Millennials and Credit Unions: What's the Deal?

It would appear at first glance to be a perfect match — millennials and credit unions. After all, this is a group known to care about the community, with an interest in transparency and a general mistrust of big banks. So why do so few in this age group know what a credit union is? In a recent article including man-on-the-street interviews of millennials, most had no idea what one was. One participant said it was a type of bank. Another said she joined a credit union because her mother told her to, but was unaware of its benefits. The others were utterly clueless.

Who are millennials?

It’s a generation comprised of people born between 1980 and 2000 — the largest demographic group in U.S. history — representing more than one-third of the country’s total population. Millennials are well-educated, with 34 percent having earned a bachelor’s degree (many millennials have yet to reach college age). They are digitally savvy, checking their devices on average 43 times per day. (The behavior of my millennial daughter says this may be on the low side.) They are also relatively affluent and highly independent.

Why don’t millennials know about credit unions?

This is a strange conundrum — with their level of education and constant connectivity, it seems odd that they wouldn’t know what a credit union is. And, where the heck are they putting their money? One survey given to bank customers aged 35 and younger, found that the vast majority of this group chose their financial institution based on a recommendation from a friend or family member. Those recommendations tended to lead to large banks rather than regional or local financial providers — regardless of the person’s needs.

Along with this general lack of research when choosing an institution (which most people stick with for a long time), turns out many Americans know way less about their money than they realize according to a study from the FINRA Investor Education Foundation. While there are more financial literacy programs in schools, these tend to be optional — meaning that kids learn about finances from their parents or perhaps peers.

Talk to your kids about money

Let’s be honest. By the time they enter college, kids should know the basics: How to balance a checkbook, what a credit union is vs. a bank, what a mutual fund is, and the value of saving for retirement — the earlier the better. So talk to your kids and help them make smart financial decisions —whether they are choosing a financial institution or trying to understand compounding interest. After all, by the time this group is ready to retire, social security could be a distant memory.