I Started a College Savings Account because of Vault

Today we’re featuring a guest post from Nebraska student Diandra P who shares how Vault – Understanding Money™ helped her develop the skills and confidence needed to make smart financial decisions. Congrats to Diandra for being one of our scholarship recipients!

Diandra P

Student: Diandra P
Teacher: Jackie Hinrichs
School: Giltner High School
State: Nebraska
Sponsor: Nebraska Educational Savings Plan Trust (NEST)

Many people have dreams for the future. Some kids want to grow up to be doctors, while others want to be firefighters. Personally, I want to go to college in a big city and eventually work as an editor for a popular newspaper or magazine.

But how many of us actually know how to reach our goals? It can be pretty confusing trying to navigate the adult world of money and life-changing decisions. Luckily, there’s a program out there to help us achieve our goals. It’s called Vault – Understanding Money. Through Vault, I learned about making responsible money choices, as well as about income and taxes.

Vault taught me a lot when it comes to making smart financial decisions. I now understand the importance of saving my money and tracking my spending habits, which are both important skills I am using to plan for the future. I set up a savings account to help pay for college, and am practicing writing down everything I buy to control my spending. I feel great knowing that I am already a step ahead of the game when it comes to paying for tuition.

I also learned about all the different people I have available to talk to when I have a question about money. I took the advice of Vault and talked to my parents about money, and I’m glad I did. The more financial information I get, the more confident I feel about my ability to be be successful in today’s society.

In addition to learning how to make monetary decisions, Vault taught me about earning income and taxes. Besides all of the ways I can earn money as an adult in a few years, the program also introduced me to ways that kids like me can make money now. I’m funding the savings account I set up for college by detasseling and babysitting, and I’ve encouraged my friends to do the same. Working has proved very worthwhile for me. Besides the weekly paychecks I receive, my jobs have rewarded me with many new friendships, connections, and life lessons, which I’m sure will prove mighty useful in years to come. Of course, the creators of Vault knew that you can’t teach kids about means of income without also teaching them about the major responsibility that comes along with earning money – paying taxes. Vault showed me that it is very important for me to pay taxes so that our country is still beautiful and safe when I’m a hard working, prosperous adult.

Maybe I’ll change my mind within the next few years and decide that I don’t want to be an editor, and that’s okay. I’m just a kid; I don’t have to have my whole life figured out already. But there’s one thing I am certain about – I know that whatever I decide to do, I’ll be well prepared to achieve my goals because of Vault, where I learned about making educated financial decisions, earning money and paying taxes.

Financial Capability

The Evolution of Financial Literacy into Financial Capability

With Financial Literacy Month coming to a close, it’s time to ask an important question: should our industry be striving for more than just “literacy?”

In today’s world, we carry around a wealth of financial knowledge in our pockets. Our smartphones ensure that we’re never more than a few screen taps away from the answers to all of our questions. If you think about, carrying a smartphone is like having a bank or credit union branch in your pocket. Yet we’re still celebrating Financial Literacy Month like nothing has changed—when, in reality, a lot has changed.

Taken at its most basic definition, literacy is the ability to read and write. And while an understanding of financial products and terminology may have been a worthy goal for bank and credit union customers in the past, the bar needs to be raised for a world of technology and complex financial decision-making.

Tune in to our webinar on April 25th, 1-2pm ET to hear more on why your bank or credit union should focus on financial capability this Fin Lit Month.

Tune in to our webinar on April 25th, 1-2pm ET to hear more on why your financial institution should focus on financial capability this Fin Lit Month.

A Brief History of Financial Literacy

The first acknowledgement of a need for financial literacy might be this letter from John Adams to Thomas Jefferson in 1787 (since we at EverFi are in Washington DC, we love this kind of historical reference). However, the term itself wouldn’t start to gain popularity until after the 1914 passage of the Smith-Lever Act, which focused on providing citizens with necessary learning experiences, including financial education.

For the majority of the 20th century, financial literacy continued to be a relevant term. But most financial educational tools were text-based, so absorbing this knowledge involved a lot of reading and writing. As it did for many industries, technology soon changed everything.

Smartphones Change Everything

On January 9, 2007, the very first iPhone was announced, and everything changed. Now, people can get the knowledge they need quickly and easily; anything you want to know can be found in seconds. And with more information available, people are able to do more research before making important decisions.

Beyond access to knowledge, smartphones also give people the ability to take action from the palm of their hand. They can read Amazon reviews to research a product, then purchase it with a single click. They can download their bank’s app and have access to financial education, then put that education to use right away by making changes to their accounts. These interactions go well beyond simply becoming literate; instead, smartphones allow users to achieve proficiency and take immediate action.  

Moving Beyond Financial Literacy to Financial Capability

Consider a customer who is aware of both bank services and check-cashing services—the latter of which can be predatory, tacking on huge service fees. The customer already has the financial literacy to know that each option exists. But to achieve true financial capability, this hypothetical customer needs the confidence and strategic attitude to make the connection that a banking product would be a better choice for their long-term financial health.  

That’s why we think it’s time to replace financial literacy with a more impactful term: financial capability. Financial capability is the set of knowledge, attitudes, habits, and confidence in one’s ability to control one’s finances that a consumer needs to build his or her financial wellbeing. In other words, it’s not just a matter of being literate about your financial options—it’s having the capability to use that literacy to make good decisions.

In order to change the conversation surrounding financial education standards, we need to change the industry expectations. So, in April 2018, let’s not celebrate Financial Literacy Month anymore. Instead, let’s raise the bar.  Let’s plan a big, impactful, and action-oriented month.  Let’s have Financial Capability Month.

P.S. – Download our mini guide, Developing Financial Capability Across Every Stage of Life: Why Financial Education Should Start Early, to learn how your financial institution can improve its financial education initiatives.

Financial Marketing and Millennials: By the Numbers

For financial institutions seeking to attract the millennial demographic, using technology is the key—especially technology that is optimized for mobile devices. Not convinced? Here are some mind-blowing statistics around millennials and mobile that you should know to influence your financial marketing strategy:

Financial marketers looking to engage millennials must leverage mobile technology as part of their financial marketing strategy.

Financial marketers focused on engaging millennials must leverage mobile technology as part of their financial marketing strategy.

  • Millennials (people between the ages of 18 and 34) have the highest rate of mobile usage of any other demographic.
  • A whopping 97% of millennials have used a mobile device to access online content. For 1/5 of millennials, mobile devices are the only way they access the Web.[1]
  • The average adult checks their phone 30 times a day. That sounds like a lot. But the average millennial checks their phone more than 150 times a day![2]
  • Does your website work well on all devices? Because 40% of people will abandon their first choice of a search result if it isn’t mobile friendly.[3]
  • Are your emails optimized for mobile, as well? We hope so, because 91% of people checking email on their phones will ignore marketing emails if they are not optimized or linking to pages that are mobile-friendly.[4]
  • When it comes to financial education, we here at EverFi found that 36% of our adult users used their phones to access our financial education content—in 2017 alone.
  • Does your bank or credit union offer financial education? Because millennials are 24% more likely than Baby Boomers to value financial education from their bank as an important feature.[5]

Taken together, these statistic make it clearer than ever: banks and credit unions that want to attract millennials should be focusing on providing a great mobile experience for this demographic.

For more information on how to connect with this “mobile generation,” download our new white paper, The Financial Marketer’s Guide to Acquiring Millennial Consumers Through Mobile.

 

[1] 2016 U.S. Cross-Platform Future in Focus. (n.d.). Retrieved December 16, 2016, from http://www.comscore.com/ Insights/Presentations-and-Whitepapers/2016/2016-US-Cross-Platform-Future-in-Focus

[2] SMW Staff (2016). Millennials Check Their Phones More Than 157 Times Per Day | Social Media Week. Retrieved February 23, 2017, from https://socialmediaweek.org/newyork/2016/05/31/millennials-check-phones-157-timesper-day

[3] De, D. (n.d.). Financial services in a mobile-fi rst world. Retrieved December 16, 2016, from http://forum2016.com/ wp-content/uploads/presentations/Financial_Services_In_a_Mobile_First_World.pdf

[4] Van Rije, J. (n.d.). The ultimate mobile email statistics overview. Retrieved December 16, 2016, from http://www. emailmonday.com/mobile-email-usage-statistics

[5] Study: Millennials Value Financial Education, Guidance and Mobile Account Access from Their Financial Services Providers. (2016). Retrieved December 16, 2016, from http://www.prnewswire.com/news-releases/study-millennials-value-fi nancial-education-guidance-and-mobile-account-access-from-their-fi nancial-services-providers-300346661.html

Vault Taught Me How to Save and Spend Wisely

Today we’re featuring a guest post from student Shannon W who shares how the skills and knowledge she gained from Vault – Understanding Money™  will help her reach her financial goals of owning a house and supporting a family. Congrats to Shannon for being one of our scholarship recipients!

Student: Shannon W
Teacher: Kelly Barger
School: New Market Middle School
State: Maryland
Sponsor: MassMutual Foundation

It’s 5:00 P.M., and two kids come running toward their mother, a boy and a girl. They envelope her in hugs as she brings in the mail. There are bills to pay and catalogs for the kids. The father comes in, noticing the huge stack of bills piled up on the table. “I bet you’re glad we didn’t get that extra-large TV for the kids,” he says. The mother nods, realizing how her choice to save that money was a benefit to her financial stability. They had just bought a new house, one with a big backyard for the kids to play in, with a large, open kitchen for the mother to do her cooking in. The two kids were growing up fast, and the mother knew that this house, along with their new minivan, would be perfect to grow into. It had taken a long time, months maybe, to find the perfect house that fit their budget and their family. The mother was glad that she had paid attention in class all these years and knew how to make successful financial choices.

This is not just a story, this is how I see my future. I dream of having a happy life, being married, and having children. I know that these dreams can come true if I make good social and financial choices in the years to come. Completing the Vault – Understanding Money program in EverFi has been an essential step in my path to achieving my dream of owning a house and supporting a family.

Something that parents need to prioritize when involving money is the concept of wants and needs. In Vault, I learned that it is okay to spend money on things that you want every once in awhile, but it is essential to prioritize what you need to do with your money first. Needs include food, clothing, and shelter. Vault has greatly helped me understand the difference between these two financial factors.

Buying a house is a major step that causes difficulty for most young parents. I have the knowledge to help avoid these difficulties because of Vault. Vault taught me that you need to have good credit in order to get a loan on a house. I know that in order to buy a house, I will have to prove that I am a responsible borrower and can always pay for items on time.

In order to have enough money for a house, I will need to know how to stick to a budget. Vault showed me that a budget needs to list different needed expenses and how much money will be used on each expense. This organizational structure helps prevent overspending and will help me be more responsible with how I use my money. This is important to my future because if I am not careful with my money, I will not have enough money to buy the items that my family will need, such as a house, a car, healthy food, and clothing. Learning how to be financially literate on Vault has prepared me to use my money wisely to support my future.

 

Learn more about the Vault financial education program: https://everfi.com/k12/vault-understanding-money/