Every day, the content team at Zogo works to make our app’s bite-sized lessons in personal finance one of the best financial education experiences in the industry.
One question we’ve been pondering lately is: How can we help our users understand the real-life importance of the lessons they’re learning in our app?
It’s one thing to provide the definition of an emergency fund, it’s another to help young people fully grasp why they need one.
So we decided to send out a survey to all of our users, asking that question: What was your worst financial decision? What led you to make it? If you could go back in time, what would you tell yourself?
The responses poured in, and the answers were astonishing:
- “I got talked into a terrible deal when I bought my first car. I went to the dealership and ended up financing, or taking out a loan, for 22% interest. For comparison, in the United States the average interest rate for an auto loan is about 5%.”
- “I decided to pay off my student loans on my credit card… it made my thousands of dollars of debt three times more expensive.”
- “I was so eager to start investing that I allowed a shiesty financial advisor to lead me astray. I was naive. I was too trusting of the advisor and got sucked in by his big money sales pitch.”
- “I made the mistake of neglecting an emergency fund and instead blowing every paycheck on stuff that didn’t matter. Eventually, I had no money for a car, transportation, books, doctors visits, groceries, my phone bill… I had no credit. Financially, I was spiraling.”
- “I enrolled at an expensive, private college for my bachelor’s degree because my parents pressured me into it. I didn’t want to go, and I dropped out after the first semester — but not before driving myself more than $20,000 in debt at the age of 18.”
The thing these responses all had in common? Some version of the phrase “I just didn’t know any better.” When the user explained how they came to make this financial decision they later regretted, nearly all of them named pure ignorance as a factor.
Financial literacy isn’t just a buzzword. It has the power to change lives, and to build livelihoods. It can empower individuals to build a secure and successful life for themselves. It can mean the difference between thriving and surviving for thousands of Americans.
But the fact about financial literacy is that it’s not taught in schools — and it’s not always taught around the dinner table, either.
At Zogo, we think financial institutions themselves have the power to make a difference and bridge that gap. Credit unions and banks have the power to enrich the lives of their members and communities through the power of financial education.
It doesn’t have to be complicated. At Zogo, we started with a simple structure: five snippets, five questions. We put together an app that used this broken-down format to explain complex but critical topics like saving money, buying a car or getting health insurance.
And yet, every day we receive messages from our users saying how our app has made an enormous difference in their financial lives.
We’re determined to keep empowering young people (and adults) across the country to gain the knowledge they need to build a bright financial future — and we want financial institutions across the country to be a part of it.
How is your credit union investing in the power of financial education? Oh — and what was your worst financial decision?