Credit Union uses new approach to teach young adults financial literacy

Credit Union uses new approach to teach young adults financial literacy

PINE BELT (WDAM) - Our quality of life is largely determined by some of the financial decisions we make between the ages of 18 and 24, the peak of young adulthood.

With many young adults balancing family, school, work and relationships, it’s difficult to get a handle on one of the most critical components of our lives at the time, finances.

Young adults aren’t necessarily prepared to deal with financial instruments and one credit union is looking to change that.

President of Ferguson Federal Credit Union Lynell James’ approach to equipping youth with financial literacy could be paradigm-breaking.

James said the way Ferguson Federal Credit Union is going about teaching finance could change lives, families and communities.

Students at both Columbia High School and Lawrence County High School work in student-run credit unions where they handle finances on another level.

“Those branches they do actual transactions," James said. “They open accounts, they sign up members, they recruit members. That’s the part about the interpersonal skill part that they learn. They actually have to go out and they lobby to get people to come in, get them set up, actively do check cashing and exchanges, day to day operations that you would see at the counter of any financial institution.”

The students at Columbia working at the credit union are getting ahead of their peers by seeing first-hand the impact credit has when using financial instruments.

“They get an opportunity to learn how loans are processed," James said. “If you’re involved in the origination and execution of a car loan, this is something that these young people are going to do early in their lives.”

James said he thinks their experience there would give them a grasp of how important it is to be financially responsible.

“They don’t default on loans because they understand loans," James said. “They understand interest rates. They understand to look at life-long costs.”

And the hope is that the knowledge the students are gaining would spread throughout the community.

“When the percentage of the well-educated, financially literate people hit our streets and they start interacting with our businesses, the businesses now have customers, and in our case members, that are going to make responsible decisions and so they complete the transactions,” said James.

The impact of this approach of teaching could be powerful.

“Because you’re touching so many people so quickly, the community itself, the state could see a benefit from that," James said. “Less defaulted loans, less damaged credit, more purchasing power, that’s the key.”

If younger people begin to understand the principles of finance through their high school years, James believes they would have a much better quality of life if they apply it.

“I know it affects every aspect of a person’s life," James said. “Most marriages break down because of financial issues. Most organizations break down because of financial issues.”

James said he’s seen first-hand how those with the knowledge benefit far more than those without it.

“People who understand finance typically have your higher incomes, so many times I see people on minimum wage paying 10 percent interest on a car and the guy with the six-figure-income paying 2 percent or less," James said. “It doesn’t seem fair, does it? It’s all about knowledge, it’s all about understanding credit, how to build it how to protect it and the sooner the better.”

James believes if more companies and schools partnered together to bring finance training to high school curriculum, it could change the trajectory of so many students throughout the state

“Train them early," James said. “It’s never too early as a matter of fact, like I see it’s the whole key driver behind the in-school, high school level, in school branches. We’re interacting with them prior to them entering the financial world.”

And he hopes the nation will eventually follow suit.

“It’ll be so wide spread that some historian would have to remember who started that in Mississippi and that’s really the dream,” James said.

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