“Working to help parents raise money-smart kids.”
Hello, friends!
I recently returned from the THINK 22 conference in Chicago, where Shari Storm and I presented “Kids These Days,” our talk to help credit unions better connect with kids of all ages and help them thrive financially.
At events like these and in our Art of Allowance Academy courses, we are often asked how we began working with credit unions and why we continue to do so. Today’s newsletter addresses that why and explores the possibilities and perils that face these wonderful institutions.
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Where We’ve Been: My wife and I originally created The Money Mammals to get kids excited about something other than spending and to encourage them to build good money habits early. Ours was an intentional and a practical approach: Why wait to introduce these topics and then have to break poor money habits later?
I promptly discovered that engaging children (and their parents) early kick-started ongoing money conversations among family members. What’s more, I quickly realized that this unintended side benefit was actually core to the process.
Serendipitously, soon after The Money Mammals made their debut, a maverick credit union financial educator, Kerrie Davis, contacted me. She wanted The Money Mammals to help her members’ families too. Kerrie’s enthusiasm also allowed me to see an opportunity: The Money Mammals could support not only her institution but also credit unions across the country.
I then learned that these institutions have seven cooperative principles, the fifth of which is to empower members with money smarts. Put simply, credit unions and Snigglezoo (our company) share similar DNA.
So we launched The Money Mammals Saving Money Is Fun Kids Club, an ecosystem of digital and physical resources including apps, books, games and quarterly newsletters, which promotes our money-smart message of sharing, saving and spending smart.
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Where We Are: Despite The Money Mammals’ message, I began to realize parents need help of their own on their families’ money-smart journeys. So I wrote my book, The Art of Allowance, to provide a framework they could use to equip themselves to be their children’s guides.
We also re-envisioned our program around a central tenet: empowering families to raise money-smart kids. The new program, dubbed The Art of Allowance Project, now features material for parents based on content from my eponymous blog, book and podcast. It continues to include The Money Mammals, who continue to delight and engage young children, and we recently added Adolescent$, a new portal for tweens and teens.
We now have material for youth at every age and stage.
But as exciting as this new chapter sounds, it also worries me.
Namely, I’m concerned that credit union decision makers too often just “check the financial literacy box” by focusing a majority of their efforts on high school initiatives. But let me be clear: Volunteers do wonderful work connecting with high school students thanks to powerful programs. It’s just that the opportunity is much broader.
Underscoring the opportunity to connect with younger kids, which I believe many credit unions miss, Co-op Solutions offered up some sobering data at the THINK 22 conference:
Credit unions, often synonymous with trusted financial institutions, have long been bastions of customer satisfaction. Unfortunately, the above graphic shows us this perception is changing.
This image didn’t shock me, though, as it was one reason Shari and I were at the conference to speak with credit union leaders. We both knew from the various teen panels we’ve hosted over the last several years that Gen Z, the generation to which most of our children belong, is largely indifferent to credit unions.
Understandably, unless their parents have opened accounts for them at these institutions, it is unlikely that the term “credit union” means anything at all to these kids.
However, as the graph below illustrates, the same cannot be said of fintechs (e.g. Venmo, PayPal, Chime, Robinhood). Gen Z’ers know all about these companies, and this image demonstrates their massive growth as a result.
And our teen panels also revealed that Gen Z members are hungry for money smarts. Again, not that surprising considering where they’ve been. Older Gen Z’ers have experienced The Great Recession, and all of them have weathered the pandemic. Often as a result, they are actively searching for ways to avoid debt and to take control of their finances.
However, as a reader of this newsletter, you know money-smart learning begins early. Credit unions must establish relationships with kids much earlier than in high school. Doing so not only holds behavior benefits for children but also makes a lot of business sense: You can form a trusted bond with these kids way before you start actively marketing to them as young adults.
Also, financial literacy begins at home. Fintechs like Greenlight and Current know this, so they offer parents the opportunity to “train” their children to use digital money via well-designed apps and “starter” debit cards.
These fintechs, though, claim they’re teaching financial literacy when what they’re really offering are only tools. I believe programs like the ones they’ve created are necessary steps for families; however, they don’t magically create money-smart children.
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Where I Believe We Can Go: In order to thrive, credit unions should offer programs that fuel all the engines driving financial literacy.
Direct instruction, like the programs offered in high schools, is just one of those engines. And admittedly, research is mixed about the effectiveness of such programs in promoting money-smart behavior change. Behavior change, or building good behaviors to begin with, is our goal.
Therefore, I would like to see more emphasis on the other two engines: experience (for the kids) and modeling (for the parents).
As we know, lessons tend to stick when we learn them through our own experiences. This is why The Art of Allowance Project emphasizes experiential learning through, of course, an allowance. Children learn money lessons by having success (e.g. saving for goals) and making mistakes in low-stakes environments.
As many other parents and I have discovered, starting early allows us to focus on basic money-smart skills. It also affords us the opportunity to make changes to our own behaviors to be better models for our kids.
Our Art of Allowance Project credit unions partners recognize not only that money-smart learning must begin early and grow with kids as they become tweens and teens but also that a generational approach to membership equips families to raise money-smart children who then become the next generation of money-empowered parents.
Credit unions are important community institutions, and I believe they are at the crossroads of an abundant future or one of declining importance or even irrelevance.
Please ask your local credit union if it is an Art of Allowance Project partner. And if not, then please let me know so we can reach out to them.
Thank you for supporting our journey, and I hope you’re enjoying your own.
John, Chief Mammal
P.S. Please consult with a financial or investment professional before engaging in any decisions that might affect your own financial well-being.
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