As Financial Literacy Month comes to a close, financial institutions and organizations have enacted various campaigns to educate members and customers across America. The Banking.com staff has been closely watching some initiatives including NCUA’s Twitter campaign and the American Bankers Association’s 16th Annual Teach Children to Save Day, and in May we will reveal how our readers endeavored to help their community from our very own poll.
To better understand the community they serve, Philadelphia Federal Credit Union (PFCU) in Pennsylvania revealed the results of its first annual Financial Literacy Survey. The survey researched the financial knowledge of Philadelphia-area residents, taking particular interest in their saving practices, spending habits and financial attitudes. PFCU’s research revealed that more than one-third of Philadelphians are in critical need of improving their financial condition, indicating they were not able to save any money in the past 12 months. Additionally 45 percent of Philadelphia credit card owners typically carry a balance month-to-month and 79 percent of survey respondents were less than “very successful” at spending within their budget in the past year.
As a result of the survey findings, PFCU is ramping up its educational programs and looking to better cater to its current and prospective members. Banking.com spoke with Philadelphia Federal Credit Union’s Accredited Financial Educator Karl J. Bernhard about the survey findings and what they mean for the institution and financial industry at large.
Banking.com (BDC): What survey statistic did you find most surprising, and why?
Karl J. Berndhard (KJB): I found it most surprising that more than one-third (37%) of Philadelphians were not able to save any money in the past 12 months. This tells me that Philadelphians are in critical need of learning the skills to better manage their money. In response to this finding, PFCU is expanding its free financial education programming now through May 31 to the public in an effort to instill healthy financial habits.
BDC: For Americans and Philadelphians trying to get their financial condition in shape, what small steps can people take to try and improve their financial health?
KJB: I always say there are five steps you can take to take control of your finances immediately. The simple steps include – create a budget, track spending, open a savings account, check your credit report and then last but not least, take advantage of financial education that is available to you like PFCU’s free seminars on budgeting, saving, and credit.
BDC: What tools and/or services do you offer to your members to help them budget their money?
KJB: We offer a Budgeting & Credit Seminar on a regular basis to our members that helps them understand the importance of saving and tracking where their money goes. We give them the tools they need to create a realistic budget and manage their credit.
BDC: With the surge in online and mobile banking, do you believe that having tools available to members 24/7 is helping improve their financial literacy and financial health?
KJB: It’s certainly making the information more available to them and making it easier than ever for people to track their spending. In addition to offering free 24/7 online banking, we plan to have a mobile app up and running before the end of the year. We also recently launched a Facebook and Twitter page and regularly post and tweet financial tips and advice.
BDC: How have your members reacted to the survey findings?
KJB: I think it is human nature to be curious about how other people are doing financially. This survey for better or worse shows Philadelphians that they aren’t alone. Seventy nine percent of Philadelphians haven’t been very successful at keeping spending within their budget during the past twelve months and 84% of Philadelphians surveyed consider themselves less than very knowledgeable about personal finance. The good news is there are simple steps everyone can take to improve their financial condition and through our financial education seminars we are making a better financial future accessible.
BDC: What do you predict will be the focus of your financial literacy campaigns and annual survey next year?
KJB: Good question. I think it will be important to continue to take the temperature of Philadelphian’s wellness on an annual basis so that we can be sure our financial education seminars and other services we provide our members are fulfilling their needs and providing the greatest value. Many of the questions we ask Philadelphians will remain the same. Hopefully the results will improve!
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