How do you get a 20 something who generally spends and borrows to save for retirement? It’s a real challenge, but so important for them. Just not important today – but tomorrow when it’s often too late.
Well, some university professors think they’ve found a way to shock young people into spending at least a little time focusing on their retirement savings. They are working on an age morphing program. Students can bring a current picture of themselves, and the scanned image morphs the picture into what that person will look like 40 years down the road. With that real vivid and visual picture in front of them, it turns out students are more inclined to spend a little more time, energy, AND savings on their retirement.
Saving or Spending? Credit Unions or Banks?
Most people have a continuous battle between immediate gratification and saving. It’s way more pleasurable to buy something today than it is to save it for long term financial success
Credit Unions have always been about helping you to succeed, financially, while banks are mostly focused on marketing borrowing choices. There’s a big difference. In Michigan, Credit Unions have now started a lottery-type savings program. When you open a savings account, you’re entered into a draw for cash prizes ranging from $100 to $1,000 a month. And, once a year, someone who’s opened a new savings account will win $100,000.
What an incredibly great idea to get people to commit to savings, while still giving the “instant gratification” part of their brain a reward. Plus, it’s been successful beyond belief. In one year, 16,000 people have opened new savings accounts with a total of $30 million. THAT is the real reward down the road. Remember that we talked a few months ago that over two-thirds of people don’t have enough funds to miss one pay period! Just saving around $700 for an emergency fund puts you into a better financial state than two-thirds of the country.
The Credit Unions in Iowa now want to get on board with a similar program. But you cannot imagine the fight that the Bankers Association has put up to do whatever they can to stop this program from launching. Why? Because the last thing banks want is for people to have a lot of savings. After all, people who save don’t borrow money, and that would cost the banks a whole lot of income.
There’s a reason why I deal with Servus Credit Union and why they have an entire section in the It’s Your Money book. This is just another reason to get on board with someone who wants to help, not throw obstacles in your way, and actually profit share at the end of the year.