When it comes to learning about money, Millennials choice in a banking partner plays a key role.
Representing nearly a quarter of the total United States population, millennials now make up the largest living demographic in the country. And representing almost two-fifths of the working population, they hold the largest spending power of any demographic in America.
But studies show that millennials could benefit from learning more about financial literacy in order to adjust to this shift.
According to research by The Global Financial Literacy Excellence Center (GFLEC) at The George Washington University, only 24% of millennials demonstrate basic financial literacy. Many are juggling debt, including credit cards and student loans, and may be struggling to manage personal finances. This study shows a serious challenge facing this generation, one the surveyed millennials attributed to their poor financial outlook and overall satisfaction with managing their finances.
Based on this and other studies, it pays (literally) for this generation to become financially educated and the sooner the better. Student loans, first homes, and other debt obligations can only compound an already fragile financial outlook, with potentially long-term ramifications if not managed properly. Of course, financial literacy is about more than just understanding and managing debt incurred; it’s also about making the right decisions about savings, investments, and just about anything related to spending your money.
Fortunately, there is a great resource for improving financial literacy – credit unions.
Compared to a big national bank, not-for-profit credit unions tend to be more locally-minded and in-tune with the specific financial needs of each of its members. That personal approach is likely important to Millennials, who based on this study, generally appreciate more guidance and service in the process of establishing good habits and understanding financial decisions. Put another way, the associates at a credit union with whom you trust your money are willing to help with establishing good financial habits and can provide tools to do so.
Another attribute of credit unions, that many may find important, is their focus on community involvement. Credit Union members are part owners of the institution; the volunteer and member-elected Board of Directors help make decisions about how the company runs, how it invests money, and the type of support put into the local communities they serve. Not beholden to the agenda of a national banking enterprise, credit unions are in a better position to make an impact on hometown causes that are important.
Better rates and lower fees are other advantages that credit unions hold over most big banks. Saving money is something any generation can appreciate, but when you’re trying to buy your first home lower fees and interest rates can make all the difference.
Don’t think for a second that credit unions, by the nature of their sizes, are behind the times when it comes to technology and convenience. On the contrary, credit unions generally offer the same technological innovations that make banking easier. This generation is a mobile-first group and with handy online and mobile banking apps and features, credit union services—not to mention your money—are never more than a click or two away. Even more, many credit unions belong to a nationwide network of shared branches and ATMs, allowing easy access to your money no matter where you may be traveling.
One more important consideration: At many credit unions, KEMBA Financial Credit Union included, members are eligible to receive complimentary financial counseling, which is a benefit directly tied to advancing financial literacy.
For more tips on improving your finances, visit KEMBA’s Learning Station for valuable tips, articles and videos on a wide range of financial topics. For more information about credit unions, or how easy it is to join, stop by a KEMBA Financial Credit Union branch today. Or call a KEMBA Member Service Representative today at 800.282.6420, option 4.