The Federal Reserve reported household debt reached a new all-time high of $13.21 trillion in the first quarter of 2018. Clearly, the economy is growing, lenders are lending and borrowers are finding the money they need. But at what cost?
The rate of student loans, vehicle loans, and credit card loans is growing and credit union members are handling their increased debt by making minimum payments, which guarantees they will have this problem for years to come.
Behavioral Economics (BE) provides some techniques that can nudge members to healthier financial behaviors, especially around tax season.
Why tax season? 84% of households making less than $51,000 expected to receive a tax refund averaging between $2,100 - 2,500.
When asked what they planned to do with it, 32% indicated they had no real plans.
Tax Time Savings Program encourages your members to save some or all of their tax refund. And it works: In implementations last year 27% of consumers exposed to the program participated and they elected to save on average 35% of their tax refund. With those savings, they can pay down their debt. Win-win!
Don’t miss out. Join other credit unions that are leveraging BE to help their members improve their financial well being.