The latest economic news is making Americans poorer and poorer. In fact, recent reports indicate that two-thirds of Americans live paycheck to paycheck. In addition, it is not only those who live close to the poverty line who are struggling. Fortune.com pointed to a new report by LendingClub that shows more than a third of paycheck-to-paycheck consumers in the US make at least $250,000. Undoubtedly, inflation is affecting how Americans of all income levels manage their budgets.
The reality is that many consumers in North Dakota and South Dakota, including credit union members, are struggling today. Who do they turn to when their financial situation hits rough water? Should they keep swimming and hope for the best? Or should they be looking for guidance on how to stay afloat – and maybe even safely reach the shore of financial prosperity?
Nearly two years ago, the National Credit Union Foundation began leading credit unions across the country on what they called a mission “Financial well-being for all.” What does that mean? Financial well-being for all is about motivating and supporting individuals to make sound financial decisions. Financial wellbeing is central to the mission of credit unions in their communities and is deeply embedded in their structure; They want to help members achieve their financial dreams.
Credit unions also have a long history of helping consumers through tough times. Since their founding days in the United States in the early 1900’s, themed credit unions have thrived “Not for profit, not for charity, but for service.” During the recent pandemic, credit unions have done so much to help both consumers and small businesses that they have become known as such “Financial First Responders” from many in the trade.
What exactly can a local credit union offer to help its members feel financially secure for their future? Let’s start with the average savings a family makes from membership alone. Credit unions provided $12,557,606,745 in direct financial benefits to the nation’s 127,848,853 members in the 12 months ended December 2021, according to the most recent 2021 Annual Membership Benefits Report released by the Credit Union National Association. These benefits are equivalent to $98 per member or $206 per household member. In the Dakotas, these savings are even greater: North Dakota credit union members save an average of $118 per year, or $249 per household; South Dakota members save $144 per year, or $302 per household.
While that’s a good start, credit unions offer a lot more. Many have certified Credit Union Financial Counselors (CCUFC) on staff and offer counseling at no fee to members. These trained individuals are professionally prepared to help members in financial difficulties. The Dakota Credit Union Foundation recently approved a grant issue for local credit unions looking to add a financial education component or CCUFC to their employees.
In addition, many credit unions will offer “Skip a payment” programs for a minimal fee (often the fees are donated to a charity) to allow members to cover unexpected expenses and avoid damaging their creditworthiness with missed payments. Other options for members in good standing can include loan modifications, budgeting assistance, not to mention lower interest rates on loans and lower fees on many services.
Whether a consumer works with a local credit union, a small community bank, or even a large financial institution, being proactive about your financial situation is crucial. If you are swimming upstream against a strong financial current and feel you need help, contact your financial service provider(s) as soon as possible to discuss your unique situation. You can offer a financial one “Rescuer,” But at the very least, just like a lighthouse guides ship, they should be able to guide you to safer waters.