Financial education reduces stress for staff, members

Last year, the Illinois Credit Union System (ICUS) set out to determine where its 120 employees experience the most financial anxiety in an attempt to alleviate their stress levels and improve their overall health.

An employee survey revealed the main culprits: student loan debt, the need to save for college, and overall debt levels.

The effort was partly due to National Credit Union Foundation research showing how financial stressors can affect physical health and work performance, says Tom Kane, ICUS president/CEO.

“If people are stressed about their financial situations, they obviously don't leave that at home,” Kane says. “They bring it to work with them.”

In response, ICUS rolled out a comprehensive financial wellness program to address many of these issues.

Kane highlights the organization’s efforts to improve staff’s financial standing, and details how its member credit unions do the same for consumers.

Can you explain your financial wellness program?

We just rolled out a personal financial coaching program called Financial Finesse, where people can call and talk anonymously to a financial planner about the issues they’re facing.

They also have a website and hold webinars on various topics.

We do monthly educational sessions, lunch and learns, on different topics, such as when to take Social Security during retirement.

It’s changed over the last few years in that a lot of younger people are interested in topics such as Social Security and retirement. I can’t say I thought about that at all when I was in my 20s.

Probably the biggest thing we’ve done is to partner with a company called Gradifi, which offers student loan paydown.

We used to offer tuition reimbursement, but only three or four people took advantage of this each year. So we decided to spread the wealth a bit with Gradifi, through which we contribute $125 per month to pay down someone’s student loans or go into a 529 educational saving plan.

There are no strings attached. Gradifi makes the payment directly to the student loan or 529 plan. Out of our 120 employees, 32 signed up for it.

We wanted to make this benefit available to everyone. We have younger people who are paying off student loan debt and some older folks who are saving money for their kids’ college.

We view it as a retention tool and a way to relieve some financial stress.

It pains me to see the number of people who take out loans against their 401(k) plans. We try to counsel people that, while it’s their money, they should try to find alternative options for loans.

Even though we work in a financial organization, there’s still a lack of financial education. People don’t come out of school with a great grasp of what credit card debt actually costs or what they’ll lose by borrowing on a 401(k) plan.

NEXT: Advice for other organizations

What advice would you offer other organizations about offering financial literacy resources for staff?

Ask your staff what they need and what stresses them out from a financial perspective. What do they think about when they leave work—or while they’re at work?

It may be childcare expenses. That issue happens a lot, particularly among people with multiple children.

Then, try to identify relatively inexpensive measures or programs that offer the biggest bang for the buck to help alleviate that stress.

It’s ironic that we as financial institutions suffer from the same issues affecting other industries. It comes down to a lack of financial education.

But we’re uniquely positioned as an organization—and credit unions are, too—to be able to walk the talk because it’s what we’re also trying to convey to credit union members.

We need to look inward at our own staff to make sure we address their issues and challenges.

How do your member credit unions assist consumers with their financial struggles?

One credit union that always amazes me is KCT Credit Union. Their CEO, Mike Lee, believes Americans have too much debt and the wrong kind of debt.

The problem isn’t usually that people don’t make enough money, but how much money they spend.

KCT developed a program called “Debt Checkup,” where members come in and review all of their debt. The credit union works with them to restructure their debt. They’ll often save members $300 to $400 per month.

If rates go down on certain loans, they’ll refinance them at the lower rate. They’re willing to cannibalize their own programs to do what’s right by the members.

If you do that, you’ll have a member for life because members will see that you really have their best interests in mind.

The challenge is getting people to come in and do that. They’re often embarrassed by their debt, how little they know, or how they got into a particular situation.

But KCT has figured out it can almost always save members money and turn bad debt into good debt. But the ultimate goal is to eliminate as much debt as possible and turn members into savers instead of borrowers.

They’ve become a lending machine, too, because it does right by its members. People recognize and appreciate that.

Many of our credit unions also conduct financial education presentations for members. So far this year they’ve reached more than 31,000 youths with nearly 1,100 presentations.

They’ve also conducted 657 presentations for adults, reaching nearly 15,000 people.

It has a huge impact on members’ lives.