Sure To Push for a good location in the school. You want the branch to be near the action, which is usually a cafeteria or other common area.

Most branches operate during the school day, although one or two are open before classes start. “We run monthly contests at the schools,” notes Caron. “Anything we do, the kids latch onto it and have fun with it.” The student-run branch at Bishop Foley High School is open every Friday morning, before classes start. “The student employees—freshman through seniors—are called ‘Foley Financial Professionals,’ and they hold the same positions as in a regular branch, such as CEO,” Caron explains. “They do marketing pieces, and one senior created a commercial break for the school TV station. They’ve come up with excellent ideas for giveaways and contests that work. These are much better ideas than we’d come up with because they’re ‘teenager to teenager’. ”

Be Sure To Fully inform parents from the time you begin planning about the educational purpose of the student-run branch. Openness will go a long way toward gaining their support. Michigan Catholic sets annual membership-penetration goals for each elementary school, and currently has about 20% penetration, on average. “We consider each school a SEG (Select Employee Group), so that’s not bad,” says Caron. “I think it grows a little faster at the elementary level because the parents are still involved and can encourage their students to participate.” Penetration levels change each year as students move on to different schools. “Grade school numbers go down when eighth graders leave, but the high school numbers continue to go up because the students keep their accounts, even if they go to a public high school,” she says. “We’ve seen former elementary members grow up and get auto loans from us.” Caron doesn’t have membership

School Branch Cost Considerations Jean Floyd, senior vice president of branch administration at Neighbors Federal Credit Union in Baton Rouge, La., offers these notes to help you calculate school branch costs: Space • Would the space be free or leased? • Does the space need to be renovated and, if so, what portion would the credit union be responsible for? • Will the space be on the school’s security alarm system or will the credit union provide additional security? Equipment • Does the credit union have equipment (i.e. computers, software, printer, check printer, stools, phone, calculators, shredder, safe, teller pedestals, and miscellaneous office supplies) available or must it purchase new equipment? • Will the credit union be responsible for replacing or installing new wiring? Can current phone lines be used? Security • Will the credit union have separate/additional security monitoring, such as monitored vault,

security cameras and/or bullet-resistant teller stations, if necessary? Employees • Will the credit union use current employees to handle the in-school branch or will they hire someone for that responsibility? • Will the student tellers be paid or are they part of an internship program? Cash • Will an armored car service be used or are other arrangements possible? Marketing • Will the credit union design and produce marketing material or will this project be outsourced? Monthly or recurring costs • Depreciation • Phone/fax line • Security monitoring • Armored car service • Monthly office supplies • Salaries • Insurance bond cost • Software circuit charges

numbers just for the student-run branch, but the credit union has 1,759 high school-age members overall, 24% of whom have debit cards, 15% with checks, and 3% with credit cards. All of the products come with financial education—the credit union delivered 107 presentations in 2007, reaching more than 1,600 youth. “We’ve offered these products longer, but we just started marketing them a year ago. The education piece is where we’re able to set ourselves apart from other financial institutions; some just give kids cards.” The credit union makes a concerted effort to involve parents. “Parents, or even teachers, might question you as to why you’re at their kids’ schools. We hold frequent open houses, and go to other places where we can see and talk to parents, and have a presence,” Caron says. “My experience is that at first they can’t believe we offer credit cards. But as we explain the education we offer, you

can see their attitudes change. They may not sign up their student, but they’re more open to it.” (See Sample “Parental Permission Form.”) She recommends befriending the people at schools who can help and support the credit union’s youth programs when they need it. For its part, Michigan Catholic supports many of the schools financially with

fundraisers, and by donating used computer equipment, or desks and chairs when it remodels. “We offer scholarships each year too,” says Caron. “It’s an all-around relationship; we’re not just there running the branches.” (See Sidebar “Keeping Costs Down.”)

How to—tap the teenage mind Most credit union marketers know how to design eyecatching materials for adults like themselves—they too want to save money, get the best rates, and receive hassle-free, friendly service. But where do we start when we want to advertise to teenagers? We don’t read their magazines or listen to their music, so how can we know what would persuade the adolescent brain to focus on our new youth club or student-run branch? “Communicating with teenagers has always been a challenge,” admits Arlington Virginia Federal’s Browne. (See Chapter 6.) “Today they’ve created a new shorthand for instant messaging and text messaging, which most adults find to be puzzling, at best. Did you know that ‘NMJC’ translates to “not much, just chillin’?” Browne asks. (See Sidebar “InSchool Promotions.”) How do we communicate with

Keeping Costs Down For credit unions just launching their in-school branch programs, Rebecca Caron advises, “Keep an open mind about the end result. It won’t happen quickly—if you’re trying to reach a membership goal, it might take a couple of years.” There’s definitely a cost to the credit union. “We saw a presentation by one credit union that had spent $10,000 or $15,000 on a branch. We spent $700 or $800 on our high school branch,” says Caron. “We’ve changed things from time to time; we used to send flyers home for each student monthly, but it got too expensive. Now we do a quarterly calendar, and we’re in the school newsletter and announcements,” she adds. “At first each school had its own name and credit union logo, but that was very labor intensive. Now they’re all under our youth program brand.” The branch is in an open area outside the high school cafeteria, where it’s very visible. “Some credit unions work out of a closet,” Caron says. “You can do it on a budget if necessary.”

Student-Run In-School Branches



In-School Promotions Advertising within a school is a special challenge. Some tips: 1. Work with students to create promotions. They know what language their classmates will respond to and what will appeal to them. 2. Look for ways a school normally gets its messages out—through newsletters or in-school TV announcements, for instance. 3. Stay in touch with peers who face the same challenges. CUNA’s PF Interactive online network is one place to exchange ideas about student promotions and branch operations. The National Youth Involvement Board network is another. (See Resource List.)

teenagers when we don’t speak (or spell) the same language? When Browne was with Synergy One Federal Credit Union in Manassas, Va., “We serendipitously found one answer,” she says. Several years earlier, the credit union had talked with representatives from Brentsville District High School about setting up an inschool credit union branch. “When talks with the school board stalled, we proposed afterschool workshops on money management topics in partnership with the school’s Future Business Leaders of America (FBLA) Club,” Browne says.



FBLA student officers liked the idea of sponsoring these workshops and immediately took the marketing lead. The students called the programs the “X-treme Money Workshops.” They designed posters in their desktop publishing class and plastered them all over the school. They pitched the workshops personally and made sure that their hungry friends had plenty of food to eat before talking about credit, credit cards, saving, investing, and auto buying. More than 125 students took part in the November, February, and May X-treme Money Workshops. They were so successful that the club took honors in state and national competition for their Partnership with Business Program with the credit union. The teenagers did a remarkable job of peer-to-peer marketing and designing an award-winning entry. As the credit union’s relationship with Brentsville District High School grew, the board of education finally approved a student-run credit union branch. “Knowing what savvy marketers our FBLA partners were, Synergy One Federal’s vice president of marketing, Alison Beckner, asked them

to create radio spots to advertise the ‘Tiger Branch,’ using the school’s PA system during morning announcements,” Browne recalls. Beckner told the students the essential advertising elements they needed to include and asked them to think about radio ads they enjoyed. Working in four-person design groups, students identified their peers’ need for getting money during the school day. Friends who regularly mooched lunch or gas money surfaced as recurring themes. The design groups parlayed these ideas into 30-second ads with catchy phrases and rhymes, mock conversations between friends, and even a clever Tiger Branch rap. When these ads aired as part of the morning announcements, the entire student body instantly learned about the convenience and benefits of the student-run credit union in their school. “There are endless possibilities for fresh ideas guided by the teenagers who work in their studentrun high school branches,” says Browne. Students came up with a unique idea to encourage others to open multiple accounts at the Tiger Branch. They realized the appeal of saving for that all-important rite of passage after high school graduation. Their recommendation: “Beach Week Accounts.” “Now how’s that for tapping into the inner workings of the teenage brain?” Browne asks. Browne uses member penetration to measure success. To set realistic branch goals, every year she meets with involved teachers and students. “I ask them, based on enrollment, ‘What percentage do you think you could reach as new members? Is it 35 a semester?’ I let them think in terms of semesters; it’s not as overwhelming as if they think of the whole year.” The teachers and students usually come up with higher numbers than she thinks they can really achieve, based on past experience,

Talk to Other Credit Unions Fresh out of ideas for promoting your student-run branch? Try using the National Youth Involvement Board’s listserve at to post a question for your peers. If you’re wondering about something, chances are someone has the answer. Here’s one recent example. Noelle Conzelmann, marketing coordinator at Frankenmuth (Mich.) Credit Union, writes: “We recently started our first student branch in a local school. We’re looking for ways to entice students to join the credit union. We’re currently offering: ‘When you open an account with a $10 deposit, Frankenmuth will match your $10,’ but we’re not getting too many bites. Any suggestions?” Heather H. Harris, vice president of community development at Isabella Community Credit Union, Mt. Pleasant, Mich., responds: “What you describe didn’t work for us either. Our first obstacle was perception. Students thought the credit union was a ‘check-cashing store,’ or a credit bureau, and one thought it was a military office trying to get students to sign-up. “Here’s what worked for ICCU: We promoted the fact that parents can deposit (or transfer money in the morning) for student lunches, etc., and that the student can visit the student-run credit union at lunch. Appeal to the parents, then to the students in this case. “We also run ads on Student TV and work closely with (and financially support) student programs, which helps to increase awareness. In this case, the appeal is to the students. “We’ve found a ‘refer a friend program’ is working. We offer the referring member student $5, while covering the first $5 for the new member. “I also gave our student tellers an incentive to open 50 new (active) member accounts by year’s end. I let them pick their prize within a specified budget (they wanted cash, of course). We’re at 35 new accounts since September, and I rewarded them with a Visa Gift Card in early January to keep them focused.”

and she works with them to keep it realistic. “We offer cash incentives to students for hitting their goals, just like at our regular branches,” she says. “We pay students $250 if they achieve their goals, and they can split the cash amongst themselves or have a party or outing, like bowling; whatever they want.” Having control over the incentive money keeps the students focused on working toward it. “We keep track of their progress with spreadsheets, but we encourage them to track it too, to put up a big thermometer or other visual reminder showing how many new members they have, or new services used,” says Browne. In-school branches aren’t money-makers for credit unions, at least in the short term, she indicates. “It’s hard to quantify the return on assets in the beginning,” she says. “But you’re getting new members and new service use when you’re in the schools. It’s the first place young people have accounts. When it’s

time for them to buy a car, you’ll be the first one they’ll think of. And we’re building relationships—most students and their parents have never heard of credit unions when we started out.” (See Sidebar “Talk to Other Credit Unions.”)

Be Sure To Ask students for help in creating branch advertising.

How to—invest in the next generation Michigan First Credit Union, Lathrup Village, Mich., has operated student-run branches for about five or six years. “We’d been looking at our credit union’s demographics, and we were heavily skewed toward the elderly end of the spectrum,” says Michael Poulos, president and CEO. “As a credit union committed to education—we’re formerly Detroit Teachers Credit Union—it seemed

Student-Run In-School Branches

a natural fit to do work in the schools,” he continues. “We’d had a lot of requests from teachers to come into classrooms and speak on financial topics. We decided to take it a step further and start studentrun credit unions, and now we have them in elementary, middle and high schools.” Michigan First’s student-run branch program has grown to 12 elementary and middle schools, and the credit union plans to add 10 more school locations in 2008. During the 2006-2007 school year, the student-run branches generated over $39,000 in student deposits with an additional $2,500 from 160 new accounts opened during the year. The credit union has a branch in one of the school district’s two high schools, and is in the process of opening a branch at the other high school. “We’re also meeting with another school district,” says Poulos. “We’ll go anywhere in our membership area.” Commitment on the schools’ part is essential to the success of student-run branches, he indicates. “Our schools are very eager and committed.” Each in-school branch has a structure like the credit union’s regular branches, with tellers, security guards, marketers, branch managers, and other positions. “We help the school interview and assign kids, and we bring them in for training,” Poulos explains. “Student workers do the transactions right there at their branches,” he adds. “They can open accounts, deposit and withdraw money. We have an employee there while the branches are open to assist the kids.” At elementary and middle schools the student employees are

Be Sure To Give students a variety of ways to participate in the in-school branch, not only as tellers, but also marketers and other roles, as needed.



volunteers. “We pay the high school ones, though,” says Poulos. “During vacations, some of them work at our regular branches. They can do almost everything at the high school as at the regular branches.” The credit union has locked rooms at the high schools, remodeled to resemble and function like regular branches, and sporting Michigan First’s logo and advertising. There’s an ATM at each high school to facilitate withdrawals. “At the elementary level, the branches focus more on deposits to encourage saving, and we limit withdrawals,” Poulos notes The student-run branches don’t pay for themselves, but are an investment in the next generation, he comments. “We get to know the kids and they get to know us. We don’t have a lot of regular branches—just six—although we serve 44 communities.” Poulos deems the student branch program an inexpensive investment. “Each one costs about $25,000 a year, which includes staff time, technology and training



time. The first year is a little more expensive for a branch, especially at the high school level, where we do remodeling. “It’s worth every penny,” he declares. “We don’t blink at all.” Many credit union initiatives aren’t direct money-makers he notes. “It’s hard to put a figure on the value of brand recognition. A lot of people hear about us through our in-school branches, and we’re doing something good for their kids.” The credit union attracts new adult members through the branches as well. “Some school employees and the students’ parents join,” Poulos says. “Some have never been exposed to a credit union before.” Michigan First also has scholarship programs for local high school seniors. “It lets us give back to the community and show we’re an integral supporter of education and the community at large,” says Poulos. “It also gives us a way to get into the schools and talk about our credit union. “If we go to a high school 15 miles from our nearest branch and say we have a scholarship to give, it gets us in the door,” he says. “We might not get in if we just want to talk about doing business with us.”

Elementary school and beyond Credit unions structure their student-run branches to correlate with the students’ maturity levels. Elementary school branches usually encourage students to open savings accounts. Credit union employees supervise all transactions and often rely on teachers to assist with activities. Emphasis is on practical learning, such as through math

You Got That Right A single in-school branch can cost between $700 and $25,000 per year to operate.

exercises based on credit union transactions. BTCU in St. Joseph, Mich., established an in-school branch in 1993 and now has 10 in elementary schools. Each of these is called Students 1st Credit Union plus the name of the school. Lynn Warner, the Students 1st coordinator, explains, “We don’t solicit. Schools approach us. We meet with school personnel and set up a timeline.” She also emphasizes that, by being in the schools, “We remain in the ‘eye’ of our regular members. As a convenience, we make deposits for them and feel this is a good role model for students to see grownups making deposits at the school.” Students help with savings and withdrawals, monthly statements, savings incentives, and Web page activities. At the high school and college level, the majority of in-school branches offer full products and services. Students receive teller training and can progress to be loan officers or managers. Usually students are volunteers, but some are paid to work, especially at the main office during the summer. Many in-school branches are online with the main credit union computer and conduct live transactions. Others aren’t online, but credit union personnel take all transactions to the main office for batch processing each day. Generally, schools require students to complete specific economics or business management courses before working in the branch. Some even give students course credit for work on the job. For example, a career coordinator at Layton High School in Layton, Utah, sends students to Horizon Utah Federal Credit Union for interviews to work in Layton High’s in-school credit union, which opened in January 1999. Selected students receive high school credit for one semester of training at the main office, preparing to work

Be Sure To Give the student branch as much of its own identity as possible. Even if you brand the branch with your existing credit union name and logo, students can help decorate it. And if you can afford to allow students to name the branch, perhaps after the school or school mascot, you’ll encourage maximum participation and a sense of ownership. in the Lancer branch the second semester. Ruth Sweat, in the human resources/training division at Horizon Utah Federal, says, “Layton High came to us; however, we already had thought about establishing an in-school credit union.” Management met with Davis County’s board of education to determine the feasibility of a student branch. After receiving approval, Layton High School and the credit union made arrangements to prepare the branch facility. “Layton High agreed to cover utility costs, advertise to the students, and even funded the construction of the teller counter

that students made in the shop department—it looks great!” says Randy Gailey, Horizon Utah Federal’s CEO. The credit union is responsible for computer equipment, security, and oversight of the students while the branch is open. Overall, the costs of operating the branch are similar to those of a regular branch office without the extra payroll costs for tellers.

What works—a perfect opportunity Credit union branches in schools create a perfect opportunity to teach young people about the importance of money management and real-life employment skills while helping them experience the credit union philosophy. For the past 17 years, CP Federal Credit Union in Jackson, Mich., has been committed to investing in the youth of its community with student credit union branches. The first CP Federal student branch opened in an elementary school in 1991. The program has since grown to include student-operated branches in 41 Jackson-area schools. A full-time staff of eight financial education representatives travels to the schools each day to supervise the student branches. They also educate students from kindergarten through high school on the benefits of credit union membership and employment. “The key element in the success of our growing youth program is the continued support and commitment to student education from the credit union’s upper management and board of directors,” remarks Susan Young, CP Federal’s financial education supervisor. “This program is an investment that’ll provide a stable, lucrative membership base for the credit union in the future.” In today’s schools, the curriculum is more open to programs such as financial literacy and career exploration that will help the students

Student-Run In-School Branches

learn important life skills, indicates Kelly Hatler, financial education specialist at CP Federal. “A student credit union program can tie into that curriculum by teaching students how a financial institution functions, along with important money management topics such as financial goal-setting and the employment skills needed for career exploration,” she says. “This all adds up to something more than money—a sense of self-worth.” In the elementary and middle school levels, each school branch has its own volunteer student staff, which includes branch managers, assistant branch managers, tellers, bookkeepers, and computer operators. All students who are interested in volunteering for one of the positions must fill out a job application and go through an interview. CP Federal chooses its student volunteers based on their applications and input from their teachers. Not all students hired for the positions are on the honor roll. The students who work in the branches experience and develop important social skills, employment skills, positive work ethics, and the satisfaction of a job well done. At the high-school level, volunteers perform all job functions, combining the duties of the elementary and middle-school positions into one job description. Through co-op programs, CP Federal also hires high-school students who actually become fulltime credit union employees after graduation. “Once we’ve hired the student staff, they go through an information-packed training period of three sessions,” Hatler explains. Upon opening, the student branches operate one day a week for approximately one and one-half hours. The

You Got That Right CP Federal opened its first student branch in 1991. During the 2007-08 school year, it operated branches in 41 schools.



students perform all of the tasks needed to calculate deposits, withdrawals, check cashing, and in the high school, loan payments. The credit union provides most of the items used during operations such as cash boxes, calculators, receipt pads, and a laptop computer for posting online transactions. The students are responsible for promoting and advertising the branch within the school by making posters, fliers, and announcements about the services and activities available to members. “Creating your own in-school, student-run credit union branch is relatively easy. Start small and set up just one office to see how it will work for you,” Young suggests. “You can control the growth and number of schools based on your credit union’s staffing and ability to provide the time and resources needed.” CP Federal’s experiences have shown that the elementary schools are a good place to start. “At that age, students seem more receptive and open to learning and participat-

Keys to a Successful Student-Run Branch • Have a solid philosophical commitment from top to bottom. • Make sure everyone understands that it’s a long-range vision—you won’t make money immediately, but you’re developing lifelong, revenue-generating members. • Do a lot of research. Visit other credit unions’ in-school branches and find out how they work. Talk to people listed in CUNA’s online Directory of CUs with In-school Branches. (See Resource List.) • When you have good materials and a good program in place, sell a partnership to schools. • To get in the door at a school, build a relationship with a lead educator. • Sponsor the school’s programs, make your building available for tours, and offer to come into classrooms. • Remember that with that current budget squeeze, schools are eager for business partnerships. • Get in the door with your first program and then prove you can deliver. • Realize that your credibility is on the line and stay committed to it; one successful school branch will feed word-of-mouth advertising to other schools.



ing,” she adds. “You don’t even need to have laptop computers at first. You can always provide written receipts and process the transactions back at your main office.” The credit union’s student branches don’t focus on big dollars. As a matter of fact, the amounts that students should bring to school or take out without a parent’s permission are limited. The idea is to bring the concepts of good saving and spending habits to the young people by giving them hands-on experiences. Students also better understand what a real workplace is like and the teamwork and professional behavior required to make it function. A student branch program should provide hands-on education. “Saving should be a fundamental lesson taught to students of all ages, with the emphasis on fun,” says Hatler. “We offer age-appropriate savings programs and saving challenges at all student branches.” The programs provide incentives for students to participate and learn the important concept of saving. CP Federal’s financial education representatives spend hours in classrooms giving presentations on topics ranging from money management to careers. “We highly endorse and recommend the NEFE High School Financial Planning Program to area educators, and we team teach the program in many of the traditional and alternative high schools,” Hatler says. CP Federal offers many youthoriented products. Some of the savings programs include education, first auto, and first home savings accounts, which all earn a higher dividend rate and other bonuses. Teenage and college-age members also can choose an Independence checking account. One highly successful program is the share draft checking program for upper elementary and middle school-age children. Student members are able to open a checking account and use their checks at school for purchases such as school lunch, books, and school store items. Each

Be Sure To Schedule an open house each fall to introduce the student branch to a new freshman class and its parents. member must attend a checkbook class in order to participate. ATM cards also are available to middle and high school students with a parent’s signature. The sooner you introduce young people to the savings philosophy, the sooner they’ll begin the savings habit. Enthusiastic credit union professionals can best teach personal finance by developing educational partnerships with local community schools. Student-run credit union branches that offer a progressive array of financial services to responsible young members will teach sound money management skills. “And there’s no better way to impress upon them the principle of ‘people helping people’ than to have a credit union branch right down the hall,” says Young. (See Sidebar “Keys to a Successful Student-Run Branch.”)

We all benefit Some in-school credit unions have been in operation for more than 20 years. They’re successful because of a good working partnership with the local school system; the loyalty and commitment of the sponsoring credit union; the enthusiasm and motivation of students, parents, faculty, and staff ; the support of the community; and, best of all, recognition of the rewards of helping students learn and prepare for the future. Credit unions with in-school branches report widespread benefits. Elementary students develop skill with decimals, percents, and other math functions by balancing cash drawers and using calculators. They increase their financial vocabulary and learn money denominations and values. They also learn the rewards of saving money, the importance of accuracy, the credit union philosophy, and the

ence between credit unions and banks. Middle and high school students acquire a basic understanding of financial products and services, insight into personal financial responsibility, and the rewards of saving for short- and long-term goals. They gain practical knowledge of computer applications, on-the-job training for a career, and possible opportunities for part-time and summer work with the sponsoring credit union. The benefits to credit unions of sponsoring in-school branches are numerous, including the opportunity to increase membership, build lifelong relationships with student members and their parents, develop well-trained, experienced future employees, and win recognition from the community. Communities benefit, too, from improvements in the school curriculum, increased awareness of school and business partnerships, and the maturing of youth into financially literate adults. You know where the boys and the girls are who need our assistance to become financially literate credit union members. You can prepare them through in-school branches. And in helping them, you’re helping our credit unions, our communities, and our future.

Resource List Where To Go for More Information • CUNA Online Directory of Credit Unions with In-School Branches—Select Resources for Youth • CUNA PF Interactive (online financial literacy network--register at no charge) • Frontline: Secret History of the Credit Card (DVD)—Search FRL62305 • Michigan Credit Union League’s School Branch Handbook—Select Credit Union School Branch Handbook • National Youth Involvement Board listserv—Select List Serve Credit Union Web sites • Apple Federal Credit Union • Arlington Virginia Federal Credit Union • BTCU • Central Virginia Federal Credit Union • Community Choice Credit Union • CP Federal Credit Union • Frankenmuth Credit Union • GECU • HEW Federal Credit Union • Horizon Utah Federal Credit Union • iQ Credit Union • Michigan Catholic Credit Union • Michigan First Credit Union • Neighbors Federal Credit Union • STAR Credit Union • Synergy One Federal Credit Union

Student-Run In-School Branches




Student-Run Branch Coordinator Job Description The Student-Run Branch (SRB) Coordinator is the school’s primary point of contact. The Coordinator must a credit union employee, however, this is not a full-time responsibility and is in addition to his/her current job description. Below is a list of duties associated with this function. • Supervise, monitor, and participate in the SRB opening and daily operations. • Participate in school functions, such as PTA meetings and Back-to-School nights, to help promote the SRB • Maintain communications between the school and the SRB through regular contact with a school representative. • Set schedule and maintain daily volunteer sign in/out log. • Coordinate and provide training to the SRB staff as needed. • Coordinate monthly SRB cash audits and monitor cash levels as needed. • Coordinate with Marketing to meet SRB marketing needs. • Coordinate transaction processing and new account setup. • Provide to the SRB team monthly status reports, including progress and growth. Source: HEW Federal Credit Union




Credit Union-School Responsibility Overview Credit Union Responsibilities: Training— • All new instructors participate in a minimum 20-hour Campus Branch training program prior to the opening the branch for that school year. This can be done via an externship or another venue. The Credit Union and the school district (negotiated item) may share instructor expenses for the training period. • Instructor and students have a minimum 20-hour training or equivalent provided by the Credit Union. • Branch will not open until instructor has completed the 20-hour Campus Branch training or Credit Union Symitar Basics and Intermediate Symitar. Additional training for instructor will be done by Credit Union Staff on an asneeded basis. Credit Union Staff: First year of Campus Branch Operation — • If there is not a student who is also an employee of the Credit Union, a Credit Union Staff person will be on-site during Campus Branch hours every day for the first month of a new campus branch operation. • If there is a student who is also an employee of the Credit Union, a Credit Union Staff person will be on-site during Campus Branch hours twice a week for the rest of first school year and as special requirements dictate. Succeeding year/s of Campus Branch Operation — • A Credit Union Staff person on-site during Campus Branch hours once a week and as special requirements dictate (assumes instructor returns and at least one returning student). • Credit Union will have telephone support available to Campus Branch when Credit Union Staff person not onsite (via Phone Center or Partner Branch). Equipment and System— • Credit Union Staff will set up and maintain the computer equipment provided by them (see further equipment maintenance issues addressed in ATM Agreement). • Access to the Credit Union system will be blocked by the Credit Union everyday after the branch closes; no access to the Credit Union system will be allowed during weekends or school holidays. • A specific list of equipment provided by the Credit Union will be provided.

Student-Run In-School Branches

School District Responsibilities: • Have a signed Student Agreement for each program participant prior to allowing them in the class (signature of instructor, student and parent/guardian required). • If there is no Credit Union employee in the Campus Branch, the instructor will be in the branch during open hours. • Be sure schedules are developed, posted and communicated to Credit Union and school district personnel and students. • Monitor attendance of students working in campus branch. • Support and enforce work rules (Dress code, Behavior, Absence, and Food and Beverage in the office) as stated in the Student Agreement. • Appropriate discipline of students (according to normal school rules and student agreement with Credit Union). • Support for immediate removal from the program if any privacy or security breaches are committed by a student (see Student Agreement). • Time for instructor to meet with Credit Union personnel (at a minimum three times during the school year) to review branch progress and future plans. • Provide telephone in campus branch. • Encourage instructor attendance at the Credit Union Annual Meeting (held in March or April – approximately 7:00 PM to 9:00 PM). • Actively promote program to potential students each year with the support of scheduling counselors. • Develop a branch schedule to maximize educational experience. • Understand that resources provided to Campus Branch remain property of Credit Union (Procedures Manuals, stamps, forms, brochures). • Security issues concerning the branch are confidential. Only Credit Union staff, the instructor and campus branch students may be involved in knowledge or discussion of confidential information. Source: iQ Credit Union.




Student Branch Training Program Outline Introduction • Goals • Housekeeping • Bank vs. Credit Union 1. Security Student will be able to describe general security procedures. 1.1. Utilize cash and key control procedure 1.2. Summarize robbery procedure 1.3. Summarize bomb threat procedure 2. Conduct Student will be able to demonstrate a professional work ethic. 2.1. Understand information control (confidentiality) policies 2.2. Evaluate professionalism standards 2.3. Adhere to dress code 2.4. Demonstrate effective communication 3. Cash Handling Student will be able to maintain and balance cash drawer. 3.1. Apply cash handling techniques 3.2. Differentiate between counting methods 3.3. Identify parts of a bill 3.4. Identify bait money and explain its purpose 3.5. Set up cash drawer 3.6. Balance cash drawer



4. Teller Routine Student will be able to process teller transactions. 4.1. Recognize Symitar screens and functions 4.2. Memorize transaction codes 4.3. Sequence transaction codes to process teller transactions 4.4. Apply established teller routine 4.5. Distinguish between negotiable and nonnegotiable instruments 5. Member Focused Student will be able to research member account information. 5.1. Understand functions of Account Manager 5.2. Understand functions of Report Generator 5.3. Differentiate between account types 5.4. Summarize disclosure requirements 5.5. Recognize proper address format 6. Vocabulary Student will be able to express understanding of banking terms. 6.1. Define commonly used terms Source: iQ Credit Union.

Sample Parental Permission Form Michigan Catholic Credit Union Parent Acknowledgement Form Recently your son/daughter, , expressed an interest in opening the following type of product/service with Michigan Catholic Credit Union: ‰ Checking Account

‰ MasterMoney™ Debit/ATM Card

‰ VISA® Credit Card

‰ Auto Loan

‰ Certificate of Deposit

‰ Other,

Michigan Catholic Credit Union is committed to educating our youth on the importance of taking control of their finances--what better time than NOW? As your child goes off to college or enters the work force after high school, he/she will be inundated with credit card, loan and checking account offers. Many of these offers are accompanied by great giveaways like a t-shirt or backpack; however, many are also accompanied by lots of fees, high interest rates and no financial education! With every product/service that is opened, our youth members MUST complete a Money Smart Financial Education Course. The Money Smart Courses are offered at any MCCU Branch, either by appointment or walk-in and take about 20 minutes to complete. The courses are delivered by one of our Member Service Representatives. Since your child is still a minor we feel it important to keep you abreast of the types of products/services that your son/daughter would like to open with us. By signing and returning this form you are simply informing MCCU that you are aware and approve. If you have any questions please feel free to contact me at 1-866-669-6228 ext. 1316 Sincerely,

Rebecca D. Caron Business Development Supervisor ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Teen Cents Parent Acknowledgement Form By signing this form I,





, to open the following product(s)/service(s)

son/daughter, at Michigan Catholic Credit Union: ‰ Checking Account

‰ MasterMoney™ Debit/ATM Card

‰ VISA® Credit Card

‰ Auto Loan

‰ Certificate of Deposit

‰ Other,

Parent Signature: X


………………………………………………………………………………………………………………………………… OFFICE USE ONLY: Parent Signature verified by MCCU Employee:

Source: Michigan Catholic Credit Union

Student-Run In-School Branches



Chapter 6

Action Checklist

3 Send the Right Message to Young Members  

Hold focus groups to find out what information, products, and services your members and potential members need. Separate focus group participants by grade, not age.

Create a youth advisory panel to generate and evaluate ideas about new promotions, products, and services.

Time your communications to coincide with young peopleâ&#x20AC;&#x2122;s important life events, such as opening a first savings account, applying for a job, buying a first car, and getting ready for college.

Enlist young members to write your youth newsletter, whether hard copy or online.

Train staff to treat youth respectfully as full members no matter what their ages. Do staff communicate that kids and teenagers are welcome? Does your lobby? Does your Web site?

Involve young members in your annual meeting. Can you assign youth to collect votes, distribute name tags, and handle other visible tasks? Can you lower the voting age for board elections?


Review your credit unionâ&#x20AC;&#x2122;s online access policy for staff. Does it allow staff to stay up to date with Internet and technological developments that affect the ways young people acquire information, communicate with each other and with businesses, and spend and manage money?


Revamp your Web site to include sections especially for young members of various ages. Make your youth pages easy to find on your home page, and keep them fresh and up to date. Remind young members frequently about the online information and entertainment that you have for them.

Familiarize yourself with online applications such as Facebook, MySpace, Second Life, Teen Second Life and other online social networking sites. Consider using podcasts or blogs to communicate with youth. Can your youth advisory panel help keep you informed about how they and their friends are using these and new competing online attractions? Can college interns help you teach other young people, plan advertising, write your newsletter, and develop products for youth?

Modify your strategic plan to reflect the emerging new world, both in its real and virtual incarnations.

Monitor print and online publications for insights into how new and improved technologies might affect financial service delivery.

Model Youth Program Guide Best Practices & Proven Techniques

Chapter 6:

Communicating with Youth Summary Today’s young adults want to build relationships with their financial institutions, so take time to talk to them as youth. Young people don’t want you to speak their language; plain English works fine. They just want you to treat them with respect.

Highlights u If you build trust with young people, they’ll come to you with their financial needs when they’re older. Building relationships with young members will also help build better relationships with their parents.

u Before you can design communications materials, education programs, or products for young people, you have to understand what they need and want to know, and how they’d like it delivered.

u Young people’s needs can evolve rapidly with technological and lifestyle changes, so it’s important to stay in regular contact. For them, the Internet is as necessary as household utilities—so your communications strategy needs a strong electronic component. Young members are comfortable with technology and with communicating electronically, and they love online banking.


potential members. This chapter will consider how to find out what financial information and services young people need. It’ll look at communicating with them via the media they use, and enlisting young people to talk with other youth.

emember the fable of the fox and the stork? Each hosted the other for dinner. The fox served soup in a shallow bowl, from which the stork was unable to drink. The stork returned the favor by serving a meal in a long-necked jar.

How to—talk to young people

Sounds a little like communications between generations, doesn’t it? It might even be a metaphor for how far off adults can be when it comes to guessing what appeals to and benefits youth. As management consultant Randy Harrington says, “To call something a ‘Teen Club’ is the same as saying, ‘We don’t have a clue.’ It’s the equivalent of naming your credit card ‘Middle-aged Visa.’ ” It’s not that young people want you to use their lingo—quite the reverse, in fact. Remember how silly your own parents sounded when they used your “hip” teenage slang? It’s not a good idea to guess what appeals to young members and

Much is being made lately (and once again) about how out of touch adults become when they reach the age of 30. Self-proclaimed youth marketing experts delight in stumping older audiences with definitions of jargon recently popular with a youthful demographic. The implication is that if you’re not fluent in youthful argot, you can’t serve the market. Bunk. Piffle. Rot. Treat members under the age of 18 as you would any other members—with friendly, professional service. Some years ago, the Wisconsin Credit Union League created a terrific 60-second TV ad that told the story of a burly biker prepar-

u A youth advisory panel can be a great help to your credit union as it seeks to attract young members, establish programs for them, and teach them financial literacy.

u Young people can be ambassadors for your credit union, building awareness and bringing in new members.

u More than 56 million players of online games are already in the workplace, and they think differently. The willingness to take risks is a core gamer characteristic, for example, as is the acceptance that failures will occur and that you need to start again. The implication for credit unions is that these attitudes and expectations will directly transfer to the credit union both as an employer and as a provider of financial services.

M O D E L Y O U T H P R O G R A M G U I D E 77

OK, What Should You Call Them? “Everyone deserves respect, no matter how old you are. You risk undermining your youth program with a careless label,” says Isabella Community Credit Union’s Heather H. Harris. “How you refer to young people suggests how you feel about them. In my experience, students in elementary school, grades K through 5, don’t seem to mind being called kids, or even children. Beyond that, it gets tricky.” For many young people, the labels “tween” and “teen” have a patronizing pat-on-the-head connotation. “Youngster” labels you as hopelessly out of touch. And appropriating what they call each other will make you look ridiculous, dude. According to Harris, here are some more-acceptable alternatives: • Student/youth/young person—useful as global terms. • Teenager—traditional, still neutral (“preteenager” has no appeal). • Minor—useful as well, although a bit formal. • Middle school student (schooler)/high school student (schooler)—nonjudgmentally descriptive, best for school-related references. • Adolescent—fine for communications with parents. • Young adult—works for older high school students. Alas, there is no universally accepted term, and often the preferred term varies by region or even by county,” Harris adds. “My suggestion is to ask. Most young people I know prefer ‘student’ or ‘teenager.’ But if they want to name your youth newsletter ‘Teen Something,’ who are you to argue?” Finally, Harris says, remember that most minors yearn for the perceived advantages of being older. This “Golden Age” might be two to three years older for kids in elementary school and up to five years older for high school students. So if you’re trying to appeal to a 12-year-old, use the imagery of those who are 15 or 16. And if you’re reaching out to high school seniors, talk to them in terms of young adults.

ing to apply for a loan by shaving his beard, cutting his hair, removing his jewelry, and trading his denim and leather for a suit. As the nervous applicant waited to meet with a credit union loan officer, the applicant ahead of him—a bearded, shaggy-haired, bejeweled, denimand-leather-clad biker—emerged

Be Sure To Ask young people about their financial goals and dreams. 78


from the loan office smiling and counting his money. Message: The Four Cs of Credit have nothing to do with costume or cant. So how do you talk to the younger generation? Clearly and respectfully. It’s as simple as that. (See Sidebar “OK, What Do You Call Them?”) For concepts such as overdraft, minimum payment, and APR, “plain English” works fine. Just as children and teenagers don’t expect their parents to pierce their navels and wear midriff-exposing tops, they don’t expect financial institution staff to use street lingo. Young members aren’t looking to hang out with you; they’re looking for ways to meet their financial goals. They’re skeptical about slick ads from financial institutions. They want facts and advice. Financial service professionals need to listen carefully before talking about products and spouting “truth and wisdom.” Contrary to popular belief, young people want a relationship with a financial institution. They want more than a credit card or some other financial product. Most are very savvy about the Internet, but also want serious face time with real people at a financial institution. Draw them in with real opportunities to participate—ask their opinions, listen to their goals and dreams, and maybe even let them in on board elections. (See Sidebar “How Old Do Members Have to Be to Vote?)

What works—good oldfashioned conversations Before you can design communications materials or education programs for young people, you have to understand what they want and need to know and how they’d like the information delivered. You also need understand which products and services will appeal to them. To find out what your young

Be Sure To Listen to children and teenagers more than you talk to them. members want, research their particular living and consumer habits. Find out their financial challenges, and design services to meet those needs. You’ll earn their business if you can explain your service benefits and answer their questions. Stay in regular contact, because this market segment’s needs can evolve rapidly with technological and lifestyle changes. One of the best ways to do that, says Rick Foy, director of marketing communications at Sight Creative, St. Paul, Minn., “is good, old-fashioned grassroots public relations— have conversations with young members, and even more important, nonmembers. A professor I know told me that if he lectures for more than 10 minutes, he loses students’ attention. Today’s young people have grown up with sound bites and everything is quick.” You have to ask questions, and focus groups are a great way to do that. “It doesn’t have to be formal or expensive,” says Foy. “Bring in a group of young people for a pizza party and have a good solid discussion. Ask, ‘Are you getting our messages? Do you read our newsletter? What’s important to you?’ ” (See Tips “General Focus Group Techniques.”) “Keep that in mind and make your focus groups engaging; it needs to be a vibrant atmosphere,” he continues. “These are people that get messages all the time—in the middle of a conversation they’ll be calling somebody or sending texts. It’s so important to have a facilitator who can encourage discussion and engage people.” Prizes help too. (See Sample “Teenage Focus Group Questions” and Tips “Focus Groups with Youth/Young Adults.”) Hold separate groups for different age and/or maturity levels.

How Old Do Members Have to Be to Vote? For federally chartered credit unions, Standard Federal Credit Union Bylaws, Article V, Section 7 (April 2006), states, “ Minimum age requirement. Members must be at least ___ years of age by the date of the meeting (or for appointed offices, the date of appointment) in order to vote at meetings of the members, hold elective or appointive office, sign nominating petitions, or sign petitions requesting special meetings. The Credit Union’s board should adopt a resolution inserting an age no greater than 18, or the age of majority under the state law applicable to the credit union, in the blank space.” In other words, the board of your federally chartered credit union can set a minimum voting age equal to the age of majority in your state (usually 18 years old) or younger. And if your board hasn’t set a minimum age requirement, all members are eligible to vote. State-chartered credit unions might have similar guidelines in their bylaws.

“There are a lot of life-cycle changes from birth to age 18—someone in the mid-twenties faces much different pressures than someone who’s 16,” says Foy. “If groups are in similar life stages, you can be more effective in listening and getting messages from participants.” Usually this means grouping them by grade, rather than age. Marketers often fail to consider what communications vehicles resonate with young people. “Ask focus groups what ads stand out in their minds. Or ‘When you watched TV last night, what do you remember? Why do you shop where you shop? Where do you like to get your information?’ ” says Foy. “It’s so important to ask those questions,” he adds. “Credit unions have limited marketing budgets and to spend wisely, you need to know your advertising will be effective. Is it worth investing in billboards if young people don’t look at them? Should you spend a lot of time promoting checks if they prefer debit cards?” Be sure to tell focus group members what you’ll do with the information you gather. “Young people C o m m u n i c a t i n g w i t h Yo u t h

want to be a part of something that will make a difference, and they need to know that you’ll use their input,” Foy says. Afterward, you can follow up in different ways. “A focus group can’t be your only feedback mechanism,” says Foy. “You can follow up with a direct-mail or online survey. Ask what you can do as their financial institution to provide the guidance they need.”

The key events in their lives One of the biggest events in almost every teenager’s life is getting that first set of wheels. This is an excellent time to offer fun, informative seminars on how to buy and finance a car. Send teenage members and their parents a list of mechanics who inspect used cars. Position the credit union as the place to go for help and resources, in addition to a loan, when buying a car. Marketing professionals tell us that other big events deserving special credit union attention are

Be Sure To Consider forming a youth advisory panel that meets regularly to review marketing plans, advertising campaigns, and product proposals intended for young members.

(1) getting college loans, (2) opening initial transaction accounts, including checking and debit card options, and (3) first-time home buying. Include parents and grandparents in youth-program planning. Parents and grandparents want the children in their lives to achieve their dreams and to learn to manage finances skillfully. Encourage them to establish an education fund through savings accounts, education IRAs, and 529 plans. Show them how to help their kids and grandkids finance a car and purchase a home.

It would be surprising if a youth program with a strong parentgrandparent component didn’t lead the adults to be more-active credit union members themselves.

Out of the mouths of babes, preteens, and teenagers Consider a youth advisory panel. Schools and communities nationwide are establishing them, challenging them to offer ideas from preventing vandalism to designing youth activity centers, according to Bonnie Miller, former marketing director for Suncoast Schools Federal Credit Union in Tampa, Fla. “Credit unions can benefit from youth advisory panels,” she says. “What better way to determine the products and services your young members need than by asking them? That way they’ll be sure to feel welcome at your credit union’s table.” A youth advisory panel is typically a group of six to 10 credit union members, from ages 13 to 20, who meet regularly with one or more credit union employee-advisors, who in turn report to management. Panel members discuss their personal financial needs and how the credit union can meet them. They suggest ways to attract young members and encourage them to save. They design financial education seminars and devise ways to lead their peers in community service. Once you’ve decided that a youth advisory panel can be an asset to your credit union, develop a plan to recruit and train them. Publicize your intent to form the youth advisory panel in your print and online member newsletters, statement inserts, and display posters. Explain thoroughly what you intend to accomplish, and emphasize that panel membership is an honor. Prepare a “job description” for panel members. Emphasize that participating can be an excellent extra-curricular activity and addition to a resumé or college application.



Pertinent selection criteria include academic achievement; current use of credit union services; time and transportation; recommendations from peers, teachers, and civic leaders; and involvement in school or community leadership activities. A youth advisory panel can be a great help to your credit union as it seeks to attract young members, establish programs for them, and teach them personal finance. Building relationships with young members also will help to build better relationships with their parents. With competitors vying for your credit union members’ personal financial business, a youth advisory panel can give you a tremendous advantage. Instead of dishing up an unappealing menu of services that young people can’t digest, you’ll serve them better now and as they age because you’ll know precisely what they’re looking for. Be open with young members that this is why you’re asking for their help. (See Sidebar “Panel Design Questions.”)

How to—put it together As a panel adviser, review applications and interview the most promising candidates. As you select members, keep alternates in mind in case someone drops out or has too many schedule conflicts. Send

Panel Design Questions Think carefully about your objectives for a youth panel. What you want from it will determine how it functions, so consider: • What do you expect the panel to discuss? • How many members and what ages will be on your panel? • How long will they serve? • Which credit union employee(s) will supervise the panel? • To whom will the advisor(s) report? • How often will the panel meet and where? • How will you structure panel meetings? • How will you recruit and select panel members?



letters or make personal phone calls inviting the selected members to your first scheduled meeting. Be sure to thank all applicants for their interest and offer to keep their applications for consideration for future panel openings. For your first meeting, have your CEO address the panel and thank its members for their help. Distribute a folder with note pad, pen, and calendar (and other credit union items) to each member. Establish procedures for your meetings, and encourage the participation of all members. Give several examples of the kinds of information you seek from them, such as how they use or might use a checking account. Ask all members to come to the next meeting with questions about the credit union and its youth services and with discussion suggestions. Prepare topics for discussion at subsequent meetings and an agenda for panelists (and coworkers). Take extensive notes and frequently ask whether anyone has a question or needs further explanation. Ensure that everyone has a chance to be heard. Close with refreshments. Schedule each meeting for the same time and place. If the credit union isn’t convenient, consider schools or civic centers where young people like to go. Begin and end on time. Because many youths have various activities at school and part time jobs after school, you may have to invite alternate members or revise your schedule. Prepare each meeting’s report to management while the information is still fresh in your mind. You want to give decision-makers plenty of time to consider panel suggestions or requests before your next meeting. Thorough planning and careful instructions to the youth panel about your expectations and their roles should prevent most problems. Make sure that panel members fully comprehend that their function is to advise, not decide. Promote your youth panel

Be Sure To Enlist advisory panel members in solving your greatest panel challenges: • Consistent participation, • Productive meetings, and • Feedback that addresses the needs of the credit union and its members.

regularly in your print and online publications, in the local media, in the community, and at credit union events. Continually encourage youth panel members to explain their responsibilities and your youth programs to their friends and classmates. (See Checklist “Creating an Effective Youth Advisory Panel.”)

How to—get a youth newsletter without writing it yourself It’s no secret that few things are more pathetic than a grown-up trying to sound or look like a teenager. If you’re being honest, you’ll admit that you rolled your eyes, or worse, when your parents tried to be cool in front of your friends. How could deal with someone who couldn’t possibly understand your sophisticated teenage mind? Guess what? You’re the grownup now, and it’s your teenage members’ who will be rolling their eyes if you tell them to “Open a checking account … it’s the bomb!” Seven years ago Mid-Minnesota Federal Credit Union discovered this. Its youth club was popular and thriving, but it didn’t have the service penetration it wanted with teenagers. “Our credit union’s primary form of communication with them was a newsletter, and we thought it was pretty hip and cool,” recalls Marty Kelly, now with US Federal Credit Union in Burnsville, Minn., who was Mid-Minnesota Federal’s vice president of marketing at the time. “Apparently, however, we were the only ones,” he continues. “Focus

groups repeatedly showed us that teenagers didn’t want to be ‘talked down to,’ yet at the same time many preferred the cartoon antics of the 12-and-under newsletter.” He and Marnie Perfetti, now Mid-Minnesota Federal’s director of marketing and business development, wondered: What to do—dazzle them with big words, or dumb it all down to get more readers? “The answer eluded us, because it seemed that the teenagers themselves didn’t know what they wanted,” says Kelly. “Then inspiration hit. Why not have teenagers do the communicating for us?”

What works—credit for copy Karen Pikula, a teacher at one of the high schools that Mid-Minnesota Federal worked with, had mentioned an ongoing challenge she faced—encouraging students to use their study hall time constructively. Credit union marketing staff promptly proposed a joint venture.

TeenTrax Facts TeenTrax, a full-color newsletter, publishes twice a year in spring and fall. Students assist with article content and writing, as well as with art selection and photography. Though asked, no student has yet risen to the challenge of designing an issue, so a local printer does layout. All participating students (and their parents) sign testimonial releases. The credit union mails the newsletter directly to teenage credit union members and distributes copies at area high schools, where they’re quite popular. “After our premier issue, I sent a small handful of only about 30 to the school,” recalls Perfetti, “They became in-demand to the point that we had to rush a few thousand over immediately.” For other credit unions interested in youth-written newsletters, she says, “Don’t get discouraged. It takes a long time to build a program like this, to get people writing. Teenagers aren’t always the most responsive people on the first try. Keep at them. Empower them through education and let them be creative, with some guidelines.” Rewards don’t hurt either. “We’ve done a few iPod drawings for people who attend our workshops,” says Perfetti. “It’s gone over like crazy.”

C o m m u n i c a t i n g w i t h Yo u t h

The credit union was looking for young minds to craft a newsletter aimed at the teenage demographic, and the study hall offered a slew of students with nothing but idle time on their hands. This was an opportunity to bring credibility to study hall, in both the literal and figurative sense. School administrators, faculty, and students met with credit union marketing staff, printers, and designers to hash out program details. The result: Participants in this project received more than just the opportunity to see their name in print—they also earned one school credit for each semester on the staff. Participation was voluntary. Initially about a dozen students wanted to offer their talents to the publication, which they named TeenTrax. (See Sidebar “TeenTrax Facts.”) More joined with each issue. Perfetti took on the roles of TeenTrax publisher and editor. First, she created a production calendar that met the school’s semester schedule. Perfetti included strict deadlines for copy submissions, changes, approval, designing, printing, and distribution. With this tool, Pikula kept her students on task daily. School budget cuts have eliminated the study hall partnership, but Mid-Minnesota Federal recently started a youth advisory panel to stay in contact with teenagers. Perfetti, along with Sarah Speer, MidMinnesota Federal’s marketing and business development specialist, plans to enlist council members’ help writing TeenTrax articles.

How to—develop newsletter content As TeenTrax co-editors, Perfetti and Speer give students a larger role in determining overall newsletter content. They routinely ask them for article ideas, illustrations, and photographs, all of which carry a specific deadline. The first time, Perfetti was purposely ambiguous.

“I didn’t tell them what they could and couldn’t do, because I didn’t want to limit their creativity,” she recalls, “Ultimately this newsletter had to interest them. I never wanted it to be a reflection of what the credit union marketing department felt was important to this age group.” The result, as expected, was a mixed bag of submissions. “If anything, the students tried too hard to sound like they were working for the credit union. Frankly, some of the best efforts were those in which the authors never mentioned MidMinnesota Federal.” Actually, that was the aim from the start. MidMinnesota Federal’s name appears prominently in TeenTrax, but never excessively. Keeping things in perspective is always important. “A feature article about cool Web sites may list MidMinnesota Federal, but we’re well aware that we don’t have the teenage appeal of, say,,” says Perfetti, “and to even imply that we do is insulting to our audience.” This isn’t to say Mid-Minnesota Federal doesn’t use TeenTrax to promote credit union products and services. Every issue, each participating student is required to submit three or more articles, one of which must address a credit union product or service. Perfetti then determines the appropriate mix of articles, and begins the tricky process of improving the students’ written words. Editing is a challenge when you don’t speak the language of today’s youth. Even Perfetti, who was 26 when the newsletter launched, has a tendency to feel “old” when



Be Sure To Consider a youth ambassador program to take advantage of the credibility of peer-topeer word-of-mouth transfer of your credit union’s message. meeting with the students. “Editing TeenTrax is unlike any other marketing piece. If something isn’t clear, you can’t just barge in and make dramatic changes. Be willing to make concessions, or you may alter an article so much that it’s unappealing to its audience.” One key element of TeenTrax is giving credit where it is due. Every article has a byline (first name

only), along with each participating student’s picture. “Our teenage staff is what makes us unique,” says Perfetti, “and we make sure that’s evident throughout each issue of TeenTrax.” (See Sample “TeenageWritten Newsletter.”)

Peer-to-peer credibility A+ Federal Credit Union, Austin, Texas, uses high school interns to work in its branches—and to advertise the credit union to peers. “Our student-run branch is in a new high school building,” says Dawn Ambuehl-Sadek, member educa-

College Students: The Voice of Authority Information can be a lot more credible and palatable to young people if it’s coming from someone their own age—or slighter older. Marquis Murphy, youth programs coordinator at Joplin, Mo.-based Great Plains Federal Credit Union, and founder/director of the Youth Educational Empowerment Program, has found a way to tap the tendency of young people to look up to those a few years older. And in the process, he discovered a great way to stretch staff resources. “What I hear most from credit unions and other organizations is that they don’t have the time, staff, or resources to go to the high schools and give consistent presentations,” Murphy says. “Neither do we,” he adds. “But we do have a solution.” His organization has developed a program called the Youth Financial Intern Cooperative (YFIC). Through YFIC, college student interns conduct financial classes in high schools. Using the NEFE High School Financial Planning Program® (HSFPP), the interns give quality presentations that teach high school students about the world of financial management. In 2007, the program was taught in six schools, and some of its lessons have been added to the schools’ U.S. history courses. College interns make particularly good instructors because they are only a few years removed from high school. They can relate to most of the issues that high-school students face and generally speak their language. Their pursuit of higher education many times can inspire younger students to further their educations. “We train all interns before going into the classroom,” Murphy says. “Each of their presentations consists of four parts: Opening, lesson, activity, and summary.” To open, interns give students an overview of the day’s lesson, often using their personal experiences as an example. Interns base the lesson that follows on the HSFPP student guide, which is straightforward and teenager-friendly. The highlight of the lessons are the games and activities that enable students to apply the information they’ve learned. One popular example is called the “Last Person Standing.” In it, the intern has everyone stand and chooses participants at random. Each must say the first word that comes to mind about money or a related subject. Each participant who stumbles or repeats has to sit down until there is only one person standing. Activities like these bring excitement by getting all students actively involved. To summarize, the interns review the day’s lesson to reinforce the material studied. The YFIC program is growing daily, with more and more requests for class presentations. Most important, young people are getting the financial knowledge they need. “Through our presentation we challenge participants to set goals and we empower them to accomplish them,” says Murphy. “All without draining credit union’s staff resources.”



tion specialist. “It’s a full branch just like our others, but it’s a little more colorful and youth-friendly.” To get the word out about the branch, the credit union has its interns sit at cafeteria tables during lunch. “They pass out goodies and brochures, talk about the credit union, and hopefully get people interested,” Ambuehl-Sadek says. At school registration, the “Rattler Roundup,” interns also talk about the credit union. “It’s very useful to have them talk to the students,” she says. “They have more credibility than older people would.” The interns are trained like any other employee and can cross-sell products, although they don’t do loan counseling. They complete the regular employee orientation, receive teller training, and learn about the Symitar processing system. Their pay scale is the same as for regular employees with similar experience. Stella Contreras, the credit union’s senior member services counselor, teaches the interns to be ambassadors for A+ Federal. “This past month, we had a couple of individual coaching sessions to prepare them to conduct presentations on credit union products,” she says. “They introduced our refer-a-friend promotion as well as the Start-Up Certificate during their economics and math classes.” The approach makes complete sense, she says. “Peer-to-peer education has been a tremendous boost in many ways. Students really listen to the interns, they know them, they relate to them.” The interns were an incredible help in getting the word out during the Rattler Round-up. “That month alone we opened 27 memberships,” Contreras adds. The presentations built awareness and brought in new members, but that’s not all. “The interns increased their confidence in speaking to a group of their peers,” says Contreras. “We all know how important it is to develop in this

You Got That Right By 2007, one-half of all U.S. youth between the ages of 12 and 17 used online social network sites such as MySpace5. area. (See Sidebar “College Students: The Voice of Authority.”)

Plugged in from birth The Internet was born before your youth members were. They’ve grown up with cell phones … now there are iPods, Blackberries … who knows what’s next? Young members are comfortable with technology and with communicating electronically, and love online banking. That means your communication and service delivery strategies need a strong electronic component. Let’s look at the trends. Back in the prehistoric days of 1997, only 22% of 3-to-17-yearolds had Internet access at home. By 2003, three of four homes had a computer and online access was available to 63% of children aged 3 to 171. In 2000, the U.S. Postal Service (USPS) delivered 207.8 billion pieces of paper mail2. Estimates that same year of the number of e-mail messages transmitted ranged as high as four trillion. At the time, email was already essential to almost three-quarters of Internet users, and other uses of the Internet were essential to one-half3. By 2007, eight of 10 U.S. residents used computers at home, school, or work. Nearly eight of 10 owned computers and used the Internet and seven of 10 used e-mail. Six of 10 Americans owned cell phones in 2000, vs. eight of 10 in 20074. More than one-half of all online U.S. youths ages 12 to 17 used online social networking sites5. The Internet is even decreasing the amount of time young people spend watching TV. U.S. 15-to24-year-olds are spending most of their total media time (more than 20%) online, more than watching C o m m u n i c a t i n g w i t h Yo u t h

television, listening to the radio or listening to their MP3 players. Nearly one-quarter watch less conventional TV with an almost identical number saying that they spend more time watching video on the Internet on such sites as YouTube, Yahoo! and MySpace, or streamed replays of prime time shows on TV network Web sites6. The trends were already well entrenched by the end of the 20th century. The numbers will only go up, not down. The only real point of dispute is the pace of acceleration. Is it any wonder the USPS partners with CheckFree to offer eBillPay? Even a nickel hike a year in the price of a postage stamp won’t save Ben Franklin’s beloved and beleaguered post office without major changes.

MySpace—and yours Michelle Sample, business development/marketing analyst at Virginia Beach (Va.) Schools Federal Credit Union teaches financial education classes in schools. She always asks if students have questions, and she also invites them to contact her online, at the credit union’s MySpace page, if they’re not comfortable speaking up in class. “It’s an atmosphere they’re comfortable with, where they’re not being judged,” says Amy Wisilosky, vice president of marketing. “Michelle’s in her early twenties, and relates very well to young people. After just a couple of months, she has one girl who contacts her frequently.” The student became an online “MySpace friend” after a school visit. “She was getting ready to graduate and wanted to build her credit record,” Sample recalls. “She didn’t know where to start, and I told her a credit card would work well. I searched for cards that might be the best for her—ours or other financial institutions’. She went with us, and put money down to secure the card so she wouldn’t need a cosigner. I held her hand through

it, and she contacts me all the time with questions to make sure she’s on the right track.” Anyone can view the credit union’s main MySpace page, but to interact, young people have to request to be a friend. They set their own pages to “private” so that no one else can access them. “I’m protecting the kids who are my friends,” says Sample. “They’re as young as 14, and I want to be sure they’re protected from just anyone talking to them.” The site is designed to appeal to young people. “There’s a beach background that fits with our theme, and I put up things like a credit union vs. bank video that’s a parody of the Mac vs. PC commercial,” Michelle explains. “It’s funny and they’ll get a kick out of it. There’s music they can relate to and I change it periodically.” There

You Got That Right • MySpace has more than 70,000 unique visitors per month viewing more than 650 pages each, with almost 25 visits per visitor, on average. • Facebook has almost 28,000 unique visitors a month viewing more than 500 pages per visit, with almost 20 visits per visitor7. • Almost 80% of MySpace users list their ages as under 408. are also links to financial education resources. Wisilosky notes that young people distrust places where they can’t register their own opinions or where they’re censored. “One person put up a comment that they don’t like the credit union because we wouldn’t let them do something, and that’s OK. “We don’t have anything specific about our credit union on the main page,” she continues. “There’s a link if they’re interested, but we’re not using it as a portal or promotional tool. It’s a safe place kids can ask questions and get unbiased answers. Parents and teachers are more comfortable that way, if they



Be Sure To Monitor how Internet and technological developments are changing the ways that young people communicate, interact, and consume. Look for how these changes will affect your credit union’s policies and ability to adapt financial services to satisfy the needs of those on either side of age 18. see that we’re not trying to push things on the kids.” Because the credit union is in the midst of a system conversion, it hasn’t yet advertised the MySpace page. “We’d need restricted access so all employees wouldn’t be out there surfing around—most credit unions block MySpace,” Wisilosky says. “After the conversion we’ll do that, and then Michelle can be on it all day, and I’ll encourage that.” Then Virginia Beach Schools Federal will launch a “Visit our MySpace” campaign promoting its page. (See Resource List.) The credit union’s CEO realizes that the site won’t appeal to boomers, but supports the initiative. “She knows this is what kids are into, and we need to go where they are and do what they’re doing,” Wisilosky says. “We’re really excited about it; it’s great that our senior leadership accepts it even though it’s a little edgy,” she adds. “We have to acknowledge that demographic and build trust so they come to us when they’re older.” If your board or senior leadership are reluctant to use MySpace or Facebook, Wisilosky suggests showing them the number of page views your Web site gets, compared to the social networking sites, or one like YouTube. If your management is concerned that all employees will be surfing the sites, explain that you can allow only certain people access. “Your Web site is for old people. Your Web site can’t compete with the networking sites. That’s the best argument that you have to be out there with a network,” she says. 84


“It’s the way young people access information—it’s where they are.” (See Sample “Credit Union MySpace Page.”)

Minors online What does this mean for you and the younger people in your member households? Consider this view from eMarketer, an aggregator of published, publicly available information and research: “This burgeoning new generation is seen by many to be at the vanguard of the Internet. Today’s online kids and teenagers don’t see going online as a mere diversion; rather, many see it as a critical component of their future.” Sure, we all know that teenagers

Be Sure To Include content for kids and teenagers on your Web site, trying to balance ageappropriate information about money with entertaining interactive features that communicate your interest in them as members. Keep it fresh and up to date.

like to instant message each other. They also like to play games, download music and videos, and even go online to research and get information. But generally the youngest Americans judge the Internet by its entertainment value, right? Oh, but if only that were so. When young people say the Internet is critical to them there’s a generous amount of evidence to back them up. More than half of 15 to 24-year-olds use the Internet to do homework9. With 93% of teenagers aged 12 to 17 online10, your credit union’s Web site will need content that is not only entertaining and informative, but also makes it clear that you respect and welcome them. Although white and upperincome households predominantly comprise the world of kids and teenagers online, ethnic minori-

ties represent the fastest growing segments in terms of percentage increases. More blacks between the ages of 18 and 24 are online than their white counterparts11. The Internet is no longer a useful but optional toy available to a select few. It has become almost as ubiquitous as fixed-line telephones, gas, water, and electrical utilities, says The Economist magazine. And the magazine defines a utility as a service so reliable it’s only noticed when it doesn’t work.

Satisfaction and trust Granted, the financial activities of children and teenagers on the Internet are limited. Online banking or opening their own brokerage account is not likely to be high on the list of things kids and teenagers want to do when online. Industry analysts such as eMarketer and the TowerGroup believe that as today’s online teenagers become tomorrow’s online adults they will become major consumers of online financial services. Online minors still living at home swing tremendous weight when it comes to the household purchase of electronics. An online survey of high school and college students reveals that students play a greater role than parents in deciding to purchase a wide range of electronic products12. Depending upon the product or service—Internet access, computers and peripherals, software, cell phones, digital cameras—one-half to three-quarters of students report that they are the primary decision-maker in their households. They are much more comfortable than many adults with all electronics, thus weigh in on every purchase. Sixteen-to-22-year-olds are four times more likely than

You Got That Right 63% of teenagers aged 12 to 17 own cell phones14.

You got That Right Key 2007 measures of the online behavior of teenagers aged 12 to 17: • 93% are online. • 64% have created online content, and are more likely to be girls. • 55% have created social profiles on network site such as Facebook, and again, girls are more likely. • 39% share artistic creations such as artwork, photos, stories, or videos online. • 28% have created their own blogs, or online journals, and 49% read others’ blogs. • 38% bought something online, down five percentage points from 200415 . other investors to use an Internetonly brokerage13. This is most likely due to the greater faith younger people have in technology and their greater level of comfort with online transactions. Common sense indicates that the more Internet experience minors accumulate, the greater will be their use of the Internet for financial purposes. Kids and teenagers generally are even more comfortable with Internet activities than their parents. It’s not much of a stretch to acknowledge the need to make kids and teenagers a significant component of your credit union’s long-range Internet strategy. Don’t pander. Don’t condescend. Recognize children and teenagers for what they are—a booming market of seasoned Internet users with increasingly sophisticated expectations of service. They’re your members and your future.

“My father never wore blue jeans” Although technology may be changing at an accelerating rate today, and our young members might be more adept than we are at using some of it … there’s nothing new about one generation eclipsing the next. “My father never wore blue jeans C o m m u n i c a t i n g w i t h Yo u t h

and I can’t recall my grandfather ever without a tie,” says Mark Condon, senior vice president of CUNA Research and Advisory Services— clearly a boomer. By the time baby boomers made their entrance at the end of World War II, the formality of years past was already on the floor, he notes. John F. Kennedy seldom wore a hat—and the men’s hat-wear industry crashed. Baby boomers crushed formal wear once and for all beneath their heels. Baby boomers like to believe they’re at the center of everything, Condon says. “Our central conceit is that our sheer size and mass drives societal change and technological innovation. We believe we’re more influential than any generation that preceded us, and that we’ll be a very tough act to follow.” But the boomers are no different than their parents or any generation that lived before whose time is growing short. The young always push the old aside, remaking culture and values in their own image. The only question from one generation to the next is the speed at which the usurpers take control.

manners, and treat authority with contempt. So the ongoing conflict between generations is nothing new. Consider, as a case in point, the world of gamers. These are the “kids” who spend their lives playing one video or online game after another. “It’s easy—too easy—to dismiss the increasing influence that gamers have on the way we live, work, and play,” Condon says. “We stereotype them as nothing more than obsessive and compulsive teenagers and gawky geeks.” But most boomers have no better understanding of gamers or their intelligence, abilities, and drive than their parents had regarding their cultural mores.

Meet your masters Each generation’s new technologies are the ever-more powerful fuel that drives the engines of change. “The child is father of the man,” wrote the poet William Wordsworth two centuries ago. Adults draw upon childhood experiences to interpret and master the challenges of life and nature as they age. Wordsworth’s musings today compose a more immediate and tangible truth for boomers. “Those who trail us are driving change at an even faster and unprecedented rate, influencing our politics, public institutions, and any and all businesses, including those that provide financial services. Our children have become, literally, our teachers and, perhaps, our masters,” says Condon. Socrates wrote that children are tyrants. They love luxury, have bad

John Beck and Mitchell Wade, authors of the business book, “Got Game: How the Gamer Generation Is Reshaping Business Forever,” have a far better understanding of the importance of the gamer generation. Beck and Wade claim that the only real issue when comparing the young to the old (or aging) is whether the behavior of the young changes the world in any way that really matters. That, they argue, is exactly what gamers are doing now. More than fifty-six million gamers are already in the workplace. They work everywhere, from the basement mailroom to the executive suite on



Be Sure To Monitor developments in online gaming, virtual worlds, and communications technology that appeal to youth, and look for implications for your credit union’s ability to serve young members in the future. the top floor. Millions more are still at home. This generation learns differently. They think differently. They work, play, and relate differently. Their attitudes and expectations can differ significantly from ours. What one central factor accounts for these differences? According to Beck and Wade, it’s simple: They’ve grown up with video and online games.

What gamers know No one will dispute that gaming is a massively large business, or that the Sonys and Microsofts of the world touch just about every household and workplace, whether it’s through a Playstation, Wii, or Xbox game or a virtual-world game played over the Internet. Just about any parent can tell stories of their children disappearing into the bowels of the house or back bedroom to play video games until they’re forced to surface for air. But otherwise, we dismiss gaming as a nuisance—something that interferes with family dinners and homework. At a higher level, we may admit to a vague concern that our child will lose the skills to interact socially or that he or she will fail when confronted with real-life challenges as adults. But Beck and Wade claim we’re missing the point. Yes, gaming can be addictive, and like any addictive experience the consequences can be bad. Some studies of online gamers reveal that as many as two of 10 consider the virtual world to be their home and physical world is “earth”—just a place to visit. “Cyber widows” is a relatively new term for people, usually female, whose personal relationships and marriages have been destroyed 86


by a partner, usually male, who is obsessed with gaming. But the majority of gamers are “normal” people, and they’re demonstrating that gaming also has positive effects that can benefit society and business. The willingness to take risks, for example, is a core gamer characteristic, as is the acceptance that failures will occur and that you need to start again. Obviously, failure within a game in no way equates with failure in life. But why is a lesson learned by gaming any less valuable than a lesson learned the traditional way in a classroom with a business professor or through the latest book from this year’s favorite business guru? The rewards of risk taking can also differ between gamer and boomer. Here’s what Beck and Ward have to say about the collapse of the dot.coms and the different generational reactions: “To a baby boomer from the professional classes, (financial) life is supposed to bring both security and rising wealth. God or Adam Smith or Louis Rukeyser set it up that way. No matter what we boomers might

You Got That Right Millions of people participate in Second Life, an online world that allows users to construct virtual objects that they sell for “Linden Dollars,” virtual money that is itself often traded for U.S. dollars. In 2008, Edward Castronova estimated the value of this kind of “currency exchange” to be $1 billion per year16. say about understanding the risks, we know that ordinary companies are not supposed to crash and burn. That kind of failure is only for dramatic exceptions, not for our employers or our investments. But to the game generation, risk is real and natural. It includes extreme consequences. And it is the inevitable, acceptable price of seeking any success worth the name.”

Avatars and assets The implication for credit unions is that these attitudes and expectations will directly transfer to the credit union both as an employer and as a provider of financial services. Edward Castronova, an economist at California State University, has taken the study of gamers further with a narrow but even deeper analysis of the economic consequences of gaming. Specifically, Castronova looks beyond the external economics of gaming to the internal economics within the games themselves, particularly the virtual-world games played over the Internet. While an obscure figure to mainstream businesses, Castronova is well known among the gaming industry, especially among the major game developers and manufacturers. His academic white papers reveal that the population of virtual-world gamers has grown by millions since the earliest games were created in the mid 1990s. These players create avatars or virtual representatives of themselves. Also within the game are biots, or characters such as merchants and monsters programmed and controlled by a game’s software. Avatars interact with each other visually and orally using chat features. And they interact with the biots, whose scripts are programmed by a game’s developer. Each of these virtual worlds builds its own economy including the production of goods and services, and the ability to accumulate wealth by the collection of assets with varying values. Avatars can buy (or steal) from biots, and trade among the players is common and increasingly sophisticated. Trade is of particular interest to Castronova because virtualworld economies have crossed over to the real world, and he wonders as they grow in size what their real world, macroeconomic impact will be. On any given day, for example, you can find thousands of

Virtual Credit Unions The popular online world Second Life has created a special youth-only area. Billed as an “international gathering place for teens 13-17,” Teen Second Life (TSL) has the potential to attract millions of inhabitants who wish to interact through electronic alter egos known as avatars. True to the wildly creative artificial environment, these avatars are often as extravagantly outfitted as comic book mutants. As is the case with the adult virtual world, TSL presents visitors with the tools to explore a simulated 3-D terrain, converse with anyone they encounter, build objects and structures, and earn and spend virtual currency. Similarly, TSL residents also will undoubtedly interact with each other and their unreal environment in ways that the world’s creators hadn’t imagined. Adult access to TSL is restricted. However, what goes on there can have profound implications for real-world institutions, which adults tend to assume will continue to be the center of the social and economic universe. The true power of virtual worlds lies in the ability of inhabitants to apply the rules and the tools at hand to create new opportunities. In Second Life, adults have constructed a virtual economy that includes currency trading in virtual “Linden dollars” and real U.S. dollars. Some Second Life residents have generated real profits across the border between the physical and online worlds. What might be the teenage equivalent of that unforeseen innovation? Stay tuned. Credit unions are experimenting with Second Life to assess its potential to attract and serve members of Generation Y. As reported in CUNA’s News Now, several members of Filene i3, the Filene Research Institute’s innovation incubator, are working to build a credit union island and a financial simulation game in Second Life. The Second Life project is “an attempt to create a place that makes financial education more accessible and fun for young people,” says Denise Gabel, chief innovation officer for Filene. “We want to explore the virtual environment to discover its potential for credit union growth. It’s really no different from the analysis that goes into a credit union’s decision for brick-and-mortar expansion. Well, except that the bricks have no physical dimension. But young people are already there in large numbers, and if credit unions want to be part of their lives in the future, they may have to enter this new world. Filene’s Second Life project is a trailblazing effort,” she says. The i3 team is collaborating with Ohio University students on the project, which is scheduled for rollout in phases. (Phase I was completed in July 2008.) The experiment will test the potential for creating credit union learning centers. There, members—through the actions of their avatars—can learn from virtual financial decisions made with virtual currency without real-life consequences. From that starting point, as with Second Life itself, credit union island might take on a life of its own, perhaps leading to virtual financial service delivery. Phase II will build on the first phase and continue to develop the technology and the opportunity for credit unions. Who knows? Someday soon your avatar might be approving a loan for a winged Vulcan using nothing but electrons and your imagination.

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world gamers buying and selling items on eBay—items that have no real-world presence and exist only within a game, for example, weapons, tools, armor, or clothing for avatars. Even a virtual-world’s currency can be purchased in the real world, creating in effect an exchange rate between the U.S. dollar and a virtual currency usable only within the game. Once a buyer and seller strike a deal on price, payment—or the exchange of value—generally occurs using eBay’s PayPal technology. The buyer is then directed to a location within the virtual world—a bazaar or marketplace—where the item is exchanged between avatars. (See Sidebar “Virtual Credit Unions.”)

Your future in their hands “Okay, this is pretty new stuff and the long-range impact on society, admittedly, is mostly speculative,” Condon says. Castronova devotes hundreds of pages to economic analytics, but even he admits it’s tough to predict what will happen if this kind of behavior becomes more widespread. Beck and Wade, on the other hand, treat the influence of gamers on business from a much more practical and thus predictable standpoint. The younger generation ultimately wins, they say. To recognize that simple principle, just track marketing and advertising trends over the years—trends that often presage inevitable changes in corporate culture and societal values. When you measure the effect of technology on our lives by years or decades, the pace can seem immeasurably slow and you’ll underestimate the impact. But when you measure change by your own experiences or those of people you’ve known and loved, the pace appears exceedingly quick and the impact is more visible. You can clearly see why customs change, values evolve, and the business landscape is lit-



Resource List

Where To Go for More Information • Exodus to the Virtual World, Edward Castronova (January 07, 2008 podcast) y2008/Castronovavirtual.mp3 • Filene Research Institute (i3 Projects) • Googolplex (online periodical for elementary-, middle-, and high school students)—Search “googolplex” • Guides to Independence (online personal finance curriculum)—Search “guides” • National Youth Involvement Board • Teens and Social Media, Pew Internet & American Life Project, 2007. Social_Media_ Final.pdf • Teen Second Life Credit Union Web sites • Belvoir Federal Credit Union • Belvoir Credit Union Student Branches MySpace page • Great Plains Federal Credit Union • Mid-Minnesota Federal Credit Union • US Federal Credit Union • Virginia Beach Schools Federal Credit Union • Virginia Beach Schools Federal Credit Union MySpace page



tered with the skeletal remains of once successful enterprises that failed to adapt. The gamers’ generation will change business by their nature and their experience, according to Beck and Wade. Sooner or later, they warn, we will all live in the game generation’s culture. “The first step towards taking advantage of this evolution is to understand it,” says Condon. “Good luck.”

Implications for your credit union Don’t underestimate the untapped power of software and technology to change how we communicate, learn, and expect to do business. What world did you grow up in and how has it changed? Did you hone your keyboard skills on an electric typewriter at a desk or a laptop in an aisle seat? Was your first phone connected to the wall or a cell phone you answer in your car? Did you discover new music on a transistor radio or with tunes you can download 24/7 on your computer, cell, or personal player? Take the changes you’ve witnessed in your lifetime and project them into the future. Then consider how the pace of invention tends to accelerate over time. The world that your teenage members will inherit will certainly be vastly different from the one around you now. To ensure that your credit union stays in business, you’ll have to stay on top of the unforeseeable changes that will affect the way our economy works and the ways that consumers choose to manage— or mismanage—their financial resources. Take steps to ensure that your credit union remains in position to act in response to changing times: • Examine your staff online access policy. Allow employees to be knowledgeable about young people’s latest online preferences

and behaviors, so that your Web site can remain appealing and useful to them. • Familiarize yourself with online applications such as Facebook, Second Life, and Teen Second Life. Ask your youth advisory panel to keep staff informed about how they and their friends are using these and new competing online attractions. Periodically sit down with young members for a tour of their favorite online sites. Use this information to develop new products and advertising campaigns, and to enhance your credit union’s Web site. • Monitor print and online publications for insights into how new and improved technologies might affect financial service delivery. • Modify your strategic plan to reflect your credit union’s intention to function in the emerging new world, both in its real and virtual incarnations.


General Focus Group Techniques What are focus groups? • A qualitative research method to obtain in-depth information on a specific topic through a discussion group atmosphere • To probe and identify opinions and underlying thoughts • Particularly effective in providing background information as to why consumers think, feel or behave the way they do Methodology • Discussion is led by a trained professional moderator • Usually 6 to 10 participants (recruit 8 for 6 to show) • Participants are always provided a monetary incentive to attend • 1½ to 2 hours in length • Use of a relatively open-ended discussion outline (i.e., moderator guide) • Usually audiotaped; sometimes videotaped • Held in a professional focus group facility with one-way mirrors for clients to view groups from outside the room • Provide food/snack & beverages • Generally 4 to 8 groups per research project; minimum of two • Groups to be homogeneous (e.g., similar in age, interests, lifestage, etc.) • Recruit; confirm; remind Moderator’s guide • Broad to narrow in scope • Set ground rules; disclose viewers and taping • Introductions • Warm-up • In-depth discussion • Wrap-up • Thanks and presentation of gratuities


Focus Groups with Youth/Young Adults Special considerations • Parental permission is required for minors; provide full disclosure; assure safety • Choose a facility with experience recruiting youth/young adults • This age group wants to share their opinions • Offer a $50 incentive • Shorter in length—60 to 75 minutes • Small group sizes—six maximum • Use interventions: raising hands, flip charting, secret voting, sorting pictures, making collages, word association, worksheets, responding to visuals, etc. • Watch for non-verbal responses • Watch for group dynamics (e.g., quiet or dominant personalities) Especially for youth • Recruit by grade, not age • Divide groups by gender • Avoid those younger than 3rd grade • Select high-energy times like early morning or after school • Provide a separate area for parents to wait (with refreshments) Especially for teens/young adults • No more than 2-3 year age span per group • Show unconditional positive regard in order to maintain rapport • Express sincere and genuine interest • Be non-judgmental about the opinions they express • Avoid conflicts with after-school practices and part-time jobs • Let them use their language, but avoid doing so yourself Source: CUNA Market Research.

Role of clients/observers • Stay out of sight • Quietly watch and observe (in the dark!) • Remain as objective as possible…negative feedback is good feedback Source: CUNA Market Research.

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Teenage Focus Group Questions Here are the types of questions that you might ask. As the group develops its own personality, the conversation might follow its own path. You might ask questions in a different order, depending on discussion flow. Demographics • First name • Grade • Whether have checking account, savings account, credit card, check card, investments. (if it seems inappropriate to ask this at beginning, can ask as conversational opportunity arises later) Money background • How do you earn money? • Who has a job? • Where else do you get money? Allowance, gifts, chores for neighbors, etc? • What do you do with your income? Do you save your money? • How much—what percentage—do you save? • Are you saving for something specific? What? • What motives you to save money? • What keeps you from saving money? • What do you spend your money on? • What are your financial goals for the next couple of months? The next year? After that? Money management • What money management tools do you use? How do you use them? • Who has a savings account? • Checking account? • Check/debit card? • Credit card? • Do you have a budget? • How is it working? • What kinds of fixed expenses do you have? • What kinds of variable expenses do you have? • What surprised you about keeping a budget?



Money knowledge • Where did you learn how to manage money? Was it effective? • Home/parents? • School? • Financial institution? • Online? • How would you like to learn more about money in the future? • Do you think you are a smart money manager? Why or why not? What would help? Financial institutions • How did you decide where to open your savings/ checking accounts? • I’m sure you did research to find the best iPod deal and other stuff you buy. Did you do any research on selecting a financial institution? What did you do? • What’s important to you? • Hours? Location? • Online options? Service? • Products just for people like you? • How would you like to learn about new financial products and services? • Email? Mail? Ads? • Letters to parents? • How do you describe good service? • What do you like about advertising aimed at you? What do you dislike? • What would tempt you to leave your current financial institution? (i.e. poor service, better rates somewhere else, feel more at home somewhere else, etc.) • Is anyone familiar with check cashing stores or payday lenders? Willing to share your (or family) experience? • Who is a member of a credit union? Why are you a member? Do you also use a bank? • What would it take to get you to join a credit union?


3 Creating an Effective Youth Advisory Panel  

Sell the idea within the credit union of soliciting input from young members through a formal, standing youth advisory panel. What are some examples of information that you can obtain only by engaging youth on a regular basis? How will the panel support the credit union’s overall youth program goals? What do you expect the panel to accomplish?

or has too many schedule conflicts. Send letters or make personal phone calls inviting the selected members to your first scheduled meeting. Be sure to thank all applicants for their interest and offer to keep their applications for consideration for future panel openings.

Decide the panel’s structure and procedures. How many members will the panel include? What ages will be represented? How long will terms of service be? How often will the panel meet and where? How will you structure panel meetings? What leadership roles are there? Determine staff roles and responsibilities. Who will advise the panel, oversee communications and meetings, and report to management and the credit union board. What is the reporting frequency and procedure? How can credit union board members request topics for the youth panel to consider? Create a job description for panel members. Pertinent criteria include academic achievement; current use of credit union services; time and transportation; recommendations from peers, teachers, and civic leaders; and involvement in school or community leadership activities. What should panelists know about their roles? What commitment will you require? Will you compensate them in some way? How can participation help panelists achieve personal goals and ambitions? Publicize your intent to form the youth advisory panel in your print and online communications. Explain thoroughly what you intend to accomplish, and emphasize that panel participation can be an excellent addition to a resumé or college application.

 Review applications and interview the

most promising candidates. Keep alternates in mind in case someone drops out

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Prepare for the first meeting:

Invite your CEO to address the panel at its first meeting to thank the members and give examples of the kinds of information you are seeking from them.

Take extensive notes and frequently ask whether anyone has a question or needs further explanation.

Ensure that everyone has a chance to be heard.


Close with refreshments. Prepare each meeting’s report to management while the information is still fresh.

Prepare your own topics for discussion at subsequent meetings, incorporating panelists’ suggestions. How will you gather suggestions? How will you ensure that future meetings contribute to the credit union’s goals and strategic plan?

Make panel members responsible for ensuring that their participation is consistent, their meetings are productive, and their input is relevant to the needs of the credit union and its members. What research, reporting, and other tasks are individual panelists willing to undertake to make the panel more effective?

Continually encourage youth panel members to explain their responsibilities and your youth programs to their friends and classmates. What opportunities are there to feature individual panel members and the group’s accomplishments in credit union publications, in the local media, and at credit union or community events?



Sample Teenage-Written Newsletter

Source: Mid-Minnesota Federal Credit Union.



Sample Credit Union MySpace Site

Source: Belvoir Federal Credit Union.

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Chapter 7

Action Checklist:

3 Serve Youth on the Outside 


Meet with community organizations and local governments to determine what financial education and programs underserved youth need.

Attend PTA meetings and other school or community events to engage parents and get their support. Can you identify and ally with a leader within the target community who can help you win over the population?

Partner with community organizations that young people know and trust. Can you recruit current and former members of underserved youth populations to help engage and educate their peers?

Design interactive educational programs to meet the needs of the youth group. Who will you ask to provide a â&#x20AC;&#x153;reality checkâ&#x20AC;? to ensure that your educational materials are relevant to the target audience?

Invite parents to your educational programs. Include programs that will


teach young children from low-income families a savings habit. Can members who are current or former teachers help you educate this group?

Consider working within your local credit union chapter to share resources and strengthen your respective youth programs.

Maintain a long-term focus, realizing that it takes time for youth programs to show results.

Find ways to measure effectiveness to get and keep board support. What changes can you document in youth deposits? In eligibility for and use of services? (See Chapter 9.)

Seek maximum news media exposure to attract further support within the community.

Model Youth Program Guide Best Practices & Proven Techniques

Chapter 7:

Youth Outside the Mainstream Summary Teaching young people living in poverty, those with troubled family backgrounds, recent immigrants, and other populations outside the mainstream can require unique approaches. To reach them and turn their lives around will call for special educators— thick-skinned and tireless—who can connect with the “parallel universe” because they know it firsthand.

Highlights u Learning to save and manage money can get young people out of poverty for life. It’s important to engage the community and understand its needs before developing your programs, so that you meet those needs.

u Serving students who come from families under stress because of money problems can be particularly challenging. Many of these young people don’t have any positive role models when it comes to financial responsibility. And because many low-income people associate money with negative emotions, many would rather avoid any talk about it.

u The key to serving Hispanic people is to earn their trust. Be sincere and willing to meet with them.

u Understand that to engage one Hispanic child often can open the door to the whole family.

u Schools need help in teaching youth outside the mainstream about money. Partnering with trusted community organizations and recruiting educators from within young peoples’ communities helps. Credit unions can also pool their resources to serve these populations.


hat time do we get out?” asks one teenager. Others talk on cell phones; some wear hats; some are crunching potato chips; others sleep! Many look unkempt, and one 17-year-old sucks her thumb.

That’s the situation financial literacy instructor Patricia Davis faced recently when she taught innercity youths 17 to 20 years old who would soon be leaving the foster care system. “I had to ask students to remove their hats, remain awake, turn off the cell phones, stop eating, and pay attention,” she says. “These students came from all walks of life with all levels of education. Some only read at the elementary school level.” Talk about your teaching challenges! “It was by far the toughest audience I’ve experienced,” says Davis, managing principal of Maryland-based Davis Financial Services. “These students brought me face-to-face with the world in which they lived—one that Star Trek fans refer to as a ‘parallel universe.’ Their world, which operated alongside mine but was undeniably different, was one I was

ill-equipped to understand and unable to believe.” There are many such parallel universes in the U.S., and their inhabitants are in urgent need of financial education. Sure, you can find sloppy, inattentive, disrespectful students in any school. But when those attributes pale in comparison to the bleakness of students’ lives because of such realities as poverty, discrimination, and street crime, that’s when personal finance instruction becomes especially challenging and even more important. Giving skills and hope to young people living in poverty, those with troubled family backgrounds, recent immigrants, and other populations outside the mainstream can require unique approaches. That’s the focus of this chapter: reaching and teaching underserved youth who live outside the mainstream economy. (See Sidebar “Teaching the World’s Toughest Audience.”)

How to help—plant & nurture a seed Joe Cummins believes that helping underserved youth save money is one of the best ways to influence their lives. And his credit union does it on a shoestring budget.

Challenges Underserved Youth Present • Social Service overload. Low-income families tend to deal with so many organizations, it can be difficult trusting another organization telling them what to do. • The mindset of instant gratification belittles the benefits of long-term saving. • Stress of money problems at home, and lack of role models for saving can make the topic of money difficult to see in a hopeful way. • Focus in school on test scores, which are not helpful for dealing with daily crises. • Suspicion of outside organizations trying to “help”. • Chaotic and unstructured environment at home creating poor performance at school.



Teaching the World’s Toughest Audience Patricia Davis taught five classes of five different foster-care groups of young people. These teenagers were about to set out on their own. Many had been taken care of by the foster-care system for most of their short lives. They’d developed coping mechanisms and behavior patterns that allowed them to exist comfortably in their universe. But that meant they were lost in the real world. During the budgeting lesson, for example, Davis gave hypothetical examples of expenses that most of us see as commonplace. The majority of the students’ responses showed that they expected to continue to be cared for by some “system” after they left foster care. Because Davis’s seminar was required, students had no choice but to attend. Most of them had no information about the course. They were told they had to show up. Like many of their high school peers, many of Davis’s students were tired, hungry, playful, disinterested, resentful, disrespectful, inattentive, and had somewhere else they would rather have been. What she found distinctive about them was the degree to which their expectations about life on their own—where they would live and the amount of money they would earn (especially given their educational levels)—were unrealistic. “My challenge was to try to get these youth to care about and understand the concept of financial literacy,” Davis explains. “It was a sad state of affairs that, collectively, they were unmotivated, unchallenged, and uninterested in adapting to life outside the social welfare system.” When Davis mentioned rent, they talked about Section 8 housing rents that could be as low as $1 a month. Food would be “free” because of food stamps. Child care—and many were parents despite their young ages—would be provided by a nonworking family member, often the father. There would be no cell phone bill because they could buy a $140 chip on the street that provided unlimited access for life. Cable boxes also could be had—for a price—and everybody had a “hookup.” And so it went. “I struggled with what I could say,” Davis says. “What examples could I give to help them realize that soon they would have to stand on their own financially?” She listed examples of individuals who had struggled through financially difficult times but who had succeeded. She even included a segment called, “Witticisms from old folk that still ring true.” Many of us grew up with sayings such as “money doesn’t grow on trees.” It helped us understand both the responsibility and the requirement to provide for ourselves. “In response, I got snickering, rolled eyes, and laughter,” Davis laments. “It seemed clear that I wasn’t reaching these students. My attempts at teaching financial literacy seemed to be wasted.” She was wrong. At the request of her social service client, she administered both a course pre-test and a course post-test to get a sense of whether the students had actually learned anything. In every class, the post-test results were higher than those from the pre-test. Amazingly, the results from the most difficult class were the highest of all—an improvement of almost 25%. Clearly, although the students seemed uninterested and continually misbehaved, most had absorbed something. It just wasn’t cool to let on that they had. In reality, many of them did learn valuable information that would help them better navigate some of life’s financial speed bumps in the real world. But teaching these helpless young people will require extraordinary efforts. “I was an intruder, from ‘another time, another place, another universe’ trying to blend two worlds destined to clash,” Davis says. Unfortunately, this group will neither disappear nor succeed on its own. With poverty levels rising and social service cutbacks increasing, the ranks of young, unrealistic underachievers will grow. To reach them and turn their lives around will call for special educators—thick-skinned and tireless—who can connect with the parallel universe because they’ve witnessed it firsthand. “We must recruit these former insiders and give them the resources to save today’s and tomorrow’s generations of neglected youth,” says Davis.

With a Master’s degree in counseling and a long history working with low-income families, he’s the community development educator at Alternatives Federal Credit Union in Ithaca, N.Y. Alternatives Federal is a Community Development Credit Union (CDCU), where 70% of its members have low incomes, according to federal guidelines1. “We had a member who just got out of prison, owed back child support and wanted an auto loan,” says Cummins. “We worked with him to pay off the child support and fix his credit. It took years before he got the loan but he was grateful and proud of his accomplishment. He then started speaking to young people on probation about the importance of having good credit. Our small-business department also helps people find ways to use their skills to get out of poverty.” The credit union has seven inschool branches, from elementary to high school. “Our goal is to get students to save weekly,” Cummins says. “We have to plant the seed. Many adults I speak with always seem to remember if they had a savings program in school. Meanwhile, adults in our money management class wish they had learned to save when they were young. So we responded by offering a savings program in our local schools.” The idea of weekly saving in elementary school occurred when one of Alternatives Federal’s tellers told Cummins that Thursday was skating day at school and her son needed his skating money. “It occurred to me that children need a savings day so the whole family knows that saving is a priority,” he says. “We even replaced the term ‘banking’ with ‘saving’ since the word ‘banking’ has no meaning to children.”

What works—in-school savings programs At Alternatives Federal’s four elementary branches, teachers and



Be Sure To Encourage children to save—any amount— weekly. PTA members volunteer to help fifth graders who are trained as tellers. Each school has a designated area where the credit union opens each week (like the gym or cafeteria). Students make their deposits in the morning before school starts. The fifth-grade tellers count money and help fill out deposit slips for other students. Adult volunteers check all the slips and money, and place them in night-drop envelopes that Cummins picks up later. A parent recently told him it’s the best thing she does with the PTA. “A student can come in with a penny and make a deposit,” he says. “We don’t distinguish between saving a lot or a little; we just want them to develop a habit of saving. Otherwise, they learn to save occasionally, like when they get money from birthdays or holidays. Then, as adults, they only think to save when they have extra money, which ends up being rarely. “The reason starting early pays off is that when young children are able to handle money themselves they understand it’s a privilege and they take it seriously. When parents control the money, children learn they don’t need to think about it unless they want something. Our program empowers children to make decisions about money on a regular basis,” continues Cummins. “Sometimes people ask, ‘why do elementary students need to handle money?’ We discovered that elementary students understand that managing money is a real responsibility,” he adds. “One parent mentioned that his son knows the school is full of ‘fake’ responsibilities, by which he meant responsibilities created solely for the sake of ‘learning responsibility.’ So, he rarely gets up for school. But on credit union days, he gets himself up. Since he’s a teller, he

knows he has to be there on time and that other kids depend on him. Handling money is a real responsibility and he is willing to change his behavior for that privilege. “One eight-year-old girl bought a pair of Crocs (shoes) with the money she saved at school and takes better care of them than other possessions,” he recalls. “Her mother told me how proud she was that her daughter was able to do this on her own. Parents appreciate that this lesson can happen at school without their having to run another errand to the credit union.” Alternatives Federal has an account called a ‘Saver’s Club,’ which is a one-year share certificate that students can add to at any time.

Be Sure To Get to know and enlist the help of any school staff person, especially one who knows the low-income families, such as the school social worker. “Opening these accounts for elementary students had an unexpected result—students started to make two deposits each week, one to their regular savings account and one to their Saver’s Club,” Cummins explains. “Some of them called it their ‘college fund,’ so here’s a nine year-old who knows she has to save for college.” Alternatives Federal found that changes in students’ behavior helped persuade school officials, teachers, and parents of the program’s value. “Occasionally, we get questioned by a few parents who think children will feel bad if they don’t have as much money to save as other children,” says Cummins. “Interestingly, this comment has never come from a low-income parent. Contrary to what adults fear, it’s the child with a handful of pennies that is so much more excited to save than a kid with a $20 bill. I see this over and over, and have yet to see a kid teased. As far as the children are concerned, they’re all

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saving! “One school social worker puts it this way: ‘The fact that they get to participate is what matters to them, not the amount of money.’ One kid brings in 10 cents every week, and gets to stand in line just like the other kids,” Cummins adds. “You know if that kid felt bad about having 10 cents, he’d stop coming.” What you see around you is what will appear important, Cummins indicates. “When I walk through schools, I often see soda and candy machines, lockers and blank walls. Now, in the elementary schools, children are seeing credit union signs and hearing announcements to join, deposit, and save. It becomes an important part of their school culture.”

The high school challenge Cummins wants to expand the elementary programs because they’re inexpensive and easy, once he gets volunteers and the school on board. “The kids want to participate and elementary schools have more flexibility,” he says. The middle and high schools are already so structured with curriculum that there’s not much time for money management. Though these schools are happy to have school branches, it’s difficult to find teachers with time to participate. “I started to notice that after about sixth grade, students were becoming more interested in mimicking the identities of high school students. It was very difficult to interest them in saving because they’ve already learned they need an identity to be ‘cool,’ and identities often cost money,” says Cummins. “Another skill this age group has mastered is getting what they want, usually through manipulation. So they don’t need to save; they already have ways to get what they want, which coincides with their need for instant gratification.” He noticed a major difference between the attitudes of teenagers



Be Sure To Assign one person to consistently represent the credit union at school so that the students learn to know and trust that individual. who have savings accounts and those who don’t. “The ones who do tend to be more curious about money and want to learn more, where the ones who don’t have developed an identity around being ‘broke’, which they consider ‘cool.’” Alternatives Federal’s middle and high school branches are simple, featuring folding tables, laptop computers, and cash boxes set up in the hallways. “I’m trying to create a program that credit unions with few resources can use,” says Cummins. “I’ve spoken to other credit unions that can afford to build a branch right into the school and hire a branch manager with a $20,000 marketing budget. You bet I could get more underserved teenagers involved with those kinds of resources!” Cummins trains student volunteers as tellers. “We allow teenagers to process withdrawals and transfers, and cash checks,” he says. “We want students to be



comfortable handling money and managing transactions.” He encourages students to use debit cards, checking accounts, small loans, and credit cards with adult cosigners. “But it’s very difficult to get parents to cosign for their children,” he says. “The parents have often been burdened with debt themselves and don’t want their kids to have credit cards. I explain that if their child makes mistakes now, it’s cheap. If they wait until their 20s, their mistakes will cost a lot more. Teenagers don’t enjoy coming to sit in my office if they’ve had an overdraft. They know they can lose account privileges easily and will think twice next time.” At one alternative school, which runs from grades six to 12, Cummins has a credit union class that meets twice a week. Students learn about the history of CDCUs and why they’re important for low-income communities. The students are trained as tellers and help run the credit union at school, usually creating contests to get other students to save money. The student volunteers also learn life skills. “I’ve had volunteers who wouldn’t speak in front of people when they started, who

end up speaking at national conferences,” says Cummins. After a trip to New Orleans, where students volunteered in the seventh ward, one of the parents thanked Cummins and told him their son was “a different kid.” He adds, “Our program has high standards because if a student is not making an effort to support the group, they’ll be asked to leave. The students and I have to learn to work together as a group so we can help our larger community.” Being an outsider in the schools is another challenge. “Students don’t know me when I’m only there once a week,” Cummins says. “That’s why I need the schools’ support. If I find one teacher who’s interested, she or he can get 30 kids to participate. Without help, it’s difficult.”

Stress at home adds difficulty Serving students who come from families with a lot of stress around money can be particularly challenging, he notes. Since they associate money with negative emotions, many would rather avoid any talk about it. “I opened a branch in a vocational school because a teacher there really wanted his students to learn to save before they graduated.” Cummins says. “When I mentioned ‘money’ and ‘saving’, these kids physically reacted to me. I could tell right away they didn’t want anything to do with money. To them, money means fights and arguments.” When he talked to a senior at the vocational school about how much money he could save over time, the student responded that he would rather find and sell firewood to get money. “Saving was a foreign concept to him and it didn’t make sense to have to wait,” Cummins says. “If he had a savings habit when he was in

Steps to a Savings Habit at School • Involve parents—enlist the PTA for volunteers to help supervise student tellers or offer financial education classes for parents and students in schools. • Make saving a part of the school culture with signs and announcements. • Encourage weekly saving no matter how small. • Start early – get elementary school students involved. • Offer incentives for saving, like a pizza party for the class with the most participation (not the most money). • Offer incentives for getting friends to deposit. • Pay high school students to run their school credit union. • Find people in the community to promote the program. Use an after-school program or community center that the students know. • Offer Youth IDA accounts to fund higher education or other activities students want.

elementary school, it would never occur to him to resist this idea. It would just be part of his life. “I realized that not only did these students need a savings habit, but they also needed a safe place to save,” he continues. “That’s why I started introducing saving in the elementary schools. Even if money is scary at home, at school it can be safe. You even have grown-ups modeling positive emotions around money and supporting the students’ efforts, no matter how small.” (See Sidebar “Steps to a Savings Habit at School.”)

What works—reaching Hispanic Youth Musette Bracher, vice president of marketing for GECU in El Paso, Texas, sees members who struggle to get by on their incomes, and the credit union helps out with loans when possible. “It makes for very loyal members,” she says. “Because of the relationships we’ve developed with them, when times get tough, they make sure GECU gets paid even if other creditors don’t.” GECU, with $1.3 billion in assets and 276,000 members, is designated as serving low-income members. It has 40,000 members with annual household incomes below $15,000

and 80,000 members at $29,000 or below. The community is more than 80% Hispanic, and Bracher believes the credit union’s membership reflects that. Five percent of members are age 10 or under and 10% are between 11 and 20 years old. “Maybe it’s unique to the Hispanic culture, but the whole family becomes and stays members. Mom or dad brings each kid in to join, and when they grow up, they take their kids,” she says. “It’s a great opportunity to start them out right while they’re young, before they get the credit card solicitation onslaught. Otherwise they’ll sign up, and before they know it they’re in trouble. You end up with great members for life. They remember that you helped them, they grow up and became profitable members, and they don’t leave you.” Bracher’s primary advice for other credit unions serving Hispanic and lower-income members is to develop relationships with them and earn their trust. “They tend to have bad vibes about financial institutions. Credit unions in Mexico were the bad guys for a while, and there’s still a lot of distrust.” Be sincere and willing to meet with them, and understand they’ll probably bring the whole family, she adds. “They don’t want to be treated specially, with their own branch, they just want you to pay attention to them and hear what they need. If you provide what they need and don’t sell them the flavor of the day, they’ll be there for you. On Saturdays our lobby is crowded with families—including grandpas and grandmas and kids—it’s almost like a social event.” GECU also delivers financial education seminars in schools, and many students transfer the information they’ve picked up through

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Be Sure To Engage the extended Hispanic family in supporting children’s efforts to set goals and save money.

GECU’s financial education seminars to their parents. “I don’t know if the challenges are unique to our membership demographic, but we see, with the up-and-coming generation, an even greater lack of education about all things financial,” says Bracher. “The kids are very curious and aren’t afraid to ask questions, and they explain things to their parents. Hispanic-American youth, especially recent immigrants, also face challenges in navigating the financial services system. Other minority populations face similar challenges, and credit union youth programs can improve their lives and make lifelong members of them too. (See Sidebar “The Plight of the New Americans.”)

Be Sure To Anticipate the need to define financial jargon that you take for granted, such as “CD” and “ATM.”

A full range of education GECU provides a good example. The credit union has offered youth accounts since the 1990s, and has 23,000 current youth accounts now. It works in partnership with an area CUSO, El Paso Affordable Housing, to offer financial education and services—the CUSO is very involved in educating along with GECU, which offers the financial services. GECU has three youth programs. The Triker program is for the youngest children, and focuses on helping parents teach them to save. “We give them a pamphlet that talks about how to teach their kids, and a piggy bank with their savings accounts. I just saw a kid in the lobby with one today,” says Bracher. Children can join the Biker program at age six, where they get “Best of Adventures in Savings” activity books and information about online services. The Hiker program is for teenagers. Sixteen-year-olds



The Plight of the New Americans José came to the United States about three years ago for many of the same reasons as the immigrants before him and the millions who will follow. A laborer earning a modest, but honest wage, José wants to give his three children a better childhood than he had. Like any other parent, José wants his children to never have to worry about school supplies or their next meal. The American Dream is very much in José’s sight. He’s determined to succeed because his children’s futures are at stake. Chances are that you know José or someone like him. More than one in 10 U.S. residents are Hispanic, and that number is expected to grow to almost two in ten, or 48 million people, by 20102. Unfortunately, Hispanic households’ median income is two-thirds that of Caucasians households’. Hispanics’ net worth is less than 10 cents for every dollar of Caucasians’ wealth. And just under half of Hispanic households own homes, compared with three-fourths of Caucasian households3. Nearly a third of U.S. Hispanics under age 18 are living below the poverty level4. “I believe there’s a connection between these statistics and the way Hispanics deal with money,” says Dick Ensweiler, Texas Credit Union League CEO and former CUNA chairman. An estimated 8.5 to 20.4 million Hispanic people in the U.S. don’t have direct relationships with mainstream financial institutions5. “By and large, Hispanics don’t have bank accounts because of mistrust, lack of experience, language barriers, and fear of immigration status,” Ensweiler says. “Their priorities are more basic needs, such as finding work and a place to live.” About one of five Hispanics lives in poverty. Hispanics represent roughly one-fourth of all people living in poverty in the U.S. And Hispanic net worth is ten times less when compared to non-Hispanic whites6. “The credit union movement must take a proactive role in educating Hispanic and other immigrant communities about financial matters,” says Ensweiler. “We must turn them away from the more costly transaction-based service providers, such as check cashers, payday lenders, and pawn shops. We must attract them to credit unions, where they have the opportunity to build wealth. Serving immigrant Americans will require a long-term commitment. To be successful we need to build a strong presence in their communities. We need to offer them financial education, low service fees, and more affordable mortgages and remittance services. “I encourage all credit unions to help bridge the gap of wealth disparity that exists between recent immigrants and those of us whose families arrived in the U.S. generations ago,” Ensweiler says. “The futures of José, his children, and the credit union movement depend on it.”

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are eligible for youth checking accounts, and receive “Guide to Money” handbooks. They can also apply for a Family Account MasterCard. “The parents are the primary cardholders and they can allocate a portion of their credit line to their dependents,” Bracher says. “The kids get their own cards and statements and can use them to establish credit. When they turn 18, the accounts can become their own. It’s a great way to introduce responsible credit.” She’s found that the terminology used with these young people matters. “A couple of years ago we had a Smart Savers CD that only required $50 for a 12-month certificate, and then they could deposit $10 any time. We didn’t know why young people weren’t taking advantage of it,” says Bracher. “We researched and found they didn’t know what a CD was.” GECU changed the program’s name to the No Excuse Savers Club. “We explained it as a 12-month savings account, where we hold on to the money so they’re not tempted to take it out. Now it’s a phenomenal success,” she says. “We have a series of humorous marketing pieces as to why it’s hard to keep your money in savings. The growth rate has doubled, I think, and we’ve even been successful in capturing some tax refunds.” GECU has had a student-run high school branch for 15 months. “It’s a fairly new school in a very low-income underserved area,” she says. “It’s staffed by students who are also part-time credit union employees. They go through the regular application and interview process and we treat them the same as other employees.” The branch offers savings, checking and loans, has an ATM, and is open to teachers and school staff as well as students. There’s a kiosk where members can use online services and it’s open from 11:30 to 4:30 Monday through Friday.

Bracher finds that understanding credit is young people’s biggest educational need. “They don’t have a clue. They don’t know what a credit score is, and what it means to have a card and not get in trouble. They’re savvy about debit cards, but not great about balancing their accounts.” They don’t write checks, so GECU teaches them to use the online system. “It’s a real teaching opportunity—they no longer have a paper tool for balancing, so they go to an ATM and get cash and their balance, and they think that’s what they have left,” Bracher says. “If they’re more knowledgeable, they’ll mentally deduct other transactions they know they’ve made. It makes you shudder.” She says the credit union is gaining parents as members through the youth programs. “When we hold budgeting seminars at the high school, a lot of parents come. They’re not embarrassed or intimidated. We held about 100 seminars last year, and we’re beefing it up this year.”

Community Savings Challenge GECU has achieved great visibility and success with a unique Savings Challenge program. “It’s a reality-style program where six families compete over a year’s time to see who comes closest to savings and debt-reduction goals,” says Bracher. “We have coaches for them at the credit union, and we visit them every month to monitor their progress. We produce monthly video vignettes—30-minute ones for TV, and two- or three-minute ones for our Web site.” The videos show the financial temptations the families face and the things they have to give up, but also that they can succeed. GECU’s educators show the videos at seminars, and it’s sparked an increase in attendance, Bracher notes. “People

like to see that real families can set goals and meet them.” The families talk about how they use coupons and other savings measures. “They’re normal, everyday people, with different education levels and incomes, facing the things everyone does in this economy,” says Bracher. GECU chose an English-speaking and a Hispanic family as winners. Last year’s English-speaking winner, headed by a single mother, was the lowest-income family. “It was a real testament to the discipline on her part and her positive attitude,” Bracher says. “She had a teenage daughter and a 10-year-old daughter who knew they had to help, and save the family money.” The winning families got $10,000. “We wanted to make it worth their while, because we’re in the house at least once a month, the newspaper did monthly articles on their progress—they shared their laundry if you will—they didn’t have a lot of privacy,” says Bracher. “They said winning the money was nice, but most had saved over $10,000 during the year anyway. They appreciated the power they had to control their finances instead of their finances controlling them.”

Persistence required Cummins is trying to set up after-school programs at community centers, but it’s been difficult. “I thought they’d be great for my programs because the families trust the staff, but we’re still having trouble getting parents to sign their children up. I know parents are stressed out about money, work several jobs to make ends meet, and have children to take of. There is no time to think about long-term financial lessons. They feel they don’t have any money to save now, so how can their children save?” You have to be persistent, he says, and keep trying different things. “We’re now looking for a grant to fund matched savings ac-

counts for young children, like an Individual Development Account (IDA). An IDA is a savings account in which government or private sector funds match eligible individual deposits to encourage saving for higher education, a business, or a first home. Because schools are cutting enrichment programs like art, music and sports, there’s an opportunity to help parents see the value in helping their children save money for such activities. Especially if they could receive matched funds to go summer camp, buy equipment for a sport, or learn to play a musical instrument, Cummins points out. If Cummins had a bigger budget, he could offer other types of financial education, but he stresses that his in-school branches, with their emphasis on weekly saving, are educational. “People are accustomed to seeing a lesson plan and workbook as financial education, but no matter how many classes a student takes, if their behavior doesn’t change, nothing changes. A savings habit directly affects behavior,” he says.

What works—give youth an element of control On some levels, there’s not much difference between engaging and educating youth outside the mainstream and other young people. You face the same challenges. “It’s hard to get them involved, period,” says Pam Owens, director of education and training for the National Federation of Community Development Credit Unions (Federation). Across all youth populations there’s a much wider availability of credit and spending avenues, including the Internet and cell phones, comments Dan Apfel, a program associate in education and training for the Federation. “Once they turn 18, they’re all being bombarded with credit offers,” Owens points out. That makes the need for financial education all the more critical.

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Be Sure To Develop an attention-getting theme for your youth financial education sessions to attract more participants. Also: • Create a relaxed, youth-friendly atmosphere— if it’s appropriate, consider having comfortable sofas and play music teenagers like. • Keep sessions interactive—require all students to participate so that they retain the information better. • Keep it informal, and integrate topics students are interested in—when you discuss saving, for example, talk about saving for a popular electronic device. • Offer prizes for participation—cash is always popular. “One thing worth noting,” Apfel adds, “is that school districts in lower-income communities can be more protective of youth, and can make it more challenging to work with students. They’re so focused on test scores that they have trouble relinquishing control to an organization not focused on that.” When credit unions are able to get into schools, programs where young people get to participate and take responsibility work better than traditional, lecture-based classes, Apfel indicates. He advises giving students integral roles. “Successful credit unions work to directly engage youth and give young people an element of control,” he says. “Once they participate, they get excited about it. “In programs like Alternatives Federal’s, youth are a part of the credit union, they help manage it and bring in new members; they’re doing financial education and making decisions about how programs are implemented and what accounts kids can have,” Apfel continues. “It’s an advisory role. Sometimes an in-school credit union has its own board of directors. The young people really have responsibility instead of following what adults decide for them.” One positive trend Owens has observed is that credit unions’ pro-

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Be Sure To Make your education sessions fun and interactive. Also: • Make job skills part of your financial education lesson plans. • Include topics important in students’ lives—like finding a job—and work in money-management information. • Treat participants respectfully—don’t talk down to them. Make them feel good about speaking up during educational sessions. gram materials are now much more youth-focused, unlike 10 years ago. “In past years they used adult materials; now they develop pieces for youth that speak to things youth are interested in,” she says. She also applauds young people working with other youths, as with student tellers. “They feel more comfortable, like, ‘Someone my age is doing it; I can too.’ ”

Lounge de Vida PrimeWay Federal Credit Union in Houston, Texas, launched two interactive, attention-getting financial education programs at this year’s Houston Hispanic Forum’s Career and Education Day, The theme this year was “Higher Education, Higher Expectations.” And that was exactly PrimeWay Federal’s focus while creating a new strategy to teach finances to middle and high school students at the event. The annual event is for Houston and surrounding school district students, and 73 districts participated last year. More than 19,000 students attend the event each year and nearly nine of ten are Hispanic. PrimeWay Federal’s unique educational sessions proved the popular place to be during this year’s event. Sessions were so packed that the credit union had to ask students and their parents to come back to later sessions. One session took place in the “Lounge de Vida,” where the ambiance was relaxed and perfectly 102 M O D E L Y O U T H P R O G R A M G U I D E

suited for teenagers, with love seats, sofas, stools, and music. Credit union staff held interactive chats every hour—encouraging active participation for better understanding and retention. Chat topics were “Stash Your Cash” (saving money) and “Cool Basics” (needs vs. wants). An added incentive was the possibility of winning some cash at the end of each chat. “The concept seems deceptively simple,” acknowledges Michelle Oshinski, PrimeWay Federal’s vice president of marketing, “but Erica Plata, our marketing specialist, created exactly the right look and feel when designing the ‘Lounge de Vida.’” It was a place where students would really want to hang out. “Then there’s an enormous difference between imparting valuable information in a personal conversation or chat and giving a formal lecture,” Oshinski adds. “We spoke to students on a more personal level, in an environment they liked, about topics they were interested in.”

One parent in attendance said, “What you’re doing is great; we haven’t seen anything like it.” It turns out that the credit union way—know your potential members and treat them with care and respect—is the key, no matter what the situation.

In the Boys & Girls Club Schools aren’t the only places credit unions can reach lowerincome youth. Great Wisconsin Credit Union and Summit Credit Union, both of Madison, Wis., for instance, have teamed up to launch STAR Credit Union, which opened in 2005 to serve this population. Its primary field of membership consists of members of the Boys & Girls Club of Dane County.

Be Sure To Reassure skeptical “unbanked” parents that your credit union is not out to take advantage of their children. Ask supportive parents to help spread the word about the benefits of membership.

Get a Job 101 PrimeWay Federal also ran an educational panel, “Get a Job 101.” Rodney James, the business development specialist who coordinated it, says the panel was an enormous success for the same reasons. “We went ‘out of the box’ and didn’t concentrate on careers in the financial services industry,” he says. “We made ‘Get a Job 101’ fun, with live models interacting with the crowd and a panel of knowledgeable human resources executives from several industries.” Credit union employees served as the live models, focusing on how to dress for formal and casual job interviews. They answered students’ questions and added practical jobhunting information. Some of the models held cardboard signs, much like the ones you’d see on a street corner, advertising the session. It created a buzz that made it one of the day’s best-attended sessions.

“We’re reaching out to kids whose parents often haven’t had positive financial experiences— they’ve been turned down for credit, or they’re going to payday lenders,” says Elizabeth Janowski, the credit union’s president and only employee. “We wanted to reach these kids at a young age so they’ll be ahead of the game when they’re older.” STAR has a small office in a local Boys & Girls Club, and young people can get hall passes to come up and make a transaction or open an account. Any club member can join, so the youngest are age seven and the oldest age 18. The credit union is open to club staff as well. It offers savings accounts only, and its objective is to get youth thinking about saving and budgeting. “We pay 5% interest on balances of $1 or more so kids can quickly see their money grow,”

Janowski says. STAR’s new Web site lets members go online and view their accounts and statements. (See Sample “Youth-Oriented Web Site.”) The credit union has a marketing committee made up of young members. “We meet every week or two and talk about what they like and don’t like about the credit union,” says Janowski. “The meetings are a drop-in thing and we usually get 10 to 15 kids. I originally tried to make it a set group of kids, but it’s hard to get the same ones every time. Most are elementary and middle school age; we don’t get a lot of teenagers.” It really makes STAR their own, she notes. “They design posters, help me plan savings challenges, and make announcements at school assemblies.” As of March 2008, the credit union has 260 youth accounts, with an average balance of a little over $14. “It’s not huge, but it’s been going up every month. It shows the message is getting through,” says Janowski. Members can open an account with a quarter, and can save up to $500. “We have two kids that just passed the $100 mark, and a nine-year-old who’s about to hit the $500 limit,” she says. “He has a lot of support from his parents, and his grandparents, aunts, and uncles send him money.” Some parents don’t support her efforts. “Many are upset when their kids open accounts; they think we’re here to take their kids’ money away and that they won’t get it back,” Janowski explains. “There’s a lot of distrust.” It’s better than at first, though, now that the credit union has gotten its name out in the community. A parent-outreach letter Janowski sends helps too. “When a kid opens an account, I send a letter about STAR CU and our history, assuring them that we’re insured, and that they can go online and look at the account with their child. They feel

better when they can do that.” (See Sample “Letter to Parents about Youth Membership.”) She also tells parents they’re welcome to visit the credit union any time, and invites them to visit Family Fun Night at the club, for food and games. “I meet parents that way and make sure they know who we are and what are goals are.”

What works—partner with community organizations At the Federation, Owens is excited about the credit union partnerships she’s seeing with Boys & Girls Clubs, Junior Achievement and other organizations. “The benefit is that you actually get to reach the population you’re targeting. You have professionals on board who know these young people, their issues and concerns, and have worked with them.” The first thing you should do is engage the community. “Come up with an idea in dialogue with the community, something that the community needs, rather than coming up with a program and trying to make the community want it,” Apfel says. And make connections and share ideas with other credit unions doing the same thing, he suggests. “Take advantage of the fact that credit unions are cooperative and work together.” Remember that, especially with youth programs, it’s not an overnight thing, adds Owens. “The strongest programs are years in the making. A program like Alternatives Federal’s, our oldest, is very strong and very good. All programs have some struggles in the begin-

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Be Sure To Engage the community in program planning, so that it’s based on the community’s needs, rather than devising a program and trying to persuade the community to accept it.

ning. As they develop, they learn what works and what doesn’t. They have to be in it for the long haul.”

How to—teach troubled youth When teaching young people from troubled backgrounds, a subgroup of those outside the mainstream, it helps to dress casually so that you don’t intimidate them, and speak in terms they can relate to, notes Kay Neidlinger, vice president of communications for the Indiana

Be Sure To Look in all the corners of the society for groups of overlooked and neglected youth in need of the skills to improve their lives and help their families to a financially secure future. Credit Union League. She recalls a unique approach the former Bayer Federal Credit Union, Elkhart, Ind., (now INOVA Federal Credit Union) took to improving financial literacy. “Through a partnership with a children’s home, the credit union brought the message of financial responsibility to those who needed it most—troubled youth,” she says. The Bashor Children’s Home in Goshen, Ind., provides the basics for kids of all ages, many of whom can’t live with their parents because of unfortunate or dangerous family situations. Bashor residents have access to an alternative school, substance abuse counseling, emergency-shelter care, and a variety of faith-based programs. Like most teenagers, Bashor residents have no regular jobs, little—if any—income, and seek instant gratification. And because of their family backgrounds, these young people don’t have any positive role models when it comes to financial responsibility. Yet they yearn for a better life. “Going into this, I expected the

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kids would be really interested in how money would help them get freedom. Things like how to borrow for a car, or learning about credit cards,” said Tammy Bowling, Bayer Federal’s marketing manager at the time, and liaison to Bashor. “Instead, about 90% of them were most concerned about saving money for college.” Besides targeting students who would soon be leaving Bashor for independent living, the program also served resident 16- and 17-year-olds and even some of their parents. Students and parents decided that separate classes would be best. Each of the parents then brought an adult friend, and Bayer Federal and Bashor established a schedule of classes for both groups that extended seven months out. This allowed instructors to cover all the units in the NEFE High School Financial Planning Program® (HSFPP). Lessons began with budgeting, setting short- and long-term goals, and tracking spending and income for two weeks. Bowling credited Bashor staff for the program’s initial successes. They recommended a casual style, with no suits allowed. They also advised talking on the teenagers’ level without talking down to them. “The staff positioned these classes as very important,” Bowling said. “Because the young residents have struggled with so many things in their lives, it’s often hard for them to see the big picture financially, and most have never been exposed to a financial planning message.” Credit union staff members and Bashor teachers gathered in the summer of 2005 to learn how to

Be Sure To Pursue maximum coverage for your programs in local media, not only to raise awareness for your self-help efforts but also to attract philanthropic and volunteer support.

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present the HSFPP. “The Indiana League has a strong working relationship with the Purdue University Cooperative Extension and one of its specialists, Dr. Elizabeth Kiss, who has ‘trained the trainers’ to use the NEFE program and has worked with several Hoosier credit unions and traditional school systems,” Neidlinger says. “Two executives— the credit union’s then-CFO, Greg Gruber, and Bashor president Don Phillips—who belonged to the same Rotary Club, brought the organizations together.” At first, staff from the credit union and from Bashor teamtaught, then credit union staff took over most of the teaching. Instructors included the credit union’s accounting manager, branch managers, and an indirect lending department representative who was energetic and young enough to connect with the students. Partnerships like this one not only benefit credit unions—by creating lifelong, prosperous members—but entire communities. They help prepare troubled youth to be financially independent and to understand the credit union difference. “Educating members of the community about financial literacy is part of what credit unions were chartered to do,” says INOVA Federal’s president and CEO, Dallas Bergl.

What works—create CUSOs Some credit unions are pooling their resources, creating CUSOs that offer financial education, among other things. A group of Texas credit unions started the El Paso Affordable Housing CUSO in 2002, originally to help low-income families get into homes. “At first we thought it would be just rolling out some products, but we found we were mostly doing financial education to get people mortgage-ready,” says Larry Garcia, president. “Ever since then, that’s

what we’ve done. We’ve found financial education has to start in schools. It hasn’t been formally taught there, only as an afterthought.” Last year, he and Ray Sarabia, the organization’s community liaison, worked with the state’s Legislature to get laws passed mandating financial education in schools. Now it’s required to offer classes for juniors and seniors before they graduate. “It’s an unfunded mandate, though, so the schools are struggling to achieve it,” Sarabia says. To help young people learn, Affordable Housing got involved with

Be Sure To Encourage the highest aspirations of all underserved youth; there is no reason for them to aim lower because they’re starting with huge disadvantages. the U.S. Department of Education’s Project GEAR UP. (See Resource List.) GEAR UP is a federal program designed to increase the number of low-income students who are prepared to enter high school by means of grants to states and partnerships to provide services at high-poverty middle and high schools. “It provides different types of social support so kids can go to college. One is to get families financially educated so they can budget for the costs,” Garcia explains. “Part of it is going into schools, especially in underfunded areas, and teaching in the classrooms. GEAR UP coordinates class time for us, and Ray goes in and teaches. There are 1,200 people in the program in El Paso,” continues Garcia. Sarabia has found that interactive teaching works best. “The University of Texas in El Paso’s drama department helped us by developing videotaped skits that we show after discussing concepts like budgeting,” he says. “Then we talk about it some more. It seems to be the best way to get students to see how the financial world relates to

where they’re at.” The CUSO’s materials are all bilingual, so the videos are in Spanish with English subtitles. They’re ten-minute vignettes in soap opera format that point out financial concepts. “We originally developed

Resource List

Where To Go for More Information • Best of Adventures in Savings (elementary school activity book)—Search 27761 • El Paso Affordable Housing Credit Union Service Organization • GEAR UP (Gaining Early Awareness and Readiness for Undergraduate Programs) • Guide to Money (handbook for teenagers)—Search 20769 • U.S. Department of Housing and Urban Development (income guidelines) • National Federation of Community Development Credit Unions • Programa NEFE de Planificación Financiera para la Preparatoria—Seleccione Students, seleccione Programa en Español • Resources for the Underserved Credit Union Web sites • Alternatives Federal Credit Union • GECU • Great Wisconsin Credit Union • INOVA Federal Credit Union • PrimeWay Federal Credit Union • STAR Credit Union • Summit Credit Union

them to play while we were preparing tax returns for families as part of the VITA (Voluntary Income Tax Assistance) program,” says Garcia. “They’d bring their kids, we’d play the videos on a loop, and we hoped they’d listen.” Sarabia also finds simple interactive dialogues very effective. “I’ll identify two students and say, ‘This one has money; this one needs some. This one asks for a loan; the other lends it. What happens if they don’t pay? What would you do?’” he illustrates. “The class gives their opinions and it becomes a game for them. They learn the concepts of being lenders and borrowers.” He teaches in high schools, and just began teaching in middle schools. “It’s very different and a lot more challenging. You really have to engage the younger ones to keep their attention—they have shorter attention spans,” he says. About 60% of the students Garcia and Sarabia teach are Hispanic, about 25% are Caucasian, and a few are African American and Asian. Sarabia says the mixed audience doesn’t present extreme challenges because most speak English, and quite a few are bilingual. Every class encourages savings, and the CUSO provides applications for youth accounts offered by partner credit unions represented on its board. (See Resource List.) Sarabia says that sometimes the children become their parents’ teachers. “We know that’s true because in classes we tell kids their parents can save money by coming to us. I’ve heard students tell their parents, and then they take advantage of our services,” says Sarabia. “We’ve also had some parents come in to participate in our classes, and they’ve become home owners.”

Showing the credit union difference When educating youth—mainstream or not—the earlier they learn, the better they’ll be able to

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handle the demands of life. “At a young age, they learn the responsibilities they’ll have as borrowers. As they mature, they start using financial services and they’re very responsible,” Garcia says. “Financial education helps them get out of high school with good credit.” In his classes, Sarabia lets students know they’ll receive card solicitations. “My son got a credit card when he was a freshman—a friend’s mother signed for it,” he says. “I wasn’t too happy about it when I found out, but it’s a good thing his mother and I are knowledgeable about credit and could teach him.

Be Sure To Document and share with management and the board the positive consequences of teaching youth to manage money, such as when your instructional materials find their way home to educate parents as well.

He’s done well with it. He does odd jobs in the neighborhood and puts money in his accounts—he’s a young entrepreneur.” If credit unions provide education to youth, they’ll know the difference between credit unions and banks. “Many times they don’t know credit unions exist,” says Sarabia. “They think banks or fringe lenders are their only options. Offering financial education builds a good loyal membership base for the future.” Credit unions really need to focus on youth and get into the schools, Garcia adds. “There are a lot of nonprofit programs they can get involved with and teachers are always lacking resources. Credit unions can put themselves in a position to raise membership.” But if a credit union wants to provide education, it really has to commit, realize that it costs money, and plan for the long haul. “If you’re only halfway committed, kids will pick up on it,” Sarabia says. “They’re pretty sharp.”

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Youth-Oriented Web Site

Source: STAR Credit Union.

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Letter to Parents about Youth Membership Dear [PARENT’S NAME], Your son/daughter, [CHILD’S NAME], recently opened up a savings account with STAR Credit Union. I wanted to let you know about the credit union---what we are, what we do, and what we believe in. STAR Credit Union (Saving to Achieve Results) opened its doors to members of the Boys & Girls Club of Dane County in June, 2005. It started as a joint venture between two local credit unions (Great Wisconsin & Summit Credit Unions) who wanted to bring financial literacy to youth in the Madison area. STAR is the only youth chartered credit union in the world! We are part of the Credit Union National Association (CUNA) and are federally insured by the National Credit Union Foundation (NCUF). STAR is a safe, secure place for your child to save their money. STAR’s mission statement is to “instill financial literacy and responsibility among members of the Boys & Girls Club of Dane County, Inc., by providing access to financial services and the opportunity to participate in the development and operation of the credit union.” Besides being a working credit union, we run programming with members of the Boys & Girls Club 1-2 days per week. Members participate in fun, hands-on learning activities that teach financial literacy, from discussing wants vs. needs to checking accounts to part-time jobs. We currently have 290 members and continue to grow. Boys & Girls Club of Dane County youth and staff members can join STAR, as well as employees of the two funding credit unions. We have savings accounts only (no checking, credit cards, loans, etc.). To open and maintain an account, a member simply needs 25 cents. Every time a member makes a deposit, they receive a piece of candy as an incentive. We also have a program called “Question of the Day”. Everyday STAR posts a new financial related question on the board in our office. If the kids come up to answer it, they receive a sucker. This is a nice way to talk about money topics while also getting to know members a little better. STAR is currently open three days per week. Our hours are: • Monday 2-5 • Wednesday 3-6 • Thursday 3-6 We encourage all members to save, not spend, their money. Every month I announce the new Saver of the Month award to the member who saved the most money in a one month period. They receive a prize for this (piggy bank, movie certificate, etc.) and $5.00 into their STAR account. It is a great incentive for the kids to save. We also have a new Web site at that we encourage members and parents to visit regularly. Members can also sign up for internet banking by visiting STAR’s office. I hope this helps to explain STAR Credit Union a little better. We are so excited to be a part of the Boys & Girls Club and encourage you to stop by anytime. Please feel free to contact me with any questions or concerns you may have. Keep up the great saving! Thanks,

Source: STAR Credit Union.

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Chapter 8

Action Checklist

3 Build Your Program Plan  

Solicit business plan input from coworkers. They’ll be important allies as you implement your plan upon approval.

Solicit business plan input from a wide-range of kids and teenagers, using informal, pizza-fueled focus groups. Include plenty of youth who are not coworkers’ children.

Talk with school administrators and educators about what students need. What personal stories can you tell to make the benefits of financial literacy come to life?

Talk to people involved with groups such as scouts, 4-H, religious organizations, and foster homes to gain a wide view of the financial literacy needs of youth. What partnerships can you form to deliver and support your educational programs?

Write goals that are specific, measurable, adjustable, realistic, and timebound (SMART).

Write a youth program business plan that goes beyond the obvious items such as a budget. Address questions such as: • How will you involve kids and teenagers in designing the program and ensuring its ongoing relevance to youth? • How will you build parent support? • How will you use the program as a springboard to community educational outreach and a vehicle for publicizing your credit union’s leadership in financial literacy? • How will you involve coworkers in ways that increase job satisfaction and productivity? • What role do you see for qualified members, such as active and retired teachers? • What are your program participation goals? • What are your educational goals? • What are your goals for service use?

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• What annual measures of success will you use? • How will you follow program graduates into adulthood to measure long-term effectiveness? Connect your youth program proposal to your credit union’s strategic plan and your board’s goals. What is the potential for increased member business in the short-term? How do you expect your program to contribute to long-term growth in membership, loans and other areas, including member satisfaction?

Plan to start small and build the program based on meeting benchmarks. What tangible results do you expect your program to produce quickly and consistently?

Create a proposed budget showing how much each program and activity will cost. Can you recruit volunteer support from members who are parents and/ or teachers?

Keep credit union management and coworkers informed about and involved in all activities. Do your fellow employees have stories to tell that generate staff “buy in” and personalize the need for a program?

Plan and host demonstration activities such as a used-car-buying seminar to show the positive effects that a formal and permanent youth program can deliver. Can you produce youth testimonials to the benefits of financial education activities?

Propose scholarships, ambassadorships and contests to build relationships with schools and engage and assist young people. Are there examples of successful youth programs within your credit union chapter or local community that you can point to as models?

If your youth program is beyond repair, start over and build one that works.

Model Youth Program Guide Best Practices & Proven Techniques

Chapter 8:

Planning Logistics and Budget Summary Developing an effective youth program means ensuring that your board and senior management are fully committed to the effort, understand its importance, and integrate it into their strategic planning. Implementing a program successfully will require committed coworkers as well.

Highlights u When it comes to deciding what financial education and products your youth program should include, start by establishing well-defined goals that support your credit union’s overall plan. Keep coworkers informed and involved and talk to educators and administrators about what would work with their students. Look for partnerships to help implement those goals.

u Propose a budget to management that includes a realistic slate of activities and their costs. Realize that all of your requests may not be approved, and be prepared to scale back. Show management that you’re already achieving results.

u Seek possible external funding through credit union-related foundations and partner organizations, which might be able to obtain grants and contribute a portion.

u Scholarships, ambassadorships, and contests can add excitement and attention to your program.

u Sometimes it’s better to scrap a tired program and develop a better one from scratch.


his is your life. You’re married with two children and a dog. You and your spouse make a combined $35,000 a year.” That’s the sample scenario a high school student might have received at a recent Northwest Federal Credit Union-sponsored “reality store” financial workshop in Herndon, Va. “What will it cost you for food each month? What about gas?” credit union facilitators asked students seated in small groups. The students created realistic budgets and financial plans that accounted for basic expenses, while still leaving money for things like entertainment and unexpected costs. The results shocked many of them. Jim Hannon, a Herndon High School administrator, said, “When students start to understand just how much of their income goes toward groceries, rent or mortgage, utilities, and all the other items involved in daily living, the ‘reality’ really hits home.” Students left that day with a better idea of how to plan for the financial situations they’re likely to encounter over the next 10 years. Experiential activities like this one can be a key ingredient in a credit union’s youth programs. “But there’s not just one perfect program,” says Juri Valdov, a member of CUNA’s board and retired CEO of Northwest Federal. “A lot of the programs out there are working; some are good, some are better, and some are excellent. All are making some difference for young people.” What does it take to make your credit union one of the excellent

ones? Buy-in from your board and senior management, involvement and enthusiasm from all of your staff, good planning, and solid budgeting. Those are the topics for this chapter. (See Sample “Youth Program Design Template.”)

Strategic youth programs Helping youth achieve financial literacy is a core value for the credit union movement as a whole. And it should be for every credit union, indicates Valdov. “If it isn’t already, it should be part of your credit union’s strategic plan and a specific line item in your budget. You should assign someone to have it in their job description, so it’s something you do on a daily basis instead of just once in a while.” Valdov chaired CUNA’s Financial Literacy Task Force, which identified financial literacy as something that can improve the future of credit unions and of our nation. “It could have a big impact on youth coming into the world,” he says. Financial education and financial services form the road to financial literacy, so it’s vital that credit unions offer youth programs that incorporate education, along with financial products and services, to fit youth of varying maturity levels. It not only improves the lives of involved young people—and their communities—it develops the next generation of dedicated credit union leaders and employees. That’s something the movement needs. “The credit union movement as

You Got That Right 55% of credit unions planned to increase spending on youth financial education programs from 2007 to 20081.

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a whole isn’t thinking far enough ahead about its need for leaders from the next generation and the generation after that,” Valdov says. “You often hear that members don’t understand the difference between a credit union and a bank. I think you can teach adults the difference but they still won’t necessarily appreciate it. Most adults are too cynical—they just want that better loan rate. However, it’s another thing with the younger set. “To truly feel the importance of credit union uniqueness, you have to encounter it while you’re still idealistic enough to get emotional about people helping people,” he continues. “Kids want to belong. That’s a powerful drive when you’re young. If our youth programs included a good dose of credit union philosophy, we’d end up with not only better savers and borrowers, but also with the

dedicated executives and volunteers we’ll need to run the show in the future.”

How to—get your board on board The first step in developing an effective youth program is ensuring that your board and senior management are fully committed to the effort, understand its importance, and integrate it into their strategic planning. “The board and CEO have to commit to supporting the program, and then commit the time of their people to make it happen,” says Valdov. “If a credit union doesn’t have commitment from the top for financial literacy, it won’t happen. It can’t work its way up from the bottom.” You might be lucky; your board and CEO might come to you, and ask you to undertake the effort. For

Make the Business Case Personal Lewis Mandell, Ph.D., professor of finance and managerial economics and former dean in the School of Management of the State University of New York, Buffalo, remembers a key point in his life as a financial consumer. “When I was a kid going to public schools in New York City, a local savings bank started a passbook savings plan administered in class by our third-grade teacher. Every week we’d bring in a nickel or a dime. The teacher would record it and hand out our bank books so we could see the additional balance, and we’d talk about it. “Did it make me a better consumer? I don’t know. But until I graduated from college and moved from the area, that was the only bank account I had, and it held a couple thousand dollars by then. “The bank did very well by making itself my first financial institution—that’s a very compelling argument for credit unions. Most banks and thrifts have since pulled out of this market. They stopped issuing passbook accounts because they didn’t want to deal with the low balance accounts. Costeffectiveness studies showed they weren’t profitable, but that was very short sighted. The accounts would have eventually become profitable.” Mandell points out, “I’ve been on credit union boards, and in my experience, the only member likely to understand the importance of these types of youth programs is someone from marketing, and marketing people don’t generally get on boards. To get them to understand, you have to make a business case, and there’s a strong one to be made.” To make that business argument, he recommends telling your board stories that illustrate how model youth programs benefit not only members, but the credit union. Mandell participated in an early youth outreach effort (by a bank—gasp!) that boosted his financial knowledge and yielded a solid return for the bank. Tell your board stories like his, which show the self-interest for credit unions in offering model youth programs: To find good member stories for your board, Mandell advises, “Get account retention statistics on members who joined when they were young. If you look at the longevity of your young peoples’ accounts, it’s a good way to flush out stories.”

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others, it might take some convincing. Kathy Crim, director of education at Texas Dow Employees Credit Union in Lake Jackson, Texas, is lucky. “My board believes reaching youth is our No. 1 priority—they know from their own grandkids how spending can get out of control,” she says. “Our board members are innovators, and they support our youth program efforts all the way.” Crim has helped several other credit unions develop youth program plans, and in some cases, it’s taken some convincing. If you’re in that situation, “Get your facts and figures in order,” she advises. “CEOs and boards are numbersoriented.” Look at how many current and potential minor members are within your field of membership. “Dazzle the CEO and board with this potential membership base and the products that will appeal to each group. Talk about the importance of teaching saving, money management and borrowing to make them better credit union members—and lifelong members,” Crim says. “If they can see the positive impact to the credit union over the lifecycle of a child, they’ll believe.” (See Sidebar “Make the Business Case Personal.”) Sometimes she has skeptical board members shadow her during a classroom program. “That’s one of the best ways to show them the effectiveness of financial education,” she says. “I ask them to go along, and I tell them they don’t have to do anything. Although if I can, I’ll have them talk to a teacher, or better yet, the principal, about the program’s impact.” If a board member is unavailable, Crim sometimes invites their spouses into the classrooms. “Then they’ll discuss it at home that night,” she says. Of course, sometimes it’s the CEO, rather than the board, who’s reluctant. “They see another

costs. Figure 8-1 shows recent growth in what credit unions are spending on youth programming.

Figure 8-1

Change in Credit Union Spending on Youth Financial Education (2004-2007)

How to—set your budget

80% 70 60 50 40 30 20 10 0 -10%


100M250M250M 500M Asset Range

More than $500M

Source: Credit Union National Association.

partment to build, another person to hire, more expense,” says Crim. “But it doesn’t have to be that way. Employees love to volunteer. You can start with a handful of people and send them out when you get calls from schools. “Between current employees, board members, and volunteer committee members, you can get out into the community,” she continues. “Every credit union does volunteer work; why not make financial education your No. 1 focus?”

What works—start small A board member might say, “We’re small, how can we afford to market the program?” says Crim. “Tell them we can start by sending a letter from the CEO to the schools, inviting them to call if they’d like presentations. We can put an invitation on our Web site. We don’t

Be Sure To Make your youth program matches your credit union’s strategic plans. Garner full support from your board and top management in the planning stage with a realistic budget and business plan.

need a full-blown marketing effort.” Many small credit unions believe they don’t have the resources for a youth program, especially to educate in classrooms. “But for every credit union I can find a plan,” says Crim. “You can take three people, four hours a week, and start with one school,” she says. “Canvas it, ask if they want you to come in every month and do presentations. If they say yes, go back and work out dates for 10 presentations over a school year. Then check with employees’ supervisors and assign them to present.” Remember that not all employees like to speak before groups, she cautions. “You should survey them, and find out how many would like to go along and present a segment.” It comes down to this, says Kelly Schermerhorn, CEO at CES Credit Union in Mt. Vernon, Ohio: “Just do it. It doesn’t have to be complex. The bigger your credit union is, the more resources you have, the more you can do. But so many are concerned about having the perfect program that they don’t do anything.” Which doesn’t negate the importance of planning, of course. And that means thinking about program

Planning Logistics and Budget

Your management may set the budget for you, giving you the total amount you have to work with. In that case, you’ll have to think of all the activities you’d like to offer, figure out how much they cost, and prioritize so you can offer the most important ones within your allocated budget. Hope springs eternal, though, so track not only how much you spend during the year, but keep a list of additional activities you’d like to offer next year, such as schools you’d like to partner with. Propose a budget to management including a realistic slate of activities and their costs. Don’t ask for the moon, though, or you’ll lose credibility. Realize that all of your requests may not be approved, and be

Be Sure To Participate in events like National Youth Week. It helps you take advantage of free materials, activities, and excitement.

prepared to scale back. Don’t get discouraged, though. You’re still making a difference. And next year’s budget might be different, right? In your budget for an existing youth program, track progress and show management that you’re already achieving results. You can use the data to improve your program, too. (See Chapter 9.) “Include things like number of members enrolled during the past year and number of new schools reached,” says Stan Cowan, vice president of development at A+ Federal Credit Union, Austin, Texas. “Show how your planned initiatives will support the credit union’s growth goals.” (See Sample “Youth Program Budget Item List.”)

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An Essential Program Outline 1. Background information. Explain why you’re creating the program, any awards your existing program has won, and how many members currently belong or could belong to the youth program. 2. Member needs. Describe educational seminars for staff and members, for example. Obtain reports to determine youth benchmarks for future measurements, such as deposit activity and member retention. And research products for youth that your credit union can or does offer. 3. Changes to how the credit union does business. Justify a need to educate staff and provide newsletter articles, for example. 4. Productive growth opportunities. Describe how you will promote youth programs to members, how will you increase youth membership and deposits, and how will you educate youth members about the benefits of credit union membership and financial education. 5. Vision or purpose. Stress the importance of establishing relationships with your members. 6. Calendar. Show how you will implement the program with specific events. 7. Budget. Outline the cost of each event, seminar, and so on. Include a description of volunteer and in-kind contributions from the community or school. 8. Evaluation. Describe the tools you’ll use to measure program progress and growth.

How to—stay on track For a single credit union or a group working together, strategic planning can help keep you on track. The Minnesota Family Involvement Council held its first strategic planning session last year to great effect, indicates Kristina Wright, vice president of communications at the Minnesota Credit Union Network. The tax-exempt council is under the umbrella of a league’s foundation. “We’re a group of credit unions that gets together to encourage other credit unions to become involved with young people, to be a collaborative voice for what credit unions are doing,” says LeAnn Achtenberg, vice president of marketing at Anoka Hennepin Credit Union, Coon Rapids, Minn., and former chair of the National Youth Involvement Board. She’s a council member. The council brought in an 112 M O D E L Y O U T H P R O G R A M G U I D E

outside facilitator with credit union experience to facilitate its planning session at the last league annual meeting. “We were going through a changeover in leadership at the time, and it was nice to have somebody outside the group to say, ‘Here’s where I see you’ve been going and where you want to head. There was no tunnel vision,” says Wright. “I can already tell a difference as we go along toward our goals,” she adds. “As a volunteer committee, you need guidelines for what you’ll tackle. It’s too easy to get sidetracked and overwhelmed, and important projects fall by the wayside.” The group took a global look at its mission, brainstorming about who its youth audience is and what that group wants from the council. “We approached possible solutions with a pie-in-the-sky attitude—if we could do anything we wanted to help credit unions, what would we do?” Wright says. “We came up with quite a list and then scaled it down to something manageable. You can’t abuse your volunteers or you’ll chase away good people. Also, new projects can be exciting, but we don’t want to lose sight of established programs.” A youth program business plan is impressive to management, and the process of developing it really helps you think through what you want your program to accomplish and how it will work. As you create the plan, think of what management wants to see. “Ask yourself: ‘What’s the bottom line?’” recommends Heather H. Harris, vice president of community development for Isabella Community Credit Union, Mt. Pleasant. Mich. “To answer this, create a plan that’s consistent with your credit union’s mission and goals,” she continues. “Next, provide an out-

line that lists your objectives and tactical plans you’ll implement to support your youth program.” (See Sidebar “A School Year Calendar.”)

SMART goals—good for you too When it comes to deciding what financial education and products your youth program should include, start by establishing well-defined goals that support your credit union’s overall plan. That’s one reason a youth program has to be integral to the credit union’s strategic planning. Achtenberg says, “Look at your credit union’s overall goals for increasing membership, for example, then show how your youth goal contributes to that: Increase membership by 5% overall, including an 8% increase in membership under the age of 18. You also can do the same for products per member, loans, deposits, and other organizational goals.” Setting targets for your plan begins with that old reliable—the SMART goal, as useful for youth programmers as it is for youth. After all, knowing exactly where you want to go and how you’re going to get there is essential to success, whether the object of desire is a rock concert or an uptick in solid, used-car loans to first-time borrowers. Assuming that your board wanted to lock in more member

A School-Year Calendar Here’s how Rose Evers, administrator of marketing and community development at OUR Credit Union (formerly Royal Oakland Community Credit Union) in Royal Oak, Mich., creates a school-year planning calendar. With it, she schedules a year’s worth of programs, from school partnerships to in-house training. June —After school is out, she meets with her credit union’s marketing specialist, school liaisons, former co-op students (similar to student interns), and the co-ops just hired for the next school year to review the past year’s calendar. The group talks about what worked and what didn’t and plan for the next year. They brainstorm ways to attract new students to the in-school credit union branches at two high schools. July and August—Evers uses her summer for planning and working with school liaisons to put together a student-branch promotional calendar. The district’s calendar for the coming school year helps them schedule the promotional dates around school and credit union holidays and other closings. The calendar includes dates for school announcements, which the co-ops write to be included in each building’s morning news. September and January —During these months the credit union holds membership drives, incorporating giveaways, welcome-back-to-school decorations and referral programs. November and December —Evers and her team encourage giving, to get students involved in a social responsibility project. The calendar prevents conflict with other student groups, such as a student government food-collection drive. Any student or member of the school staff who donates items, such as new hairbrushes, toothpaste, gloves, scarves and shampoo to the credit union’s personal care drive becomes eligible for a drawing. Year ‘round—“Almost fifteen years ago, when we started our student branches, we had two goals,” Evers says. “First, to create a hands-on learning experience for the high school co-op students we hire to operate the branches. Second, to create a convenient location for students to develop good saving habits.” The school calendar helps her credit union meet those goals. ” The co-ops’ participation allows them to give input, learn marketing and other new skills, and gets their support for the calendar. It’s all part of their handson learning,” Evers explains. “By preparing my school-year calendar during the summer, I empower my liaisons to run their in-school branches. I give my co-ops their assignments as well as get their support,” adds Evers. “Best of all, I free up time during the school year so I can focus on my teachers, students, and other tasks and projects.”

business through electronic access, here’s what the pieces of a SMART goal for a youth money management product might look like: 1. Specific—debit cards for members under age 18. 2. Measurable—a 20% increase. 3. Adjustable—a two-percentage-point reduction in the goal for each month’s delay in the launch date. 4. Realistic—a required twohour educational session. 5. Time-bound—during the 2008-09 school year. Putting it all together, and expressing it formally, this SMART goal becomes: To achieve, by the end of the 2008-09 school year, a 20% increase in the number of debit cards issued to members under age 18 who have qualified by completing a two-hour educational session about responsible account management. We will reduce the targeted increase by two percentage points for each one-month delay in the planned August 1 start for this promotional effort. Once you’re adept at writing SMART goals, you won’t need to be so wordy, although a formal statement like the one above is suitable for a board presentation.

Planning details When you’re determining what types of youth education to offer, talk to educators and administrators about what would work with their students. That’s the approach Northwest Federal’s Valdov has taken. “We’re not educators; we don’t have kids in our environment all the time,” he says. “Educators are the ones who know what’s needed. It’s a collaboration; you’re figuring out what you can offer to meet their needs.” Look for partnerships to help implement those goals. Your league may have initiatives you can participate in—or some states have family

Planning Logistics and Budget

involvement councils, youth involvement boards, or financial literacy committees—with great programs. You could collaborate with local nonprofits or pool your resources with other credit unions. (See Sidebar “Partnership Possibilities.”) If a planned program exceeds your budget, don’t write it off immediately. “Seek out possible funding grants available,” recommends Sandi Carangi, vice president of business development at Erie (Pa.) Federal Credit Union. Look for credit union-specific grants, and start by contacting your league, she recommends. That’s what she did when her credit union wanted to partner with Newspapers in Education and Junior Achievement to offer financial education. “The league sent a sample grant request so I had something to follow when writing ours, and it walked me through the process by phone.” In her state, the Pennsylvania

Celebrate National Youth Week for $0 No budget for Youth Week? No problem for a resourceful staff : 1. Register for the National Youth Saving Challenge, a free program helps affiliated credit unions build strong relationships with youth and their families. The Saving Challenge takes place during National Credit Union Youth Week, when young people are encouraged to make deposits at their credit unions. 2. Tell your members, using a free article and ad CUNA offers. Add a free youth link to your Web site. 3. Play along. Invite the staff to ham it up during Youth Week with theme days throughout the week 4. Lend a hand. Help parents by handing out free Thrive by Five tips for teaching preschoolers about money. 5. Share goals. Invite staff to put up pictures of the goals they’re saving for. Post them by their stations or make a collage. (See Resource List.)

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Partnership Possibilities Don’t feel like you have to go it alone in developing your youth program. Partnerships can help stretch your resources and enable you to offer programs you couldn’t otherwise. Here are a few examples of credit union collaborations. State councils and committees. State family involvement councils, youth involvement boards, or other state committees can be a source of assistance. In Virginia, Kim Wilkerson, vice president of marketing at Central Virginia Credit Union in Lynchburg, is chair of a group of credit unions that make up the financial literacy committee in her state. She works closely with Dawn Lindley, director of financial literacy at the Virginia Credit Union League. The league keeps credit unions informed of the latest youth program resources. “Whenever I find something free or low cost, I get it into credit unions’ hands,” Lindley says. Community nonprofits. Montana Credit Unions for Community Development (MCUCD), a nonprofit organization that’s part of the Montana Credit Union Network, has found that partnerships are helpful when seeking grants. “We’re just launching a partnership with Montana Student Saves to help students achieve higher education,” says Karen Smith, director of outreach services. “It’s a statewide program that will help 30 low-income high school students attend higher education or career training. The program offers IDA accounts with a six-to-one match.” The Student Assistance Foundation provides the matching funds. “We’ve identified communities where they have an office and we have a member credit union,” says Smith. “We develop the program and do the marketing. The credit unions hold the accounts, administer the financial aid, and provide financial education to the students.”

Credit Union Foundation offers financial literacy grants. (The National Credit Union Foundation also offers grants—see Resource List.) Carangi talked with a representative at the Pennsylvania Foundation about what information was needed to apply. “Then I gathered the information and wrote the request,” she says. She and her partner organizations looked for funding through local organizations, too, and received some from the United Way. “They have money available for causes they support, and financial literacy is one of them,” she says. “I also recommend that people contact their local Junior Achievement office.” 114 M O D E L Y O U T H P R O G R A M G U I D E

If you see a project you want to work on, look at how much funding you can attract on your own, and then look for partner organizations that might be able to obtain grants and contribute a portion, Carangi advises. With her project, it was Newspapers in Education that approached United Way. “It can be pretty overwhelming when you want to do a project and you wonder how you’ll pay for it,” she acknowledges. “But when you break the total amount into manageable chunks it’s easier.”

How to—keep employees involved and informed When you’re planning a youth program, “be sure to keep credit union employees informed and involved about all activities,” says Carangi. “It’ll make them much more enthusiastic and willing to volunteer, and they may have great ideas to contribute. How can they participate in programs they don’t know about?” Hold employee kick-off meetings before initiatives, so that everyone understands their roles. Publish employee news releases about coming programs and ongoing achievements. Real-life member stories illustrate successes best. Celebrate the group’s accomplishments. They don’t have to be elaborate; who doesn’t appreciate a piece of cake? “Our credit union is fortunate that our CEO is a huge advocate of financial literacy, and as a former teacher he also understands the importance of having a successful youth program,” says Carangi. “Involving all employees in the activities and keeping them informed is vital to the success of a youth

Be Sure To Look to your league, state family involvement councils, community nonprofits, and other credit unions, particularly within your local chapter, for partnership possibilities.

program.” With credit union management and employees on board and informed, you’ll be ready to host youth events in conjunction with your educational programs. You’ll probably also want to take advantage of opportunities such as National Youth Week each April to promote youth financial literacy and credit union membership. It can be done very cost-effectively. You might want to plan and budget for other things that will help you get in the door at schools, promote your youth program, and reward usage and responsible financial behavior.

What works—scholarships Some credit unions have reported difficulty getting into schools with their financial education programs. Administrators and teachers are concerned that they’re just out to sell products to minors. But when they come to a school offering scholarships, that often changes. Just a small investment can get you in the door at schools, and from there you can build relationships. Not to mention the benefit to student recipients. Boulder Valley Credit Union, Boulder, Colo., awards $3,500 to college-bound seniors annually. “One recipient gets $1,500, two get $1,000 each,” says Steve Carr, public relations and education specialist. “They write an essay on what the credit union means to them, and we require they show information proving that they’re going to college.” Arapahoe Credit Union, Centennial, Colo., gives out 10 scholarships a year of $1,000 each. “We’re partnering with Arapahoe Community College to help future attendees,” says Julie McLean, the credit union’s director of financial education. (See Sample “Scholarship Application.”) Your league may be able to assist. In Minnesota, the league’s

Financial Education on a Shoestring Engaging and educating youth doesn’t have to be complicated or expensive. Jeremy Cybulski, youth program coordinator at Community Choice Credit Union, Livonia, Mich., offers these low-cost suggestions: • Offer tours of your credit union for community groups such as Boy Scouts and Girl Scouts or 4H. See if you can design the tour to help scouts earn merit badges. Combine the tours with budgeting or consumer tips. • Introduce the young people to different credit union professionals, who can talk about their jobs and the skills they use. • Try an annual backpack drive. Set up donation boxes at schools, libraries, chambers of commerce, and churches. Support education as a whole as well as financial education. • Host quarterly seminars at your credit union. Invite youth of a specific age to learn about credit cards or buying a first car.

family involvement council has coordinated a statewide program for more than 10 years. It awards up to $10,000 annually to students from traditional and alternative high schools. “This year we’re trying to take it a step beyond; instead of just giving scholarships on credit unions’ behalf, we’re pulling out the important bits from students’ essays and giving them back to credit unions so they can see what youth want from them,” says Wright. Some credit unions collaborate locally, too. “Our local Erie Chapter of credit unions oversees a scholarship program, and any credit union in the chapter can participate,” says Erie Federal’s Carangi. “It’s a way for credit unions to pool their money to offer larger scholarship amounts to members who are college students. A chapter committee puts together the marketing materials, and coordinates the scholarship judging and awards presentation.” Erie Federal members can apply for the scholarships via the credit union’s Web site.

What works— ambassadorships Ambassadors can help spread

the word in several ways. The Erie Chapter of credit unions coordinates a youth ambassador contest open to young members, ages 17 to 25, of chapter credit unions. Participants write essays on pre-selected topics, and the winner competes at the state level through the Pennsylvia Credit Union Association. The state winner speaks on youth issues throughout the state at various events. Arapahoe has a high school intern who’s the credit union’s youth ambassador, talking up the credit union to his peers. “He’s a business student who comes to the credit union twice a week and job shadows. He writes articles about the credit union and will participate with us at the Credit Union Service Network golf tournament,” McLean says. “It’s the best thing we’ve ever done. He’s passionate about credit unions, and he talks to other students about us. Usually students listen better to other students.” Every week he and McLean hand out giveaways in his high school. “Our slogan is ‘Free Money’ because we give students $10 when they open an account; he’ll text his friends and ask them to come over,” she says. “He’s president of our youth advisory board, so he engages his friends and they help design our marketing collateral. He’s also developed a PowerPoint presentation, and has talked to our board and to school principals about how the credit union has helped him.”

What works—contests Simple contests—with prizes— can help attract young members to your credit union and reinforce the behavior you want. A coloring contest or “guess the number of pennies in the jar” contest can engage young members, for instance. Michigan Catholic Credit Union, Troy, Mich., holds monthly savings contests at its student-run elementary school classes, reports Rebecca Caron, business develop-

Planning Logistics and Budget

ment supervisor. “With most of our contests at our schools, the students are simply entered into a drawing each time they make a deposit. We never put a dollar amount on the deposit either. We have also filled one of our piggy banks with coins and the students have to guess how much money is in it. Around the holidays we will have a Family Gift Pack, usually a movie night at home that the students enter to win each time they make a deposit. “However, we recently started a new contest at a few of our schools called ‘The New Account Challenge.’ Basically this is a challenge between classrooms for new accounts,” she continues. “The classrooms themselves have an opportunity to win a prize package. In addition, the school also can win a prize.” (See Sample “Contest Announcement.”)

How to—revamp your youth program With the right support, planning and budgeting, your youth program should be off and running. But what if you have a program in place and

Be Sure To Consider dropping a moribund youth program and starting over. it’s not meeting young members’ needs? How do you fix it? Well, sometimes you don’t. Sometimes you scrap it and begin anew, as Achtenberg did at Anoka Hennepin. She’d worked at two leagues and another credit union before accepting the job in November 2005. The credit union’s youth program was an age-tiered saving club, and rather than tinker with it, Anoka Hennepin chose to start over. As Achtenberg explains, “We had a stagnant youth program with only 11% of members under 18. Our average member was 46 years old. We didn’t really have a plan

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Resource List

What Focus Groups Told Anoka Hennepin • Parents think that financial education should be required for product and service use. • Teenagers are skeptical about learning about money. You have to go to them; they won’t come to you. And their challenge to you: Don’t be boring. • Teenagers want debit cards and credit cards and want to know how to use them right. Interest rates are an incentive to save. • Teenagers prefer the convenience of online services, but want friendly, face-to-face service when they need help. Customer service will make or break your relationship. If you treat them like little kids, they’ll go elsewhere.

for serving youth and our current program wasn’t going anywhere. I used statistics from the National Youth Involvement Board conference about youth wants, needs, and spending; and I presented a youth program as a business solution for getting new members. Management agreed that it costs less to ‘grow’ a new member than to spend money trying to convert a bank customer. Revamping our youth program made the top-10 list at our annual planning session.” Anoka Hennepin chose to increase participation among current young members, generate longterm loyalty, and continually get new young members. It also wanted to combat financial illiteracy. Luckily, management realized that this wasn’t a quick-and-easy fix. They gave themselves a year—and set up a committee—to figure things out. The first task was to establish where they were and where they wanted to be, looking at necessities versus “nice to haves.” Management agreed that stickers, birthday cards, and coloring contests weren’t going to attract young members. They wanted a comprehensive plan supported by policy, products, and ongoing education, and delivered through a multi-channeled marketing plan… within the budget, of course. Achtenberg and an intern orga116 M O D E L Y O U T H P R O G R A M G U I D E

nized four focus groups of about 60 parents and teenagers to guide their planning. They learned that maturity levels are vastly different for teenagers of the same age. They decided to reject age requirements for services. Achtenberg says, “The big ‘ahhah?’ We weren’t making it easy for youth to use us or even want to use us. Young people want products and services when they want them, under some parental guidance, and with education. “So, it made sense to us to go with life phases rather than lumping people into age categories and offering products and services that they’re ‘supposed to’ want at a given age,” she adds. “We’ll offer savings, credit, checking without an age requirement, and provide lessons on how to use these products—as well as the consequences of misuse. “Our research helped us focus on ‘reach, teach, and serve,’ with ‘serve’ as the starting point for planning,” says Achtenberg. “‘Teach’ covers many other things as well, including an in-school branch, plus educating our staff to use ‘teachable moments’ when talking to young members. ‘Reach’ is our marketing plan. There’s no fooling kids. If you say you’ve got something fabulous, it has to be FABULOUS.” The credit union gave itself a year of planning before rolling out. The marketing challenges include being more aggressive in schools and having better relationships with teachers. Achtenberg will measure growth in youth membership, product usage, and household profitability. Every three to six months, she’ll review the numbers, and if necessary, make more changes. Anoka Hennepin is on the road to having a model youth program in place. With top-management approval, some strategic planning and goal-setting—and a realistic budget—you can be too. Remember, if you have limited resources, you can start small. As Schermerhorn says, “Just do it!”

Where To Go for More Information • Best of Adventures in Savings (elementary school activity book)—Search 27761 • National Credit Union Foundation—Search grants • National Youth Saving ChallengeTM • Nation Credit Union Youth Week • Thrive by FiveTM: Teaching Your Preschooler about Spending and Saving—Select Resources for Youth • Small Business Planner, U.S. Small Business Administration—Select Small Business Planner Credit Union Web Sites • A+ Federal Credit Union • Anoka Hennepin Credit Union • Arapahoe Credit Union • Boulder Valley Credit Union • Central Virginia Federal Credit Union • CES Credit Union • Erie Federal Credit Union • Isabella Community Credit Union • Michigan Catholic Credit Union • Northwest Federal Credit Union • OUR Credit Union • Texas Dow Employees Credit Union


Youth Program Design Template Basic Program Details • What is the credit union’s field of membership? What is the credit union’s asset size? What is your credit union’s median member age? • What are your credit union’s overall goals and how will this contribute to those goals? • Who is responsible for managing the program budget, promotion, educational components, evaluation, and planning? • Who is the target youth audience? What is the current membership information of the target group (e.g. number, share amount, products used)? • How will children and teenagers join the program? What will determine their eligibility to receive information and services? • What are your growth goals for program participation? How does your credit union compare to area peers? • What financial goals do representative youth have? What services do they tell you they need? • What current products are already in place that you can modify to fit the target group? What additional products might you need to introduce? What youth services are your competition and peers offering? • What policies do you need to change/update to accommodate current and new services for the target group? • What are the procedures to implement new products and/or policies? (i.e. board approval, database requirements) • What current advertising method(s) does your credit union use and what are the limitations/opportunities for new marketing methods? • What methods will you use to evaluate the program? Sample Goals • Average membership age • Youth program membership • Youth program participation by component • Educational course completions • Youth service use • Youth savings • Youth creditworthiness • Marginal Contribution per Youth Member (See Chapter 9) • Continuation of active membership after age 18 • Marginal Contribution per Adult Member

3. Review necessary program products a. Review current policies and procedures to ensure they match the products being delivered to the target group b. Obtain approval for necessary changes in products, policies, or procedures c. Review system requirements for supporting above changes d. Review the opportunity to tie rewards to use of products/ rewarding loyalty e. Review penalties (e.g. the credit union match on a special savings account is forfeited if a withdrawal is made for something other than the original purpose of the account) 4. Create marketing plan for delivering the message to members a. Calendar (to include timeline for marketing message delivery as well as any events associated to the program) b. Audience c. Media d. Incentives (e.g. get a $5 deposit when you join before the end of the month) e. Budget 5. Determine collateral program materials a. Brochures b. Signage c. Seminar material d. Additional materials (e.g. passbooks, one-on-one “counseling” checklists, giveaways, educational products such as Googolplex, etc.) e. Web site information f. Budget 6. Determine accountability a. What system will be used to track success? b. What components will be tracked? d. How often will the growth be reviewed? 7. Train staff a. Cultural/generational differences b. Value to the credit union (relate to Goals above) d. Program components d. New policies/procedures 8. Plan for future developments Source: Anoka Hennepin Credit Union.

Action Steps (including person responsible and completion deadline for each step) 1. Name program and components 2. Determine program requirements a. Eligibility b. Procedure to join d. Educational requirements, if any (e.g. attend a seminar to become eligible to apply for a credit card)

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M O D E L Y O U T H P R O G R A M G U I D E 117


Youth Program Budget Item List Outline of general expense itemsâ&#x20AC;&#x201D;add or delete as applicable, expand with detail as needed.



Staff salaries and benefits


Office overhead


Staff transportation

Mileage, rental car

Youth transportation

Bus, van

Member and prospective member incentives

Rewards for joining, saving, completing coursework, or service use

Volunteer support

Training, thank-you recognition

Presentation incentives

Rewards for participation, prizes, plaques, certificates

Presentation materials

Visuals, activity supplies

Off-the-shelf programs

Programs for classroom, seminar, or Web use


Food and beverages for participants and volunteers

Advertising, promotions for education

Design, production, distribution

Advertising, promotions for products and services

Design, production, distribution (may be part of general marketing budget)

Printing and photocopying

Newsletters, posters, handouts, classroom materials, brochures, booklets


Newsletters, special offers, course mailings


Newsletters, public relations

Web site

Youth-specific educational content, freelance writing, site design and programming

School support

Teacher and administrator incentives, donations to school, special tools such as calculators


Selection, funds for dispersal


Selection, appearance expenses, compensation

In-school branch operations

See Chapter 5

Youth advisory panel

See Chapter 6

Special events

Youth Week, annual meeting participation, contests

Community partner support

Speaker honoraria, meetings, recognition


Surveys, focus groups, program evaluation

Staff education

Conference attendance/travel, books, webinars

Lobby displays and equipment

Computer, signs, information rack

Capital expenses (amortized)

Presentation equipment, camera, laptop, peripherals

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Scholarship Application Scholarship Overview:

Boulder Valley Credit Union will award an annual scholarship in the amount of $1,500 and two scholarships in the amount of $1,000 to high school seniors in their quest for higher education. The scholarship award is based on high school academic standing, school/ community involvement, and financial need. Qualifications: Applicant must be a member of Boulder Valley Credit Union in good standing. If you are not a member, you can join! Contact the credit union for membership information. Applicant must be a Spring 2008 High School Graduate with a minimum 2.5 cumulative high school grade point average (GPA). Applicant must have already been accepted at a college or technical school within the United States and must begin school as a full-time freshman in the Fall of 2008 with a minimum of 12 credit hours per quarter. Verification of acceptance must be provided with completed application.

Additional Information: Applicant may be requested to interview with the Review Committee. Review Committee may include the following: a BVCU staff member, elected volunteer, a member at large, or a teacher from the Boulder Valley or Estes Park School Districts. Scholarship applications will be reviewed and awarded within 30 days of deadline date. The Review Committee's decisions are final. Scholarship funds awarded will be payable for tuition and books, and will be made payable to the college or technical school by Boulder Valley Credit Union. Winners agree to have name/photo p u b l i s h e d i n B o u l d e r Va l l e y publications and website. Employees or elected volunteers of Boulder Valley Credit Union AND their immediate family members are not eligible. Completed application form and all supporting materials must be received by Boulder Valley Credit Union, Attn: Public Relations Department (at any one of our branches) by April 11, 2008. Arapahoe Branch 5505 Arapahoe Ave. Boulder, CO 80303

Broadway Branch 2667 Broadway Boulder, CO 80304

Louisville Branch 800 Coal Creek Cr. Louisville, CO 80027

Estes Park Branch In Stanley Village PO Box 4049 Estes Park, CO 80517

See additional information on back panel.

Win a College Scholarship!

Scholarship Application Entry Deadline April 11, 2008

Visit or call 303-415-3504 Printed on Recycled Paper.

Source: Boulder Valley Credit Union (page 1 of 2).

Planning Logistics and Budget

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Application Checklist Please make sure that you include the following when submitting your completed application. Applicant must complete the adjacent BVCU official application form. Applicant must list all extracurricular activities (school, religious, community, and sports). Include clubs, honors, awards, offices held, etc. Applicant must submit official, sealed, high school transcript (obtained from your counselor) including SAT or ACT scores. Applicant must have two detailed letters of reference (on letterhead) from any of the following: teachers, counselors, school administrators, job supervisors, or coaches (no relatives please). Applicant must submit a typed, double-spaced brief explanation on why you are applying for this scholarship and a 250-350 word essay on one of the following topics. Grammar, content, clarity, and overall presentation will be taken into consideration. -Explain the value of credit union membership. -Explain how Boulder Valley Credit Union has assisted you or your family. -Explain how the credit union philosophy of â&#x20AC;&#x153;People Helping Peopleâ&#x20AC;? helps our communities. Note: Please visit or contact BVCU's Public Relations Department at 303-415-3504 for questions or to research answers .

Boulder Valley Credit Union Scholarship Application For High School Seniors for Undergraduate Continuing Education (Applicants must meet qualifications outlined in this brochure.) Full Name: ________________________________________________________________________ Address: __________________________________________________________________________ City, State, Zip Code: ________________________________________________________________ Social Security Number: __________________ Brith date: ___________ Sex: ___Male ___Female Home Telephone Number: ____________________ Alternate Phone Number: ___________________ Father's Name and Occupation: ________________________________________________________ Mother's Name and Occupation: ________________________________________________________ Name of High School: ________________________________________________________________ High School Address: ________________________________________________________________ Date of High School Graduation: _______________________________________________________ College Major or Area of Study: ________________________________________________________ Are you a member of Boulder Valley Credit Union? _____ Yes (Applicant MUST be a member of Boulder Valley Credit Union in good standing). If you are not currently a member, please join before submitting your application. Please contact the credit union at 303-442-8850 for membership information. Are your parents (one or both) members of Boulder Valley Credit Union? _____ Yes ____ No I certify that all information provided is truthful and complete and that withholding pertinent information or providing false information is unlawful and may lead to disqualification. It is my responsibility to notify BVCU if any changes of the above information prior to the deadline date. All applications materials will be held confidential by BVCU and become the property of BVCU. BVCU will only use your information for the purpose intended. Signature ___________________________________________________ Date __________________ Parent Signature _____________________________________________ Date __________________ Return application and supporting documentation to any Branch location indicated on the back panel. Scholarship applications must be received by April 11, 2008. Please direct scholarship questions to our Public Relations Department at 303-415-3504 or

(page 2 of 2).

120 M O D E L Y O U T H P R O G R A M G U I D E

Sample Contest Announcement

Source: Michigan Catholic Credit Union

Planning Logistics and Budget

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Chapter 9

Action Checklist

3 Evaluating Program Effectiveness  

Figure out what outcomes you want from your youth programs, using measures such as savings balance, service use, etc. What numerical goals will tell you if you’ve achieved those outcomes? Determine how you’ll measure progress toward the goals (e.g., building activities into financial education classes that enable participants to demonstrate competence in the skills taught).

Track MC/M and other assessment measures over time and note changes as you build your youth programs. Are you keeping your coworkers, management, board, and, when appropriate, the media informed of your progress?

Track young members who participate in your youth programs into adulthood, and compare them in service use and MC/M to adult members of the same age who didn’t participate as minors.

Track changes in service use, punitive fees, savings growth, delinquencies, and objective measures of your young members progress toward full, active adult membership.

Decide whether evaluating program effectiveness requires collecting identifiable data from participants. If it does, become familiar with participant privacy rights. (See Resource List.)

Build assessment into each of your financial education programs. Include:

A satisfaction rating form for students to complete at program’s end

A pre-test of baseline knowledge, attitudes, confidence, and aspirations

A post-test of changes in knowledge, attitudes, confidence, and aspirations

A delayed (e.g. three-to-sixmonth) assessment of changed behavior—actions taken as a result of the program—or changes in financial condition. What do you expect of short-term results as measured by pre-test-to-post-test changes? How will you document longterm program effects?

assess the value of the business from your youth members.

Collect monthly data showing total loan interest paid per member minus total interest & dividends earned per member. Start calculating (Marginal Contribution per Member, or MC/M) to

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Model Youth Program Guide Best Practices & Proven Techniques

Chapter 9:

Measuring Progress and Success Summary Evaluation helps you measure your return on investment in financial literacy, telling you whether your credit union and your members are getting their money’s worth from your youth program.

Highlights u Including program evaluation into your youth program planning from the start is preferable to adding it after the fact.

u A financial education program can be effective for youth members on several levels: satisfaction, learning, action, and change in financial condition. Improving members’ lifelong financial condition, as indicated by such measures as net worth, is the ultimate reason for financial education.

u To evaluate youth program success, you have to know what effects you want your youth programs to achieve, determine how you’ll measure progress toward goals, and consistently use your measuring tools.

u Looking at statistics such as Marginal Contributions per Member can help you assess the “profitability” of members who participated in youth programs vs. those who didn’t.

u Developing programs for youth is a long-term investment for your credit union’s future growth. Be patient, and be willing to take some risk.


hink of the things that everyone “knows.” Everyone knows that you’re supposed to drink eight glasses of water a day. Everyone knows that April showers bring May flowers. Everyone knows that you feed a cold and starve a fever. (Or is it the other way around?)

And everyone knows that educating youth about personal finance is worth it. Demanding proof of this last belief wouldn’t be important if there were no costs involved, but financial education takes time and money. So while you might like to simply teach what you can, limited resources demand that you do so in the most cost-efficient way possible. You need to ask: Are your personal finance lessons and activities accomplishing what you hope and

intend? Are students acquiring the knowledge that they need to make effective financial decisions? And perhaps most important, are they changing their financial behavior in ways that will help them meet their obligations and reach their goals? Evaluation data: • Establish a baseline for your program against which to measure movement forward and provide objective evidence of progress and success. • Give you a way to report to management and board, and to support your educational budget requests. • Help you set and modify goals, create and improve programming, apply your resources most effectively, and become a better resource for your members. In short, evaluation helps you measure your return on investment in financial literacy. Are you—and your members—literally getting your money’s worth?

Fig. 9-1

Key Components of Every Financial Education Program Before the financial educator begins the program evaluation process, it is important to review the education program to make sure that it has all the key elements to function successfully. The following list contains the essential components necessary in a good program presented in either a formal or non-formal educational setting: • Identified target participant group • Identified financial education needs • Program objectives designed to meet identified needs • Educational materials and lesson plans chosen to achieve learning objectives • Delivery method chosen to facilitate participant access to educational materials • Inclusion of evaluation plan and data-collecting instruments • Trained financial educator to facilitate learning • Program monitoring plan to utilize evaluation data for building stronger programs Source: NEFE Financial Education Evaluation Toolkit. ©2007 National Endowment for Financial Education. Adapted with permission. M O D E L Y O U T H P R O G R A M G U I D E 123

Be Sure To Consider key education components when you shop for personal finance education programs. The Jumpstart Coalition’s “Best Practices for Personal Finance Education Materials” checklist can help you select appropriate teaching materials. (See Resource List.) This chapter will describe basic approaches to evaluating your youth program’s financial education efforts. It will, of necessity, be a simplified view. Readers who wish a more advanced discussion should start with the NEFE Financial Education Evaluation ToolkitSM. (See Resource List.) Commercially prepared lesson plans should provide their own evaluation tools, which you should use. If you select one that doesn’t or you design your own lessons, you’ll have to create your own assessment of effectiveness.

Part of the program from the start Retrofitting a building is more work and expense than including

the same features in the initial construction plans. Similarly, including program evaluation into your youth program planning from the start is preferable to adding it after the fact. You’ll identify better learning objectives if you subject each of them to the question of whether it’s important enough to test. You’ll design better lessons if you consider how you will test the most important content as you assemble it. Every financial education program has the same essential structure (Fig. 9-1). It’s possible, of course, to put a lesson together without conscious attention to evaluation details. But the chances are that the more attention paid to evaluation from the start, the greater the chances that a lesson will be successful. A lesson can be effective on several levels, depending on the outcome you’re aiming for. What effect do you hope to have on students’ satisfaction, knowledge, intention, or behavior? The “impact hierarchy” in Figure 9-2 shows the possible effects of instruction. Each of the four

Fig. 9-2

Impact Hierarchy Higher Levels RESULTS OF CHANGE (Long-term impact) TAKING ACTION TO CHANGE (Intermediate impact)


Planned end-results or improved socio-economic condition


Participants’ behavior/practice changes toward the planned direction

2 LEARNING TO CHANGE (Immediate Impact)

Participants’ change of Knowledge, Attitudes, Skills, and Aspiration (KASA) toward the planned direction


Participants’ levels of satisfaction with the program

Lower Levels ©2007 National Endowment for Financial Education. Adapted with permission. As the impact level increases, so does the potential objectivity and value of the information and the difficulty of collecting it.

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impact levels generates a different measure of “return on educational investment”—gains in satisfaction, learning, action, and financial condition. The higher the impact level you seek, the more complex, demanding, and meaningful the teaching challenge. Succeeding at the higher levels, however, has the potential to more profoundly improve students’ financial well-being. All four levels are valid and potentially useful, and might be employed in various combinations. The higher the level of impact that you can document, the stronger will be your claim for continuing the program. However, the higher the level, the harder it is to assemble evidence of change. The wisest course is to shoot for documenting improvement at the highest impact level that you can afford to assess. Each level calls for a different evaluation technique.

Level 1 impact— satisfaction Tracking satisfaction is a staple of the conference circuit. Everyone is familiar with speakers’ appeals to “fill out the evaluation form before you leave.” Session evaluation forms usually ask for a subjective rating of satisfaction with various aspects of the presentation, using a numerical rating scale. Common questions are “Was the information useful?” “Were the visual aids informative?” You can collect this information through interviews, but of course a paper form is more convenient. Data collection at Level 1 is simple, inexpensive, and usually easy. However, spending time constructing your evaluation form will pay off in more useable detail. Even though the question of whether students are satisfied with your program appears to be a simple one, a thoughtful satisfaction questionnaire can give you valuable information about how well

Be Sure To Follow these tips when constructing a satisfaction rating form: • Use rating statements, not questions. • Ask for a rating of one thing at a time. • Be specific. • Use an even-numbered rating scale. • Label the scale extremes neutrally. • Invite explanations of ratings with openended followup questions. • Keep it short. • Keep it anonymous. • Put rating numbers in perspective by looking for meaningful and significant differences of opinion. the students “liked” the materials and presenter. It also can measure students’ intention to take action as a result of the lesson—how they think they will use the knowledge they gained. Information from Level 1 evaluations is best used to refine lesson content, design, or delivery. You also can use the information to determine what to evaluate in Level 3.

How to—construct a satisfaction rating form Follow these guidelines for creating an evaluation form that asks students to rate aspects of your program. (See Sample “Program Satisfaction Survey.”) Ask students to rate their agreement or disagreement with statements. For many students, familiar with testing in school, questions (“Was X enough…?”) have the negative connotation of search-

ing for a right or wrong answer. Statements, on the other hand, give students a chance to express their opinions, which—let’s face it—most of us feel that we don’t get to do often enough. Ask for a rating of only one thing at a time. A statement such as “The session was complete and relevant to me.” doesn’t allow students to differentiate between information that was complete but not relevant or vice versa. Splitting the statement in two will generate ratings that pinpoint program weaknesses better. Be specific. A rating of agreement with the statement “Was the program worth your time?” will yield less-helpful information than asking “The credit history section of the presentation convinced me to check my credit report as soon as possible.” Use an even-numbered rating scale. An odd-numbered scale gives students an easy way out. Picking the middle value allows them to complete the form quickly without a lot of thought. An even-numbered scale, however, forces students to express a distinct opinion. Even the selection of a slight approval or disapproval rating, despite expressing only a mild commitment, is more helpful to you than “neither agree nor disagree.” Choose neutral adjectives for the numeric scale. You want it to be clear which is the positive and which the negative end of the scale. But labeling the extremes with neutral words such as “strongly agree” and “strongly disagree” (“highest” and “lowest”) avoids the vagueness of subjective labels such as “out of this world” and “waste of time.” Label the intermediate values of your scale carefully. Make sure that the terms you choose for the equivalent positive and negative values (e.g. “2” and “3” of a fourpoint scale) are themselves equivalent (e.g. “agree somewhat” and “disagree somewhat”). For scales of six or more points, it’s often enough to label the extremes and one other

Measuring Progress and Success

pair of equivalent values only. Provide space for students to explain the ratings they chose. Picking general rating numbers can stimulate students to provide detail in follow-up “open-end questions,” so called because they allow respondents to write whatever they want. For example, following the statement: “The explanation of the credit reporting system was understandable” with the open-end question “What more would you like to know about credit reports?” will generate better guidance for you than asking the open-end question alone. Says Jon Haller, CUNA’s director of market research, “Be selective, however, in how many open-ends you use and where you use them. Too many will give the impression that you’re asking respondents to ‘work too hard’ to help you out.” Keep it short. It’s tempting to be curious about all aspects of a presentation, from the quality of the presenter’s voice to the room temperature. But the more questions you ask, the easier you make it

Be Sure To Protect program participants’ privacy rights if you collect any identifiable data (See Resource List.) for someone to set your form aside to complete later, which is often the same as discarding it. Try to limit your evaluation questionnaire to a single page. Keep it anonymous. Students will be more forthcoming if you don’t ask for their names. Instead invite students to contact you if they’re willing to participate in a focus group or serve on a youth advisory panel. Keep rating numbers in perspective. Haller says, “Our research shows that two-tenths of a point difference on a 4-point scale does indeed indicate a meaningful difference in opinion. A difference of five-tenths of a point indicates a

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Level 2 impact—learning

clear difference.” Generally: • The wider the differences between program features in average overall ratings, the more confident you can be that one or the other aspects of your program is on the right track. (For example, if students as a group rate their satisfaction of Feature A as two full points higher than Feature B on a 4-point scale, you can be more certain that A is a favorite than if the difference were only two-tenths of a point.) • Differences in ratings from an individual student are more telling than differences in ratings between two students. (For example, if Student 1 rates his satisfaction of Feature A as 3.5 and Feature B as 3.3, you can be sure that Student 1 thinks more highly of A than B. But you have no way of knowing if Student 1’s 3.5 rating of A is stronger than a 3.3 rating of the same feature from Student 2.) • Differences over time should carry more weight than an immediate “snapshot” view of satisfaction with a single presentation. Consistently high or low overall ratings send a clear message about what’s working with your audiences.

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Placing satisfactions in context Of course, you want students to be satisfied with your program. If they aren’t, they’ll tune out, word will get around, and you’ll have a hard time attracting students in the future. Asking students for a “Level 1” assessment of satisfaction is a good idea because people generally want to give their opinions. Additional rating statements that require students to consider how they plan to apply what they learned will provide more valuable information. Construct these statements along the lines of “As a result of today’s program… • I plan to…(save more money/ improve my grades to qualify for a discount on auto insurance).” • I am confident I will be able to…(reduce my impulse buying/ talk to my parents about our family’s finances).” • I have a better opinion about… (credit unions/budgeting).” (See Sample “Program Satisfaction Survey.”) If students tell you that, by and large, they’re happy with your program, the next level of assessment will allow you to demonstrate that you’ve increased their knowledge as well.

Learning can be defined as changes in students’: • Knowledge (e.g. about how to write a check), • Attitudes (e.g. about saving money), • Confidence (e.g. about balancing a checking account), and • Aspirations (e.g. about demonstrating responsibility). Learning depends on many variables, from students’ socioeconomic backgrounds to the time of day and level of hunger. Identify variables that are beyond your control in your analysis of results. However, you can improve the variables that are within your control over time with information that you collect from a welldesigned set of questions. You can test for knowledge gained with exercises that require students to perform a skill, such as reconciling a checking account. However, the most common form of learning assessment is the multiple-choice quiz as a pretest/post-test. This method gives students the same quiz immediately before and immediately after your instruction. The pre-test provides a baseline measure of student knowledge, attitudes, confidence and aspirations; the post-test measures changes in that baseline state. You can repeat the post-test a few months later to see what changes students have retained, but maintaining contact with students and motivating them to respond one more time is difficult. A good test does more than help the teacher determine what knowledge the student possesses. It also should help the student. “A test should teach,” says Dr. E. Thomas Garman, professor emeritus of Virginia Tech University, president of the Personal Finance Employee Education Foundation, and coauthor of a respected college personal finance

textbook. (See Resource List.) “It should give students the opportunity to ‘connect the dots’ with the essential course content and in the process clarify and reinforce their understanding. In essence, a good test is the capstone of a portion of

How to Create an Effective Multiple-Choice Question Nearly everyone is familiar with the multiple-choice testing format. “Choose the correct answer: A, B, C or D.” This familiarity makes it seem that it’s a simple matter to create multiple-choice questions. However, there is a science to writing a good multiple-choice question, as Garman explains. “The main objective is to provide only one correct choice and that the students who know the whole subject well will answer this correctly. Next you need a distracter. This choice sounds good, looks good, tastes good, and will seem correct to the person who knows the subject but not very well. The most knowledgeable student will steer past the distracter and mark the correct answer. The third choice should be plausible but only just so. If it is too good a choice, then you have two distracters in the same question and that’s a bit too challenging. The fourth choice is something ‘in the ballpark’ that only the uninformed person might select. “Moreover, those who know the subject the best should correctly mark the right answer much more than others; that is the ‘A’ student. The person who knows the subject fairly well but not as well as the best will be drawn in by some of the distracters and score lower than the best. The persons who do not know the material well at all will score poorly. Those who know the least will prove it, so reward them accordingly. “The scores awarded, or shall we say, ‘earned,’ may be given with confidence when the multiple-choice questions in total comprise a good test. Finally, ask enough questions to fully cover the subject.” Garman cautions teachers to base test questions on the most important topics only. It’s tempting to construct a test around trivia or facts. “Sooner or later everybody who writes a personal finance test asks a question about the effect of changing interest rates on bond prices,” he says. “Who cares? Testers include that question because it’s obvious that the topic is ‘important’ and easy to write. But that piece of investment knowledge has almost nothing to do with the reality of investing decisions that the average consumer faces. Investors in bonds, a small minority of people, need that knowledge, of course. It would be much better to ask students to identify the primary reason for buying bonds, which is the expectation of a regular, predictable return in the form of interest.”

the educational process as well as a measure of comprehension of the subject.” (See Sidebar “How to Create an Effective Multiple-Choice Question.”) Garman cautions that testing can be effective only to the extent that the lessons it’s based on are similarly effective. He says, “Even before we can ask if a test measures knowledge of the content taught, we have to ask ourselves, ‘Are we teaching the right content?’ “ Here are some more testing guidelines. (Also see Resource List.) Create questions that test ONLY what you want to test. You want to be sure that you’re measuring exactly what you intend to measure. This requirement is known as test “validity.” First of all, take your time writing the questions. Try them out on coworkers to discover ambiguities and other problems. Examine students’ responses to improve questions that seem to be confusing. If you change your lesson, remember to change your test. If you’re really serious about Level 2 testing, call the education department of a nearby university to see if a college instructor might help you design a valid test as a class project. Require “higher-level” thinking. For example, the following three questions cover the same subject, but place increasing demands on the student to demonstrate knowledge: • Weakest (asks only for rote memorization): What economic principle states that the price of a product depends on the amount of it there is for sale and the number of people who want to buy it? A. The Law of Supply and Demand B. The Pricing Law C. The Principle of Inflation D. The Business Cycle • Better (asks to identify cause and effect): What happens to a commodity’s price when its supply declines? A. The price increases. B. The price decreases. C. The price stays the same.

Measuring Progress and Success

D. The effect on price is unpredictable. • Best (asks to apply knowledge to the real world): Which of the following events in one oil-producing country is most likely to benefit oil producers in other countries? A. Destruction of a major exporting facility. B. Peaceful transition to a new government. C. Opening of a large, new oil field. D. Discovery of a cheap energy alternative. Provide believable “distractors” (incorrect options). Although some distractors might be easier to rec-

Be Sure To Follow these tips when constructing a multiple-choice quiz: • Focus on the most important information. • Make sure your questions test what you want. • Require higher-level thinking. • Write credible false choices. • Make sure there’s only one correct answer. • Avoid questions that ask “Which is not…?” • Avoid “All of the above” or “B and C” options. • Avoid “tipping off ” the correct answer by its length or position. ognize than others, avoid outlandish choices. Avoid the “Which is NOT” question. Students can identify a false option without knowing the correct answer. Avoid the “All of the above” option. Students don’t need to know all the correct answers, only two. Avoid the double answer option (e.g. Both A and C.). The complication that this construction adds through confusion interferes with the measurement of knowledge. Avoid making the correct answer unusually long or short. A difference in length can make the correct answer “stand out.” Avoid ambiguous options and language errors. Ask coworkers to

M O D E L Y O U T H P R O G R A M G U I D E 127

proofread your quiz before using it. Spread the position of the correct answer around. Test writers tend to place the right answer in the middle positions (e.g. B and C of four options). Make sure that you have only one correct (or clearly best) answer. Ask coworkers to “troubleshoot” your quiz. Most program assessments go no further than measuring learning through the pre-test/post-test method. There is a growing recognition, however, that learning is often short-term, and doesn’t necessarily result in meaningful behavior change. Behavior depends on acquired knowledge, attitudes, confidence, and aspirations. But unless students act on what they’ve learned, they won’t improve their financial position.

Level 3 impact—action The proof of financial education is in the living. Your students

must apply the knowledge they’ve learned, and the degree to which they do so successfully is the most meaningful measure of your program’s effectiveness. There are many actions your students take as a result of what they’ve learned through your program. You’ll find some information in your credit union’s database. For example: • Increase in money saved. • Increase in services used. • Decrease in overdrafts. You can collect other facts through member surveys. For example: • Maintenance of a regular budget. • Regular use of comparison shopping techniques. • Improved communication with parents about family finances. Figure 9-3 shows an example of a financial behavior survey question. The simplest kind of evaluation counts the effects that we can rea-

Fig. 9-3

Example of a Question about Financial Behavior For each financial practice, please circle the number that best describes your current behavior. I am not considering this

I am considering this

I am doing this sometimes

I am doing this most of the time

I am doing this all of the time

1. Save money regularly.






2. Keep track of spending.






3. Pay bills on time every month.






4. Reduce personal debt.






Financial Practice

sonably assume are the results of a cause. For example, if you see a significant rise in the number of loan applications and approvals following a loan promotion, you can be reasonably certain that the promotion was effective. You can increase your certainty further by ruling out other effects. Or, you can send two different loan-marketing pieces to two groups of prospects, each with a different contact number, and count the number of calls for each. It’s also a good idea to ask borrowers if the promotion was what led them to apply for a loan. To fully measure Level 3 impact, you need to know what’s going on behind the scenes. For example, after a lesson in interest compounding, you see that none of the students have purchased CDs. Is it because they didn’t understand the compounding principle enough to see the advantage of CDs? Or was it because the process of buying a CD was too complicated or inconvenient? Looking for obstacles is important in Level 3 evaluation. Understanding them gives you the opportunity to redesign a service or design a completely new one that better meets the needs of current and potential youth members. In many cases, it might be enough to simply track changes in member activity. How did what the students learn increase their service use or other behavior?

©2007 National Endowment for Financial Education. Adapted with permission.

What works— tracking activity

Fig. 9-4

National Youth Saving Challenge Results


Credit Unions participating

Total Saved






Average Saved

Young Savers

Young Savers/CU

New Accounts




































128 M O D E L Y O U T H P R O G R A M G U I D E

New Accounts/CUw

Activity tracking is a fairly easy, if relatively crude, evaluation tool that should be in every marketer’s toolbox. It’s sophisticated enough for most evaluations. For example, Figure 9-4 shows national results for CUNA’s annual National Youth Saving Challenge. The overall Saving Challenge numbers show nationwide growth in participating credit unions,

Fig. 9-5 Example of a Question about Financial Condition Please indicate how the following numbers have changed for you personally since completing the program.


Stayed about the same


Amount of change, if any (% or $)

Monthly income

[ ]

[ ]

[ ]


Monthly expenses

[ ]

[ ]

[ ]


Amount saved monthly

[ ]

[ ]

[ ]


Current credit card debt

[ ]

[ ]

[ ]


Very Dissatisfied How satisfied are you with this change?


Very Satisfied 2


Not at all Confident How confident are you that the program is responsible for this change


participating youth, and new youth accounts. The increase nationally between 2007 and 2008 in savers and amount saved per credit union while the number of credit unions remained steady is interesting and gratifying. However, given the number of variables that could have led to new saving “records,” a definitive explanation would be difficult. Of much greater interest in terms of program success is the flattening of the participation curve. Individual credit unions might have more success analyzing their specific results. In 2007, Marty Kelly, senior vice president of marketing and business development at US Federal Credit Union, Burnsville, Minn., knew that he should have formal performance measures in place for his youth program, but was having trouble finding the time to get started. “CUNA came to the rescue with that,” he says. “Its National Youth Week initiative requested that participating credit unions set goals for the week and it was a nice discipline for us. We figured it out, and then communicated the goals to frontline

4 Very Confident




staff so everybody could get behind them.” Without the benefit of US Federal’s history, and using national averages, Kelly and staff set their 2007 National Youth Week goals as follows: • Number of youth making deposits: 500 • Number of new youth accounts opened: 50 • Total dollars deposited by youth: $5,000 But when the actual numbers came in at the end of Youth Week, they were surprised to see: • Number of youth making deposits: 376 • Number of new youth accounts opened: 70 • Total dollars deposited by youth: $74,694 The results were a reminder that youth programs aren’t always about youth. “The classic wisdom states that there are three youth markets,” Kelly says. “The first is the young person today, the second is the future business you hope to get as that young person gets older and needs a wider array of services. The third

Measuring Progress and Success

market is the parents and grandparents. Our 2007 Youth Week results showed that the parents were responding to the campaign, likely to a greater extent than our young audience. I’m okay with that. In fact, I prefer it. We need credit union and savings advocates out there, and I can’t think of a better one than Mom or Dad.”

Level 4 impact— financial condition Improving your members’ lifelong financial condition, as indicated by such measures as net worth, is the ultimate reason for financial education. Level 4 impact involves considerable factors that you cannot influence, such as economic developments and government policy. It also is more meaningful to the lives of adults, and therefore has less direct applicability to youth program evaluation. If you decide to gather information about students’ financial condition, Figure 9-5 shows an example of a survey question. Your students’ financial condition as adults is far removed from learning acquired through your youth program. But although you can’t prove that your lessons on interest compounding caused your students to achieve a comfortable retirement, you can establish persuasive correlations over time. The state of financial well-being that your young members ultimately achieve will be partly the result of productive use of your services. Let’s take a look at a typical new member named Emma.

What works— consider Emma’s future Emma is unemployed with no immediate job prospects and drives a four-wheel vehicle without an engine. Her financial assets consist of a savings account with a balance of $420. None of her personal items

M O D E L Y O U T H P R O G R A M G U I D E 129

is worth more than $200, and they all show signs of heavy use. Oh, yes, she’s two years old1. Given these facts, what’s your estimate of Emma’s value to her financial institution? If your answer is about $500, you must be a heartless banker. Or you’ve never taken a human resource economics course and learned to determine the value of future income streams. The truth is that Emma is likely to earn more than $1 million of income in the future. Don’t underestimate Emma’s future economic value to the financial institution fortunate enough to garner her business. She’ll soon be a saver, borrower, investor, and transaction generator. Consider the financial products and services Emma might use by the time she’s 30. Figure 9-6 depicts a sample of her future financial needs and major events that trigger financial activity. Remember, these are Emma’s financial needs before she reaches age 30. Hopefully, her credit union relationship will last long beyond that. The lesson to be learned from Emma is that tracking your members’ service use will help you paint a picture of how your relationship with them develops over time. Do the young members who graduate from your youth program grow into 130 M O D E L Y O U T H P R O G R A M G U I D E

the services listed in Figure 9-6? Are you able to keep them confident and happy? And while supplying them with the financial services and assistance they need today, are you building a relationship that will fulfill the full potential of their future business? Do you see them gaining the wealth that will sustain them in retirement?

How to—measure member “profitability” You won’t know unless you institute procedures to paint a picture of your business relation-

ship with them. In recent years, data processors have built sophisticated software programs to create Marketing Customer Information Files (MCIFs), which can analyze the membership records of entire credit unions. This analysis generates a “profitability” measure for each individual member and for user-defined member subgroups. A detailed examination of the topic of MCIF software is beyond the scope of this guide, and consequently better left for you to discuss with your data processor. An MCIF is powerful, but can be expensive and cumbersome. Instead, here’s a simpler measuring tool that you can use to begin mining your member database. Despite the seemingly common sense nature of stories like Emma’s, conventional wisdom says that young members cost credit unions money. Fortunately, conventional wisdom doesn’t always know what it’s talking about. The following statements are all true: A. In the short run, most members under age 18 are a net expense to the credit union. B. As adults, most members now under age 18 will add more in revenue than they subtract in expense. C. As adults, some members now under age 18 will contribute greater

net revenue than their age-mates who didn’t join until after age 18. D. Nobody knows quite why C is true. Few credit unions have challenged conventional wisdom on the supposed “unprofitability” of youth accounts. Even the most ardent youth advocates acknowledge that they believe youth accounts generate more expense than revenue. Some credit unions, such as the $1 billion University of Wisconsin Credit Union in Madison, currently use a member “profitability” statistic in strategic planning. UWCU calculates profitability values by subtracting the savings interest and dividends flowing out to members from the loan interest and fees coming in from members. A positive result (the credit union receives more money than it pays) is a sign of a net borrower. A negative result (the credit union pays more money than it receives) indicates a net saver. UWCU management and board consider this profitability data as a measure of the average member’s effect on the credit union’s balance sheet. Groups of members with a negative profitability value (the

Figure 9-8

Marginal Contribution per Point Plus Member By Current Age and by Age When Joined $180 160 140 120 100 80 60 40 20 0 -$20

$154.59 $147.42



By Current Age

By Age When Joined 18+

<18 Source: Point Plus Credit Union, for period 1/1/7 to 9/30/7.

savers) provide funds for growth, while the profitability value for the entire membership indicates the degree to which UWCU borrowers add to accumulated earnings. At UWCU, the overall profitability value per member is the annual gauge of the cooperative’s health, which directly benefits the entire membership. UWCU’s calculation includes fee revenue. “Although the calculation can be a useful tool for measuring

annual progress in overall profitability, you could say that including fees in the formula compromises its value as a tool for assessing young members’ revenue contributions,” says Steve Rick, a UWCU board member and CUNA economist. “That’s because many fees, such as NSF charges, are punitive.” If you’re teaching young members not to overdraw their accounts for example, NSF revenue should decline over time.

Figure 9-7

Marginal Contribution per Member (Average Loan Interest Members Paid Minus Average Interest & Dividends Members Earned) $250 $197

200 $145

150 100 $67

50 $0








$202 $182










Point 50100Plus 100.0 200.0 CU ($39) Asset Range (Millions)

200500- $1,000+ Overall 500.0 1,000.0

Source: Credit Union National Association, Point Plus Credit Union, for period 1/1/7 to 9/30/7.

Measuring Progress and Success

M O D E L Y O U T H P R O G R A M G U I D E 131

Marginal Contribution per Member Presumably a comprehensive youth program with an educational component would produce morefinancially-literate adult members who make better money management decisions. They’d be more likely to avoid punitive fees, thereby reducing total revenue. Mostly for that reason, the simple formula below does not include fees: Marginal Contribution per Member = Loan Interest Paid per Member – Interest & Dividends Earned per Member Remember, a net borrower will generate a positive result in the calculation above. A net saver will yield a negative result. Comparing two borrowers, the one with the greater positive result is the better borrower. Comparing two savers, the one with the greater negative result is the better saver. Credit unions need both kinds of members to survive. However, a credit union whose entire membership fails to generate an overall positive result must depend on investments, fees, and cost-cutting to stay in business. With the help of the $36-million Point Plus Credit Union in Stevens Point, Wis., the Marginal Contributions per Member (MC/M) can begin to shed light on young members’ hidden profitability.

Overall Marginal Contribution per Member Figure 9-7 shows the MC/M for all credit unions by asset size for January through September 2007. As you can see, for the most part MC/Ms rise steadily as credit unions become larger (except for the $1 billion-plus credit unions). It’s tempting to conclude that the positive correlation between credit union asset size and MC/M is due to economies of scale. But the 132 M O D E L Y O U T H P R O G R A M G U I D E

MC/M does not include operational expenses, so efficiencies are not a factor in this trend. Rather, as credit unions become larger, they tend to offer more sophisticated investment instruments that attract more member deposits. These make possible larger, more profitable loans, and higher MC/Ms. Figure 9-7 shows how the overall MC/M for Point Plus compares to credit unions in the same asset range ($20 million to $50 million). Point Plus’s average member contributes less net revenue than the average member of similar-size credit unions.

MC/M by current age and by age when joined Comparing MC/Ms for youth and adult members supports conventional wisdom. Clearly, young members as a group are a current drag on the Point Plus bottom line (Fig. 9-8). The fact that youth make such a poor showing compared to their elders is hardly surprising. After all, adults have significantly larger deposit accounts and millions of dollars in profitable mortgages and vehicle loans. But by not probing deeper than

this gross measure of “profitability,” credit unions dismissing the value of youth programs do an injustice to the revenue contributions youth make after age 18. Figure 9-8, which also compares members by the age at which they joined the credit union, reveals that those who became members as youth do indeed make a positive contribution as adults. At first glance, Figure 9-8 seems to reinforce the conventional wisdom that spending on youth doesn’t provide a sufficient return on investment in the short-term. However, that conclusion ignores the fact that adults of all ages who joined after age 18 include a wider, more financially diverse, range of individuals. Conventional wisdom begins to crumble when we examine groups of adult members in narrower age ranges.

MC/Ms of similar-age adults who joined as minors Figure 9-9 compares the MC/Ms of adult members in three narrow age groups by whether they once were youth members. Conventional wisdom predicts that the adult contributions of former youth

Figure 9-9

Marginal Contribution per Point Plus Member Aged 20 to 35 By Age When Joined $450


400 350 300 250 $178.63 $177.06



150 100

$78.18 $60.92

50 $0

Adults 20-25

Adults 25-30 Joined <18

Adults 30-35 Joined 18+

Source: Point Plus Credit Union, for period 1/1/7-9/30/7.

Figure 9-10

Interest Borrowers Paid & Dividends Savers Earned, Among Adults Aged 20 to 35 By Age When Joined $426

$450 400 350 300 250




200 150 100

$84 $63


50 $0

Borrowers 20-25

Borrowers 25-30

Borrower Joined <18

Borrowers 30-35

Borrower Joined 18+

$6.26 $1.88


$14.31 $7.25

Savers 20-25

Savers 25-30

Savers 30-35

Saver Joined <18

Saver Joined 18+

Source: Point Plus Credit Union, for period 1/1/7 to 9/30/7.

members never exceed that of their age-mates who joined after age 18. But former Point Plus youth members defy conventional wisdom by out-performing their age-mates in all three age groups—where the blue bars exceed the green in each age pair. In other words, MC/Ms of like adults show that members who joined when they were minors are a significant revenue source in the long run for Point Plus, better than their age-mates who don’t join until later. As Point Plus’s experience attests, youth can be worth pursuing and serving. Figure 9-10 goes a step further by displaying the income and expense factors that go into the Point Plus MC/Ms. In all three age groups, adults who joined Point Plus as youth (light blue bars) are better borrowers than their Point Plus peers who don’t join until later (dark blue). And Figure 9-10 also shows that all adults who joined Point Plus as youth (light green bars) are better savers than their fellow members of the same age who don’t join until later (dark green). The challenge is to identify the factors that cause these effects and learn how to influence them.

What MC/Ms suggest Preliminary marginal contribution analysis leads to the following conclusions: 1. Exploring youth “profitability” further is desirable. MC/M comparisons among more narrowly defined subgroups over time will help zero in on what specific programs are most effective in raising more “profitable” members. For example, how would graduation from a youth educational program affect the MC/ Ms of adults of the same age? This preliminary MC/M analysis reveals nothing about what might be influencing adult financial behavior. For example, did the adult members who joined the credit union as youth do so because their parents have influential characteristics in common? Did these adults’ longer relationship with the credit union lead them to go there for their financial needs before any other financial institution? It’s important to make a distinction between individual and group MC/Ms. A positive and growing overall MC/M is the sign of a healthy credit union. A credit union with a negative overall MC/M must

Measuring Progress and Success

rely on less-profitable investment income and less-popular fee income to stay in business. However, an individual member with a negative MC/M based on thousands of dollars in low-interest savings and checking accounts is quite valuable. Such a saver, who values liquidity over earnings, helps lower a credit union’s cost of funds. 2. Expanding service to youth can pay off now. One of the reasons current youth MC/Ms are lower than adults’ as a group is that youth often don’t have access to the number-one credit union money maker—credit cards. Finding a

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Age-Band Marketing When it comes to reaching young people, a one-size-fits-all approach isn’t the best use of your budget. That’s why Space Age Federal Credit Union, Aurora, Colo., targets every promotion, product, or service to groups according to their approximate life stage. In terms of youth, the credit union separates young members into four age bands. “We transition members seamlessly through the age bands,” says John Faries, the credit union’s vice president of accounting and marketing. He and his team have identified characteristics of each age band, with products and services likely to appeal. Here are the results he’s seeing. Up to 9 years old Generalities: Loves anything to do with technology, fearless, environmentally conscious. Ideal products and services: Share accounts, contests and games that encourage savings, financial literacy education. Results: 299 young people with total deposits of more than $300,000; two-thirds in share accounts, almost one-third in CDs, and a small amount in money markets; slightly more than one product per member on average. 10 to 14 years old Generalities: Very technologically savvy, growing up using cell phones and the Internet, more liberal than previous generations, trendy and social buyers. Ideal products and services: Share accounts, online services and activities, checking accounts with ATM cards, starter certificates, financial literacy education, newsletters. Results: 316 members with total deposits of more than $350,000, almost $5,000 in checking accounts. 15 to 17 years old Generalities: Also technologically savvy, with influence over many household purchases, trendy and brand conscious, impulse buyers. Ideal products and services: Add starter credit cards and small signature loans. Results: 245 members with total deposits of around $300,000 18 to 22 years old Generalities: Technologically savvy, very influenced by peers, trendy, hold many similar values as parents, global boundaries are transparent due to travel and Internet, impulse buyers. Ideal products and services: Add student credit cards, e-Services, small signature and automobile loans. Results: 531 members with total deposits of nearly $600,000 and total loans of more than $1 million—an average of close to two products per member. “By target marketing to each unique age band, Space Age Federal is able to better meet the unique needs of our members and reduce ‘unnecessary’ marketing costs by not advertising a product or service to a member who most likely has no interest in it,” says Faries.

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low-risk way of extending credit to qualified young members under parental supervision will automatically improve youth MC/Ms by raising interest income. An example of the kind of opportunity to look for might be with the more than onethird of school districts that accept credit and debit payments in their cafeterias2. On the other side of the balance sheet, college saving funds, for example, are a desirable way of building the assets that drive growth—and are relatively cheap to administer because they have few transactions. A youth program that invites grandparents to match young savers’ efforts could tap a potentially deep well of lower-cost funds. Credit unions that recognize the inertia of consumers to change providers will use their youth programs to lock members in for life. “All in all, these early MC/M data undermine the conventional wisdom that young members are a drag on a credit union’s performance,” says Rick. “Let’s continue to statistically question whether long-standing assumptions about the lack of a return on investment in youth are really true.” Here’s how to document that your youth program is having the effects you’re looking for.

First, know where you want to go You have to know what effects you’re looking for, based on your strategic goals. Here’s how Space Age Federal Credit Union’s John Faries does it. “We segment our membership by ‘age bands.’ There are four age bands for our youth members,” he says. “I have goals related to the youth age bands. That’s how important they are to our board.” (See Sidebar “Age-Band Marketing.”) The credit union’s management is graded on its results in serving youth. For the three youngest age bands combined, the goal is to

increase deposits by 0.5% to 2% per year. For college-age members, the goal is to increase products per member by two to three. “We’re focused on moving them from just checking to using more products— debit, bill pay, loans—so they consider us their primary financial institution,” Faries says. “We want to increase our number of youth members by one to two percentage points,” he continues. “It doesn’t sound like much, but people move out of one age band to another, so you have to pull in enough people to compensate for that before you can increase overall.”

Next, figure out how you’ll know when you’re there The next thing is to decide how you’ll measure progress toward goals. Erie Federal Credit Union, in Erie, Pa., uses its MCIF system to track components of its youth accounts, such as new accounts opened and overall profitability, against its goals. It also tracks the effectiveness of youth outreach efforts. “For example, during different education programs we’re involved in, we distribute $5 certificates to open new accounts, and then track the number of certificates redeemed,” says Sandy Carangi, vice president of business development. When it comes to youth marketing campaigns, there are many vehicles that can provide good

measuring tools, indicates Rick Foy, director of marketing communications at Sight Creative, St. Paul, Minn. “One of our credit union clients provides a toll-free ‘call-toaction’ number in all its marketing materials and counts the number of responses,” he says. “It’s very simple, but effective.” New member campaigns are easily quantifiable, he notes, as Carangi’s example illustrates. For direct marketing campaigns, you can track the response rates. “One firm I work with looks for a 3% to 4% return rate, which is excellent,” Foy says.

Then measure, measure, measure John Parfrey, director of the NEFE High School Financial Planning Program® says, “If you conduct an education program over and over and nobody realizes the learners never benefit from it, then the kinds of results we want to have happen simply don’t, and an opportunity is lost,” he says “That’s why it’s important for students to show they can competently apply the skills we’re teaching. Without that, we never really know if they’ve changed.” He notes that performancebased learning contains its own success metric—the student demonstrates competence. People who want a good measurement tool can customize NEFE’s free do-it-yourself online evaluation toolkit people to their education programs. “The tool may look daunting, but it’s really not. It was designed for the lay person to access and use,” Parfrey says. (See Resource List.) The NEFE toolkit has an online instruction manual. It emphasizes the importance of starting evaluation when you design an educational program, building in program objectives for learners and exercises that will allow them to demonstrate they’ve achieved the objectives. It also covers designing evaluation

Measuring Progress and Success

instruments, and collecting and using evaluation data to improve your educational programs as needed. But be careful of the “Hawthorne Effect,” cautions Lew Mandell, professor of finance and managerial economics and former dean of the school of management at the University of Buffalo. “It says that when you do any kind of education with people you get a brief change in behavior. It could be just because you’re paying attention to them. If you offer kids savings accounts and compare their knowledge and saving before and after, it’ll be more positive after.” The real question is what happens in five or six years. “When those kids become teenagers and want to fit in with friends who are spending, how will they behave? If you measure their adult behavior, will you have made any positive difference?” Measure short-term changes, Mandell recommends. “Then either track people in a panel study—keep re-interviewing them—or do a retroactive panel study like the Jumpstart Coalition for Personal Finance does. Measure current behavior and ask kids about the past: ‘Did you have a financial institution account in elementary school? Did you save weekly?”

Be Sure To Watch for the “Hawthorne Effect,” which predicts the students will show short-term improvement from educational intervention merely because you’re paying attention to them. You also need to look for positive effects that last.

While short-term measures are useful and necessary to check progress and to justify budget requests, remember that dedication to youth, and to making them good financial consumers, is really a lifetime commitment. Josh Jones, manager of young adult programs in CUNA’s Center

M O D E L Y O U T H P R O G R A M G U I D E 135

Resource List for Personal Finance, says, “With youth financial education, you are establishing a long term relationship with young members. Don’t let that relationship go to waste by not following up and actively serving their needs as they grow older. Even if your young members move away from home, and from your credit union, remote services can keep them in the fold. “Members aged 18 to 30 need you more than ever as they fast approach their prime borrowing years. Those between 18 and 30 are looking for services to meet a new set of needs, and will be desperate for information. “Want to know if your youth program is worth it?” Jones asks. “Then look at the young adults that graduated from it and compare them to their peers who didn’t. Do youth program grads save and invest more? Are their FICO scores higher and do they default less? The big picture that tells you the ultimate value of your credit union’s education of children and teenagers has to include a long view as well as a wide one.” Of course, sometimes the evidence almost jumps out at you. Delinquencies for members who participate in a credit union youth program tied to financial education are almost negligible. CP Federal Credit Union in Jackson, Mich., has had credit union youth programs combined with personal finance education for 17 years. Its average delinquency for members aged 18 to 25 is less than 0.1%, compared to the average delinquency of nearly 1% for members in the same age range who didn’t participate in youth programs. You can also expect better member loyalty as youth members grow up. Of people aged 18 to 34 who are credit union members, 46% say they consider the credit union as their primary financial institution3. 136 M O D E L Y O U T H P R O G R A M G U I D E

Finally, consider the intangibles Developing programs for youth is a long-term investment for your credit union’s future growth. Be patient, and be willing to take some risk. If more credit unions put greater effort into establishing relationships with the “Emmas” among their members, they’ll benefit for life. If not, the neglect will cost credit unions millions. But don’t forget the intangible benefits. Your youth program can be instrumental in developing goodwill in the community. It can substantiate the perception that credit unions are indeed serving the needs of people of all ages and incomes. It can reinforce the assertion that credit unions are an effective and necessary alternative for consumers of modest means. And it can help preserve the vision of the founders, who believed that member education was a cornerstone of the movement. As for individual members, the peace of mind that comes from assuming control of their finances is an essential benefit of your efforts on behalf of youth financial education and service. Earlier this chapter asked, “What is Emma worth?” Her parents and grandparents say she’s “priceless.” But the real answer for your credit union is: It’s up to you!

Where To Go for More Information • 14 Rules for Writing Multiple-Choice Questions—Search “14 Rules” • Best Practices for Personal Finance Education Materials, Jumpstart Coalition for Personal Financial Literacy—Select Best Practices • Children’s Online Privacy Protection Act (COPPA) • Institutional Review Board Guidebook (data collection and privacy rights), Office for Human Research Protections, U.S. Department of Health & Human Services • NEFE Financial Education Toolkit • Personal Finance, 9th ed., Raymond E. Forgue and E. Thomas Garman; Houghton Mifflin, 2008. Credit Union Web sites • CP Federal Credit Union • Erie Federal Credit Union • Point Plus Credit Union • Space Age Federal Credit Union • University of Wisconsin Credit Union • US Federal Credit Union


Program Satisfaction Survey Note that the suggested title invites the participant to respond. Remember, this form doesn’t measure what students learned, only what they thought of the learning event. Write questions about the facilitator and the session topics to match the subject and the age level of your audience. Use session objectives to modify “As a result of attending this program...” for other courses. After drafting your form, ask yourself: How will I use this information to improve future courses? If you plan a post-event follow up, be sure to ask for contact information so that you can compare immediate reaction to later action.

Tell us what you think about the course: How to Manage Your Checking Account/Debit Card

How did we do? Please take a few minutes and let us know what you liked about this program and what we could do to make it even better for others. • I have a checking account now.

[ ] Yes

[ ] No

• I have a debit card now.

[ ] Yes

[ ] No

Circle a number to show how much you agree or disagree with each statement. Strongly Disagree

Disagree Slightly

Agree Slightly

Strongly Agree

The facilitator: • Presented so that the subject made sense to me.







• Made the subject interesting.







• Persuaded me to balance my checkbook.







As a result of attending this program I plan to: • Immediately record my debit card spending.







• Make sure to account for all fees and deposits.







• Use phone balance and online access to track when withdrawals/deposits have cleared.







• Balance my checking account monthly.







Overall: • The course was useful.







• I would recommend this course to others.







• I plan to open a checking account within the next 3 months.







What else would you like to tell us about this course? What other money topics would you like to learn about? (Optional) Name_____________________________________ Email address______________________________________

Measuring Progress and Success

M O D E L Y O U T H P R O G R A M G U I D E 137


Survey of Behavior Change Are students who completed your course doing what you taught them? Actually testing the learning of your young students is the best measure of your teaching success. Because this is not always practical, asking for anecdotal information is one way to gather data that shows the transfer of classroom learning to real life behavior. Use your session objectives to create a behavior change form that measures what you plan to teach.

How are you doing since completing the course: How to Manage Your Checking Account/Debit Card

About three months ago you completed ABC Credit Union’s course “How to Manage Your Checking Account/Debit Card.” How is it going? Is your checking account in good shape? Please tell us what is working—and what isn’t—as you use your checking account and debit card. Your answers will help improve the course for others. Since completing the program: • How many checks have you written?

0 [ ]

1-2 [ ]

3-4 [ ]

5-6 [ ]

More [ ]

• How many times have you used your debit card?

0 [ ]

1-2 [ ]

3-4 [ ]

5-6 [ ]

More [ ]

• How many times have you overdrawn your checking account?

0 [ ]

1 [ ]

2 [ ]

3 [ ]

More [ ]

Circle a number to show how much you agree or disagree with each statement.

• I balance my checking account monthly.

Never 1





Always 6



Always 6


Very Confident 6

• If you don’t balance your checking account monthly, why not? (Check all that apply) [ ] No time [ ] No one to help me [ ] I didn’t understand my account statement [ ] Other (please describe) ____________________________________________

• I record all debit card purchases when I made them

• I feel confident that I’m managing my checking account accurately.

Never 1 Not at all Confident 1






• [ ] I’d like more help. Please have someone from the credit union contact me • Name:______________________________ Phone No.:__________________ Email: _________________________________

138 M O D E L Y O U T H P R O G R A M G U I D E

Model Youth Program Guide Best Practices & Proven Techniques

Where We Got the Numbers Why Financial Education? 1. The National Standards in K-12 Personal Finance Education, Jumpstart Coalition for Personal Financial Literacy, 2007. 2. 2007-2008 Credit Union Environmental Scan for Strategic Planning, CUNA Market Research. Median age of adult member 2006: 48 (up from 40 in 1985). Median age of adult nonmember 2006: 42. 3. CUNA Market Research, 2007. The percentage of members in their peak borrowing years—ages 25 to 44—has dropped by 17 percentage points over the past two decades, from 55% in 1996 to 38% in 2006. 4. CUNA Market Research, 2007. 5. Filene Research Institute. 6. CUNA Market Research, 2007. 7. YouthPulse, National Harris Interactive Study, 2003. “American kids, teenagers, and young adults, aged 8 to 21 years, have annual incomes totaling $211 billion…this group is spending at a rate of approximately $172 billion per year and is saving at a rate of $39 billion per year.”

students who say their parents did. About 70 percent of college students cite parents as their primary source of information.”

4. Jensen, Eric P., “A Fresh Look at BrainBased Education,” Phi Delta Kappan, Vol. 89, No. 6, February 2008.

12. Survey of Parents of College-Bound Freshmen, Sallie Mae, 2007.

5. The Media Family: Electronic Media in the infants, Toddlers, Preschoolers and their Parents, Henry J. Kaiser Family Foundation, 2006.

13. Student Debt and the Class of 2006, The Project on Student Debt, supported by The Pew Charitable Trusts and others. 14. Flynn, Ed and Bermant, Gordon; Chapter 7 Debtors—From 19 to 92, 2000. 15. Economic and Personal Finance Education in Our Nation’s Schools, National Council on Economic Education Survey, 2007. “Personal Finance, a newer subject in comparison with Economics, is now included, to at least some extent, in the educational standards of 40 states (up from 34 in 2004 and 21 in 1998). 28 states (up from 20 in 2004 and 14 in 1998), now require these standards to be implemented. Still, however, only 7 states require students to take a Personal Finance course as a high school graduation requirement (up from 6 in 2004 and 1 in 1998), and only 9 states require the testing of student knowledge in Personal Finance (up from 8 states in 2004 and 1 in 1998).”

6. Kunkel, D., Wilcox, B. L., Cantor, J., Palmer, E., Linn, S., Dowrick, P., 2004. Report of the APA task force on advertising and children, Section: Psychological issues in the increasing commercialization of childhood. American Psychological Association. 7. McNeal, James U., Ph.D.; The Kids Market Myths and Realities, 1999, Paramount Market Publishing. 8. The State of Credit Unions’ Member Financial Literacy Efforts, CUNA Market Research, 2007. 9. Annual Estimates of the Population by Five-Year Age Groups and Sex for the United States, April 1, 2000 to July 1, 2006 (NCEST2006-01). Population Division, U.S. Census Bureau. 17 May 2007. 10. U.S. Census Bureau, 17 May 2007.

16. McNeal, James U., Ph.D.; The Kids Market: Myths and Realities, 1999, Paramount Market Publishing.

11. 2007-2008 Credit Union Environmental Scan for Strategic Planning, CUNA Market Research.

17. Bank Director, Board Member Inc., Fourth Quarter 2006.

Chapter 2: Teaching to Spend, Save and Manage Money

9. Financial Literacy Communication Gap Among College Students and Parents, The Hartford Financial Services Group, Inc., , February 2007: “Less than onequarter of students (24 percent) and only 20 percent of parents say students are very well prepared to deal with the financial challenges that await them after graduation.”

18. Operating Ratios & Spreads, CUNA Economics & Statistics, year-end 2006.

1. McNeal, James U., Ph.D.; The Kids Market Myths and Realities, 1999, Paramount Market Publishing.

10. The Hartford Financial Services Group, Inc., February 2007: “Moreover, more than three -quarters of students (76 percent) wish they had more help preparing for their financial future.”

Chapter 1: What Makes a Youth Program Effective

8. Teens & Money, Charles Schwab and Boys & Girls Clubs of America, 2007. Teenagers with a savings account, 60%; ATM/debit card, 29%; checking account, 26%, credit card in his or her own name, 10%.

11. The Hartford Financial Services Group, Inc., February 2007: “Nearly two-thirds (63 percent) of the parents surveyed say they definitely see personal finance education as their responsibility and consistently make the effort to teach their children about it, compared to the only 41 percent of

19. Cook, Victor J., Jr.,Ph.D.; Larreche, Jean-Claude, Ph. D.; July 8, 2007 blog. “While Citibank reported spending even more—$2,577 million—on ‘Advertising and marketing expenses’ in the four quarters ending March 31, 2007…”

2. Charles Schwab Teens & Money 2007 Survey, Charles Schwab & Co. and Boys & Girls Clubs of America. 3. Charles Schwab & Co. and Boys & Girls Clubs of America, 2007. 4. Charles Schwab & Co. and Boys & Girls Clubs of America, 2007.

1. 2008 Survey of Personal Financial Literacy Among High School Students, Jumpstart Coalition for Personal Financial Literacy.

5. 2006-2007 Credit Union Environmental Scan for Strategic Planning, CUNA Market Research.

2. Jumpstart Coalition for Personal Financial Literacy, 2008.

Chapter 3: Teaching to Borrow

3. Mandell, Lewis, Ph.D., for the Credit Union National Association, Inc., 2006.

1. Youth and Adult Personal Finance Survey, CUNA Market Research, 2005. M O D E L Y O U T H P R O G R A M G U I D E 139

2. Charles Schwab Teens & Money 2007 Survey, Charles Schwab & Co. and Boys & Girls Clubs of America. 3. Charles Schwab & Co. and Boys & Girls Clubs of America, 2007.

6. Bridge Ratings Youth Audience Media Use Study 2007, Bridge Ratings & Research. 7. Top social networks for engagement — some surprises!, Lightspeed Venture Partners, July 23, 2007.

4. U.S. Census Bureau, 2002. 5. Bhattacharya, Radha, “Unbanked Hispanic Community: Implications for the Banking Sector,” Journal of Commercial Banking and Finance, 2006.

4. 2008 Survey of Financial Literacy Among High School Students, Jumpstart Coalition for Personal Financial Literacy.

8. Kantrowitz, Jamie, April 2006 speech. 9. Bridge Ratings & Research, 2007.

6. Hispanics Today 2004 Overview, Hispanic Association on Corporate Responsibility, Media Center.

Chapter 4: Working With Schools

10. Pew Internet & American Life Project, 2007.

Chapter 8: Planning Logistics and Budget

11. Insight Express, 2007.

1. 2007 Financial Literacy Survey, CUNA Market Research.

1. 2008 Survey of Financial Literacy Among High School Students, Jumpstart Coalition for Personal Financial Literacy. 2. 2007 NYIB Annual Report, National Youth Involvement Board. 3. Occupational Outlook Handbook, U.S. Department of Labor, Bureau of Labor Statistics, 2008. Chapter 5: Student-Run In-School Branches 1. CUNA Center for Personal Finance, 2007. Chapter 6: Communicating with Youth 1. Computer and Internet Use in the United States, U.S. Census Bureau, Current Population Reports, Department of Commerce, October 2005. 2. U.S. Postal Service, 2001. 3. Jupiter Research, 1999. 4. 2007 Global Attitudes Survey, Pew Research Center. 5. Teens and Social Media, Pew Internet & American Life Project, 2007.

12. Young Net Surfers Are Tomorrow’s Prime Financial Consumers, Forrester Research, October 26, 2000. 13. Forrester Research, 2000. 14. Pew Internet & American Life Project, 2007. 15. Pew Internet & American Life Project, 2007. 16. Castronova, Edward, Exodus to the Virtual World, January 7, 2008 podcast. Chapter 7: Youth Outside the Mainstream

Chapter 9: Measuring Progress and Success 1. Hoel, Bob, Ph.D., “What is Emma Worth,” Savingteen, a supplement to Credit Union Magazine, January 2003. 2. “Just Put it on My Tab!,” School Nutrition, School Nutrition Association (formerly American School Food Service Association), January 2003. 3. 2006-2007 National Member Survey, CUNA Market Research.

1. U.S. Department of Housing and Urban Development, 2007. 2. U.S. Census Bureau, 2008. 3. An Assessment of Hispanic Homeownership, Congressional Hispanic Caucus Institute, 2005. “The homeownership rate for Hispanic or Latino families has risen from 41.2 percent in 1994 to 48.1 percent in 2004. Despite this gain, owner rates remain far below the 76.0 percent rate for non-Hispanic white families.”

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Acknowledgments The editors thank the following people for their insight, advocacy, and leadership on behalf of the cause of financial literacy. LeAnn Achtenberg, DE, DEUK, Anoka Hennepin Credit Union; Dawn Ambuehl-Sadek, A+ Federal Credit Union; Madeline Anderson, Bellwether Community Credit Union; Dan Apfel, National Federal of Community Development Credit Unions; Jill Banning, Regional Federal Credit Union; Carol Bayreuther, Hartford Healthcare Federal Credit Union; Dallas Bergl, INOVA Federal Credit Union; Mary Beth Borroni, FedStar Credit Union; Tammy Bowling, Bayer Federal Credit Union; Musette Bracher, GECU; Leigh Brady, State Employeesâ&#x20AC;&#x2122; Credit Union; Patty Browne, DE, Arlington Virginia Federal Credit Union; Sandi Carangi, Erie Federal Credit Union; Rebecca Caron, Michigan Catholic Credit Union; Steve Carr, Boulder Valley Credit Union; Mark Condon, CUNA Research and Advisory Services; Stella Contreras, A+ Federal Credit Union; Noelle Conzelmann, Frankenmuth Credit Union; Stan Cowan, A+ Federal Credit Union; Kathy Crim, DE, Texas Dow Employees Credit Union; Rena Crispin, CUNA Center for Personal Finance; Amy Rae Crowe, DE, Great Wisconsin Credit Union. Joe Cummins, Alternatives Federal Credit Union; Jeremy Cybulski, Community Choice Credit Union; E. Thomas Garman, Ph.D., Personal Finance Employee Education Foundation; Dick Ensweiler, DE, Texas Credit Union League; Rose Evers, DE, OUR Credit Union; John Faries, CPA, DE, Space Age Federal Credit Union; Jean Floyd, Neighbors Federal Credit Union; Keri Foretich, Keesler Federal Credit Union; Rick Foy, DE, Sight Creative; Randy Gailey, Horizon Utah Federal Credit Union; Larry Garcia, El Paso Affordable Housing CUSO; Helen Godfrey-Smith, DE, Shreveport Federal Credit Union; David Gorham, Apple Federal Credit Union; Greg Gruber, Bayer Federal Credit Union; Tricia Hale, Ohio University Credit Union; Jon Haller, CUNA Market Researach; Jim Hanson, DE, CUNA Center for Personal Finance; Heather H. Harris, DE, Isabella Community Credit Union; Kelly Hatler, DE, CP Federal Credit Union; Bob Hoel, Filene Research Institute; Kerry Humphrey, USDA Farm Service Agency; Nancy L. Granovsky, CFP, CFCS, Texas Cooperative Extension.

Rodney James, PrimeWay Federal Credit Union; Elizabeth Janowski, STAR Credit Union; Josh Jones, DE, CUNA Center for Personal Finance; Marty Kelly, US Federal Credit Union; Julie King, Harvest Federal Credit Union; Elizabeth Kiss, Ph.D., Purdue University Cooperative Extension; Karin Kovalovsky, Air Academy Federal Credit Union; Monti Laslo, Library of Congress Federal Credit Union; Roseanne Leonard, Youth Ventures; Laura Levine, Jumpstart Coalition for Personal Financial Literacy; Jamie Letcher, Great Wisconsin Financial Advisors; Juli Lewis, Suncoast Schools Federal Credit Union; Dawn Lindley, DE, Virginia Credit Union League; Yelena Lyashevskiy, iQ Credit Union; Gwen Mahaney, Youth Ventures; Lew Mandell, Ph.D., University at Buffalo; Suzanne McClure, Burbank City Employees Federal Credit Union; Julie McLean, Arapahoe Credit Union; Joe Mecca, Coastal Federal Credit Union; Tina Mike, DE, APG Federal Credit Union; Bonnie Miller, Suncoast Schools Federal Credit Union; Sean L. Miller, HEW Federal Credit Union; Tom Moioffer, Burbank City Employees Federal; Valerie Moss, CUNA Regulatory Affairs; Marquis Murphy, Great Plains Federal Credit Union. Kay Neidlinger, Indiana Credit Union League; Pamela Owens, DE, National Federation of Community Development Credit Unions; John Parfrey, National Endowment for Financial Education; Marnie Perfetti, Mid-Minnesota Federal Credit Union; Michael Poulos, Michigan First Credit Union; James F. Radintz, Future Farmers of America; Steve Rick, CUNA Economics & Statistics; Michelle Sample, Virginia Beach Schools Federal Credit Union; Ray Sarabia, El Paso Affordable Housing CUSO; Gail Sawyer, Point Plus Credit Union; Kelly Schermerhorn, DE, CES Credit Union; Karen Smith, DE, Montana Credit Unions for Community Development; Ruth Sweat, Horizon Utah Federal Credit Union; Maxine Sweet, Experian; Pamela Swope, DE, FinancialEdge Community Credit Union; Juri Valdov, Northwest Federal Credit Union; Kate Vergara, Burbank City Employees Federal Credit Union; Lynn Warner, DE, BTCU; Joel Wescott, Golden 1 Credit Union; Pat Wesenberg, Point Plus Credit Union; Diana Wheeler, DE, Digital Federal Credit Union; Kim Wilkerson, Central Virginia Federal Credit Union; Amy Wisilosky, Virginia Beach Schools Federal Credit Union; Kristina Wright, DE, Minnesota Credit Union Network; Susan Young, DE, CP Federal Credit Union.

Photo Credits Cover: (l. to r.) Michigan Catholic Credit Union, Michigan First Credit Union, USDA Farm Services Agency.

Chapter 5: Michigan Catholic Credit Union (66), Alternatives Federal Credit Union (68, 69).

Why Financial Education: Alternatives Federal Credit Union (p. v), Michigan First Credit Union (vii), USDA Farm Services Agency (viii).

Chapter 6: Ohio University Credit Union (p. 77), Mid-Minnesota Federal Credit Union (81), Jupiter Images Unlimited (85, 87).

Chapter 1: El Paso Affordable Housing CUSO (p. 4), Ohio University Credit Union (6, 8).

Chapter 7: Jupiter Images Unlimited (p. 96), Michigan Catholic Credit Union (98).

Chapter 2: Alternatives Federal Credit Union (p. 15), Michigan Catholic Credit Union (20), Michigan First Credit Union (22), Arlington Virginia Federal Credit Union (23), Erie Federal Credit Union (28).

Chapter 8: Jupiter Images Unlimited (p. 112).

Chapter 3: El Paso Affordable Housing CUSO (p. 36), Michigan First Credit Union (37), USDA Farm Services Agency (38, 39).

Chapter 9: Cindy Brady (p. 125, 126), USDA Farm Services Agency (130), Michigan First Credit Union (133), Jupiter Images Unlimited (134), Arlington Virginia Federal Credit Union (135).

Chapter 4: Arlington Virginia Federal Credit Union (p. 45), Artville Stock Images (48), Cindy Brady (50), Erie Federal Credit Union (51), Michigan Catholic Credit Union (52). M O D E L Y O U T H P R O G R A M G U I D E 141

142 M O D E L Y O U T H P R O G R A M G U I D E To order: 800-356-8010, ext. 4157 Stock No. 28479 Š 2008 Credit Union National Association Inc., the trade association for credit unions in the U.S.