Graduation season is upon us. Itchy gowns, uncomfortable mortarboards, and seemingly endless graduation parties. Whether graduating from college or high school, students are facing a plethora of financial decisions and looking for guidance, good advice, and a welcoming financial institution.
Let’s take a look back to my graduation parties. Growing up I received an unending supply of financial advice from family members as my aunt is employed at a bank, my dad used to be a loan officer, and my mom was a teller. In short, I had a financially minded family. While I was genetically bound to have some sort of financial savvy, I found myself searching for advice and opinions from less intimidating financial figures.
At graduation parties, the generational gap is obvious; the separation of wisdom, financial and otherwise, from classmates and Great Aunt Mable is evident. When it comes to making financial decisions, how do you bridge the gap of advice from intimidating financial cornerstones to a best friend? And how can financial institutions take the opportunity to bridge that gap?
It’s no secret that graduates receive intimidating amounts of money from well wishing family members and friends but when the confetti has settled, graduates are left to determine what to do with their newfound wealth. Great Uncle Milton would probably advise a solid savings account with interest, but how fun does that sound compared to unlimited Taco Bell? Enter the opportunity for financial institutions.
Alan Bendheim, a professor of economics and public affairs at Princeton University, states that, “Economics education is about much more than money; it provides students with a framework for making good decisions that will help them and the country.” As of 2014, 24 states require a high school course in economics be offered to students.
Certainly the level of education at a high school level is insufficient to change American’s saving habits; however, access to financial knowledge has never been more present. Today’s graduates do not fight a battle without data, the problem is that they often to not know who to trust and too often a Google search is preferred over speaking with a financial institution.
So how do we change this?
Financial literacy is important, but it’s not everything.
Chose a recent graduate that you know. Ask them their take on all things financial. Ask about your institution and their thoughts. While your sample size may be relatively small, you may still learn more than you would conducting surveys especially the ones conducted by land-line phone.
Educate your staff to know of the pitfalls coming for Millennials.
Helping Millennials to see potential financial woes can be helpful, but even more asking them how they will overcome those fates can help. A 2012 study by the NFCS found that 36% of Millennials have student loan debt compared with 20% of all respondents, and a startling 55% of this group were concerned they might be unable to repay this debt. In addition only a third of Millennials polled have emergency savings, 31% have unpaid medical bills, and nearly half are carrying a balance on their credit cards. (CEE, 2012)
Challenge your financial institution to play an active role socially in the financial conversation.
Sure, even your closest friends may not ask you to talk to their kids about finances, but engaging in the conversation will allow you to be perceived in the right light when financial needs arise. Also, improving the amount of conversations your staff take on through education will give them more opportunities to canvas your community.
Financial institutions play a pivotal role in life changes, especially graduation and the first steps into financial independence; make sure graduates know that their chosen financial institution is available and interested, always willing to lend an ear or advice. Think about the advice you’re about to bestow on recent graduates and make sure it bridges the generational gap without losing the wisdom along the way.