Payment Industry Insider

To follow up on the savings conversation of a couple of weeks ago, I read an article recently by Sandra Simmons, President of Money Management Solutions. In the article, “10 Mistakes People Make With Their Money”, a couple of things struck me:

1. People habitually spend more than they make

and

2. People buy products and services based on WANT rather than on NEED.

Spending more than you make is largely a product of easy and readily available credit.

Buying what you want versus what you need is a discipline issue fed by a dazzling array of the latest and the greatest things that everybody else has.

These two behaviors are pretty prevalent today and much in need of being modified. If they are, and the subsequent changes made are turned into savings, two things would be helped:

• high consumer debt levels would be lowered
• low consumer savings levels would be raised

I believe that credit unions are agents to help bring about this modification.

Credit unions are in a unique place to help consumers with some of the basics of prudent financial management, such as budgeting, balancing a check book, savings and responsible credit use. All of these things are basics that many of today’s consumers have forgotten in the rush of excitement during the years of plenty (the 90’s thru mid 2000’s). Or, in many cases, never knew well, if at all, because they were never taught.

So, credit unions, read the article, “10 Mistakes…” and be better prepared to know how to interact with your members. Know the right questions to ask them as you are helping them get on a prudent financial course of behavior.