How VyStar Credit Union is helping to ensure the financial success of today’s youth.
VyStar Credit Union is an MDC owner headquartered in Jacksonville, Florida. Their innovative approach to teaching financial literacy to the youth in their community aligns with MDC’s own mission to improve the financial well-being of members across our ownership and with the specific work MDC has done targeting the student loan debt crisis.
Think of the subjects you were taught in school. We’re willing to bet that the obvious came to mind first: English, math, science, history and so on. What probably wasn’t at the top of your list was financial literacy, most likely because it is not a required subject in most U.S. schools. Unfortunately, the issue with a curriculum that does not focus on educating students about finances is that it sets children up for success in their educational careers but failure in their personal financial lives.
“Finances have a direct impact on everything we consider to be important in our life,” says Michael Rathjen, Vice President of High School Programs at VyStar Credit Union. “The better prepared someone is to make financial decisions for themselves, ultimately the better prepared they are for their overall future.”
A well-rounded education must include knowledge of budgets, savings, and other important financial indicators, like credit scores and debt-to-income ratios. Even if they graduate with a degree from a top-tier institution, students who do not receive this type of education are more likely to enter adulthood without the tools necessary to successfully navigate our complex financial system, and their lives can quickly derail if they do not have the foundation of proper financial skills to guide them.
The proof is in the numbers: according to a study conducted by the National Bureau of Economic Research, 40.2 percent of participants who had low levels of financial literacy depended on their parents, friends, and acquaintances as their main source of financial knowledge, compared to 20.8 percent of those who received the highest levels of financial literacy. And when debt is accumulated early in life, it can follow young adults for years and impact their ability to buy a car or home or provide for their families.
“Eighty percent of Americans are living paycheck to paycheck. That puts things into perspective for you,” says Faith Ledbetter, High School Branch Coordinator at VyStar Credit Union. “There’s a need [for financial literacy] not only in our high schools, but everywhere.”
The key to helping our children avoid experiencing financial hardship as adults is to equip them with financial knowledge early. Students are more likely to stay out of debt when they are taught the importance of saving and planning. It’s never too soon to start teaching children about financial matters and demonstrating sound financial practices. That is the founding belief of the VyStar Academy of Business and Finance, a program created by VyStar Credit Union to help school districts deliver quality financial education to students.
Promoting financial education among our youth is one of VyStar’s largest philanthropic initiatives. Since the VyStar Academy of Business and Finance was founded in 2007, it has partnered with six school districts throughout Central and Northeast Florida to open 16 high school credit union branches (with still more to come), and it has provided more than 49,129 students with financial education through the High School Credit Union Branch Program and “On My Own” Reality Fairs.
High School Branches: Giving Students Hands-On Financial Experience
VyStar’s High School Credit Union Branch Program was developed over 12 years ago, and its objective is to teach students one of life’s most challenging concepts: personal financial accountability. What’s unique about the program is that it provides students with hands-on, real-world experience in understanding the inner workings of key financial services, including loans, credit cards, investment accounts, and more—something that cannot be taught in the classroom. It teaches children the importance of saving, good credit, and sound money management, helping them avoid the many crippling effects of poor financial choices. The program helps students not only start off on the right financial foot, but also develop important skills that improve their chances for career success.
“If you want your children to learn at a young age how to manage money, to learn how to work in a professional environment, this is the program that you want to be involved in,” says Ledbetter. “This is our future.”
Each of VyStar’s high school branches is run by 12 Student Manager Interns—under the supervision of the county school system and VyStar staff—and is open five days a week during school lunch hours to serve students, faculty, and staff. The interns are VyStar employees who receive nine weeks of paid instructional and on-the-job training the summer before their internships begin. They are encouraged to leverage what they learn in the program throughout their lives and pass it on to future generations. They also teach fellow students the financial skills they’ve acquired: All students can use branch hours to talk to an intern and/or manage their accounts.
“It’s a paid internship, so [the students] work with us at our support branch all summer long, they work [in the high school branch] during the school year, and they work [at the support branch] on weekends [during the school year] as well,” says Ledbetter.
In the last 12 years, VyStar has provided 1,152 paid year-long internship opportunities. During the 2017/2018 school year, more than 4,000 students were taught financial literacy lessons by student manager interns. Many students who have participated in the program have even gone on to work for VyStar after graduation.
“The program truly is a win-win-win scenario for everyone,” says Rathjen. “Not only do the students benefit from the opportunity, but the school benefits from having a program that’s attractive and helps students be more engaged. And VyStar gets to live out our initiative of serving our community and teaching financial education.”
Reality Fairs: Putting Classroom Learning Into Practice
When the Florida Department of Education created 26 new personal finance standards as part of the state’s overall curriculum requirements in 2013, VyStar was ready to serve with our “On My Own” Reality Fairs. This hands-on simulation program allows teens to experience their futures in a tangible way, helping them emotionally connect to otherwise technical content.
The Reality Fairs address 22 of the 26 standards. With so many standards for educators to teach in the classroom, making it difficult to dive deep into personal finance, our reality fairs are a robust tool to help supplement and solidify what students learn in school. Approximately 23,933 students have participated in an “On My Own” Reality Fair.
At the fairs, each student assumes they are 25 years old and the primary/sole supporter of their household. After being assigned a family scenario, credit score, occupation, and monthly gross income, each participant learns how to manage their budget.
In the simulation, they make spending choices for expenses like housing, groceries, utilities, transportation, and more. The student then “pays” with a check or imaginary debit card and subtracts the amount from their monthly budget. Each student is also challenged with unexpected expenses, allowing them to learn how life decisions and creative solutions impact their finances.
“Having a plan, sitting down and thinking through what you want to accomplish—whether it’s going on vacation, paying for school, buying a new car—setting goals that are specific and measurable, creating more income and minimizing outgo, tracking spending … These are all fundamental basics you can use no matter what stage of life you’re in, no matter what your endeavor is,” says Rathjen.
Learning how to handle money is a matter of “when”—not “if.” VyStar is committed to working with Florida educators to reach today’s students with critical financial education. When we take the time to prepare our children now, we can help them avoid taking the time to repair financial mistakes in the future.
For more information on VyStar Credit Unions programs, please contact Michael Rathjen, High School Program Vice President.