6 Strategies for Leveraging Your Financial Literacy Program

by Sarah Morris

Financial literacy programs are great for raising awareness and encouraging financial action. Banks and credit unions must be careful It’s time to stop overlooking the value that financial literacy programs can bring to your financial institution and include it as part of your overall content strategy.

Other than fostering general good-will between your financial institution and your relationships, studies show the more financially literate consumers are, the more likely they are to be engaged across multiple products, and thus more profitable to your bank or credit union.

Let’s take a look at some financial literacy topics and how you can start to tackle them with your own financial literacy program.

Kids/Youth Savings Programs

Instilling the value of savings into the lives of kids is important to help prepare them for their futures. There are many ways banks and credit unions can educate children and provide valuable skills for them to learn about the idea of compounding interest and learn to save and make wise spending choices. Your Youth Savings Program should include educating children on the idea that banking is a safe way to keep track of money and record deposits and withdrawals.

Get Involved with Schools

The FDIC provides numerous materials and ideas for developing a Youth Savings Program in your community. Getting involved with schools in your area and volunteering to visit schools and teach kids about saving and the benefits of banking is a great way to establish a positive reputation in your community, build rapport with current relationships, and ultimately obtain new relationships. Your programs should include tips for managing money and recording any and all deposits and withdrawals. Check out these free materials and some ideas about how to get involved in your local schools.

Share Tips on Social and Email

Create an email campaign to share youth savings stats or tips with parents between the ages of 25 and 45, with or without a Kids Savings account primary or secondary relationship. Share these stats and tips on all of your social accounts. You can download these ready-made social designs to help get you started. Sending these types of educational communications are a good way to engage your relationships, build loyalty, and boost customer or member retention.

How to Promote Kids Savings Accounts

Most kids or youth savings accounts already offer the benefits of no minimum deposits or balance minimum. A great way to get kids excited about saving and to promote your kids' savings account products can be to offer to match up to a certain amount - $25 or $50 - for any new kids savings account opened during a promotional period.

“Open a new Kids Savings Account in August and receive up to a $50 match on opening deposits!”

Another idea for promoting financial literacy among kids and growing your deposits is to hold a Summer Savings Challenge. Encourage parents to help their kids open a savings account over the summer and start saving. Determine a savings goal, and those kids who save, say $200 over the summer get entered in a drawing to win a $300 cash prize. Or the kid who saves the most over the summer wins a new iPad or laptop or receives a $300 deposit into their account. Some ideas for how they can earn money:

  • Allowances
  • Gifts or Birthday Money - Remembering birthdays for your youth savers is huge. Part of your strategy here could be to send individual birthday communications to each of your youth savers, reminding and encouraging them to deposit some of their birthday money into a savings account.
  • Odd jobs for family members, neighbors, or elderly
  • A lemonade stand or bake sale

Defining Your Audience For Youth Savings
Age Range - Target parents between the ages of 25 and 45.
Products - All without kids savings account primary or secondary relationship.
Balance - No balance filter.

Home Buying

One of the most stressful things any family or individual will do in their lifetime is buying their first home. The process often seems daunting and overly complicated without the proper resources or support. By offering financial literacy tips on mortgages and the home buying process, you will show your relationships that you are there to help, and they will begin to view you as a trusted advisor. Then when the time comes for them to start their own home buying process, you will be their first obvious choice for a mortgage.

Send out tips for saving for a down payment:

  • Share how the amount you put down as a down payment greatly affects interest rates, monthly mortgage payments, and the need for PMI.
  • Offer resources on how to set up a budget and separate savings account.
  • Mention the importance of determining a timeline and setting smaller milestone savings goals.
  • Share resources on how to calculate what your monthly mortgage payment would be.

Host a lunch-and-learn seminar on the home buying process and choosing a mortgage:

  • Have a loan officer organize a small local event where they present helpful tips and how the process works.
  • Provide ample time for Q&A.
  • Consider partnering with a local realtor for additional support and expertise.

Defining Your Audience for Home Buying Financial Literacy
Age Range - Target relationships ages 35 and younger in good standing. Consider widening age range to include Gen X-ers and Millennials.
Products - All without a current mortgage.
Balance - No balance filter.

Debt Management

Whether it’s student loans, medical bills, or credit cards, large amounts of debt plague most Americans. So much so, tons of people are left not knowing where to start when it comes to getting their debt under control and paid off. Offering financial literacy tips and strategies for managing and paying off debt can be a great way to educate your relationships on debt and build loyal customers or members through trust and resource.

  • Send out information on creating a monthly budget, with debt repayment as a top priority.
  • Offer advice on paying off high-interest debt first.
  • Over tips for minimizing monthly expenses to save more money to put towards debt repayment.

Defining Your Audience for Debt Management Financial Literacy
Age Range - Target relationships 18+.
Products - Target relationships with current credit cards.
Balance - $5,000 or more (Based on the national average of credit card debt per individual).

Build Credit

Consider boosting financial literacy for your customers or members on how to build or repair credit by creating a credit building literacy campaign. Make sure your customers and members understand:

  • What is considered good and bad credit?
  • How do you determine your credit score?
  • How to build credit?
  • How to repair bad credit?

If you offer a credit builder loan at your bank or credit union, share the benefits and features of applying for one as a strategy for building or repairing bad credit.

Defining Your Audience for Credit Building
Age Range - Target relationships 18+.
Products - No product filter.
Balance - No balance filter.
Additional Criteria - If credit score data is available, target those with fair, bad, or no credit.

Promote the importance of paying on time and keeping your balances low. If they are currently a relationship with an existing loan and checking account, remind them of the features and be sure they are utilizing Bill Pay as a way to keep balances low and pay bills on time.

Defining Your Audience for Credit Building
Age Range - Target relationships 18+.
Products - All with a current loan product and checking account product.
Balance - No balance filter.

Basic Budgeting

Basic budgeting is an essential skill for any individual wishing to be financially responsible. It would be interesting to survey your existing relationships to find out which of them currently keep and maintain a budgeting system for their finances.

The FDIC offers great materials on financial education called, FDIC Money Smart, which can provide supplemental resources for you to include in your financial literacy program. Create an email campaign and continuously offer resources on your social media accounts on the importance of smart budgeting, and all of the things you can accomplish with a solid, basic budget. Some additional ideas for helping your customers or members understand basic budgeting include:

  • Demonstrate to your relationships how to create a budget that meets their unique financial goals and can maximize their money. There are lots of free tools out there to point them towards that can track their monthly income, bills, additional expenses, and savings opportunities.
  • Offer educational content on how to set up and use and Emergency Fund. Setting up an emergency fund is an important step towards financial security as it allows individuals to set aside money that they can use in the event of an emergency - think damage to home or car, medical emergency, etc.

Defining Your Audience for Basic Budgeting
Age Range - Target relationships 18+ in good standing.
Products - Savings, checking, or money market accounts.
Balance - $1000 average monthly balance threshold across core deposit checking accounts.

Safe Banking for Seniors - Fraud Protection

Seniors are notorious for being targets of fraud and financial scams. This is why including education on safe banking for seniors can be a positive addition to your financial literacy program.

The ABA offers a free program, Safe Banking for Seniors, that is loaded with presentations, resource sheets, activity sheets, and more, all designed to help you educate your senior relationships, and their families or caregivers, on avoiding scams, and choosing a safe financial caregiver. Pull ideas from there or other resources and put together an email to your senior relationships with a list of tips for safe banking.

Defining Your Audience for Safe Banking for Seniors
Age Range - Target relationships 55+ in good standing.
Products - No product filter.
Balance - No balance filter.

America Saves Week

Once a year, America Saves Week encourages American families and individuals the importance of saving. Get involved and utilize this week as an opportunity to motivate and lead your customers and members in understanding why saving is important and the best strategies for doing so. It also grants you the opportunity to promote your savings products along with your financial literacy efforts.

For a complete weekly breakdown on how to use America Saves Week to promote saving, click here.

Remember, the more your relationships understand personal finance, the more engaged they will become across multiple loan and deposit products. For more ideas on financial literacy programs for your customers or members, contact us today at info@onovative.com.