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Using Storytelling to Help People Build Their Rainy Day Funds
- 1. Using Storytelling to Help Build Financial Resiliency #CommLead @Joelwho
- 2. 2 CEO Jennifer Tescher, Center for Financial Services Innovation (CFSI)
- 3. 3 Federal Reserve: “Report on the Economic Well-Being of U.S. Households in 2016,” Board of Governors of the Federal Reserve System 2017
- 4. BECU has offered financial education since 1991
- 5. 15.0% 7.0% 3.4% 0.9% 0% 2% 4% 6% 8% 10% 12% 14% 16% Biased Partially de-biased Quasi-experimental Randomized Change in knowledge Change in behavior Financial education alone has limited impact on behavior 1% Not Much!
- 6. 6
- 7. The Financial Health Check at BECU: A new model of scalable support Key Features • One-time, 30-60 minute phone session • Confidential, one-on-one conversation • Focused on building liquid savings and reducing high- interest credit card debt • Support for real-time action Real-Time Support Just-In- Time Education Online Tools
- 8. Financial Health Check Key Features • One-time, 30-60 minute phone session • Confidential, one-on-one conversation • Focused on building liquid savings and reducing high-interest credit card debt • Support for real-time action
- 10. Interactive Simulation: Closing for Good & Financial Reality Fairs
- 12. Interactive Simulation: Closing for Good & Financial Reality Fairs
- 13. Interactive Simulation: Closing for Good & Financial Reality Fairs Self-Guided Apps
- 14. Interactive Simulation: Closing for Good & Financial Reality Fairs Make It Automatic
- 15. The Financial Health Check at BECU: A new model of scalable support Key Features • One-time, 30-60 minute phone session • Confidential, one-on-one conversation • Focused on building liquid savings and reducing high- interest credit card debt • Support for real-time action Real-Time Support Just-In- Time Education Online Tools
- 16. The Financial Health Check at BECU: A new model of scalable support Key Features • One-time, 30-60 minute phone session • Confidential, one-on-one conversation • Focused on building liquid savings and reducing high- interest credit card debt • Support for real-time action
- 18. 18
- 19. 19
- 20. Thank you! Joel Ballezza | BECU
Editor's Notes
- Today I’m going to talk about the rainy day funds… a common label for savings set aside to cover unexpected storms, and how you can beat the weather, at least financially.
- Source: https://www.federalreserve.gov/2015-report-economic-well-being-us-households-201605.pdf Out goal is to get members on stronger financial footing, to build resiliency and financial health. I’m going to try to pack in as many weather puns as possible, so put on your galoshes.
- Source: https://www.federalreserve.gov/publications/files/2016-report-economic-well-being-us-households-201705.pdf Financial health means that when the sky gets dark, you can weather storm. As we know in Seattle, plan for bad weather. It’s going to come. And 44% of adults don’t have the cash reserves to cover an unexpected expense of $400. That includes people in Washington State. That includes our neighbors in Seattle. That includes the people on this campus. 1 in 5 people are under/unbanked WA is ranked 45th in the country for student financial literacy 53% of BECU members struggle financially
- BECU was one of the first credit unions to offer financial education workshops, launching a financial education team in 1991 to provide free financial education programs for members, local community groups, and local schools. At one point, we had in-house financial counselors dedicated to helping vulnerable members navigate their finances as well, and BECU became known as a leader in the credit union industry for our commitment to financial education.
- National study discovered that behavior change isn’t made just by communicating---more need to be done. Rigorous analysis of data shows that while financial education may be changing knowledge, there is scant evidence that it is changing behavior. We had a mystery! We’ve been member-focused for decades, publishing articles and providing educational materials to help people make the right decision. And yet, we haven’t seen a huge jump in the financial health of our membership. In 2014, wondered whether we could demonstrate impact – are member’s financial situations improving as a result of participating in financial education programs? And as we looked at how others were answering this question, we found out that studies were suggesting that traditional financial education has a limited impact on behavior. In short just telling isn’t enough.
- I studied communications, worked in marketing for over a decade so it is sad to admit, but just telling people doesn’t work. Information alone is not enough. They say telling once, twice and tell them a third time? I say there’s got to be a better way. Anyone catch my super-dated 1980s movie reference?
- We tried something different
- First we held a pilot program, with positive feedback we then began to scale the program and add staff Over the past two years we’ve provided over 2,400 financial health checks, to prove the concept and to scale
- This past October we financial reality fair called Closing for Good for 7,000 students at 12 high schools
- Students take on various occupations and learn how to stay within their budgets… but first we pretend to be salespeople and “sell” them Porsche and BMWs. The sticker shock is fun!
- Moved from paper to apps. We are meeting kids where their attention was at, and it worked great!
- We saw the power of the discussion we had at Closing for Good. We wanted to bring this to even more people so we launched a toolkit for parents, and thousands downloaded the discussion guide.
- Our newest tools include self-guided apps to provide just-in-time education, launching soon.
- Our online banking services include Money Manager, a system that automatically analyzes spending habits to visualize exactly where those dollars go and to help members set and achieve their savings goals.
- Again, we’re not just telling. We’re telling, showing and supporting and we think this has potential.
- Initial results are promising. In our financial health check pilot, data is showing that we’re able to make good habits stick, vs. the group we just provided financial education to.
- Been a member for over 35 years Snowball method to pay down debt high interest debt Called back and shared story Jane was able to pay off about $10,000 in debt since her call and aims to pay down the rest of her debt by next year. We would have recommended putting all credit cards away so as not to create any new debt. Then we would have recommended tackling the debt using the debt snowball method. Member would focus any additional payment amounts she was able to make to her debt with either the lowest balance or the highest interest rate (depending on which she was more comfortable with; some members like to knock off the smaller balances first while others would rather save the most by tackling highest interest first) while making minimum payment amounts to the remainder of her debt. Once the first debt was paid off, she would take the monthly amount she was paying on that debt and add it to the amount she is paying on the next debt she is focusing on repeating until all debts are paid. We also encourage setting up and living within a budget to help “find” extra money to pay toward debt or save. We stress the importance of continuing to save even while tackling debt so that when those unexpected expenses happen, you won’t have to reach for a credit card. We highly recommend setting up an automated savings plan to build an emergency fund.
- This is a call to action to you. In your communications work, how can you do more than just tell? How can you tell, show and support?