ST.PAUL, MINN. (July 14, 2016) – Brian Volkmann knows saving money is one part education, one part personal discipline and one part opportunity.
“You have to learn what savings can mean for you and commit to doing it. And then you need institutions like credit unions offering you creative ways to save,” said Volkmann, Affinity Plus’ executive vice president and chief financial officer.
To that end, Affinity Plus Federal Credit Union has created a three-pronged approach to teach, promote and encourage savings. It combines:
• financial education through the Affinity Plus Foundation;
• WINcentive, a unique “prize-linked” savings account;
• lower-interest auto loans paired with a savings account.
The numbers demonstrate Affinity Plus’ success, Volkmann said.
“From July 2015 through June 2016, we taught financial education to more than 5,600 people. We now have more than 1,500 members with WINcentive savings accounts totaling nearly $715,000. And, in a little over two weeks in June and July, 27 members took out auto loans that will save them thousands in interest. Plus, they’ll have savings waiting for them when the loan is complete,” he said.
The most-recent effort – the Savings Accelerator auto-loan option – can be applied to any new or used auto loan, said Nicole Haverly, senior portfolio manager.
Savings Accelerator especially targets those with a greater need to establish or improve their credit history, and improve their savings habit, she said.
Members agree to make an initial payment to a savings account that’s equal to their monthly loan payment. Then, they deposit $15 monthly after that. At the end of the loan the saved money is transferred to a regular savings account.
“Members have asked, ‘What’s the catch? It seems too good to be true.’ But it is that good,” Haverly said. Longer term, Affinity Plus may offer this approach on other consumer loans, too, Haverly said.
“Savings Accelerator is new, so we’re waiting to see the impact this has on members,” she said. “But we’re confident we’ll hear the stories in a few months or years of how this program got members out of a financial downslide and into financial freedom.”
WINCENTIVE SAVINGS ACCOUNT
WINcentive “jumped out of the gates,” Volkmann said, with 60 accounts on day one, 400 hundred within one month and now more than 1,500.
“People understood immediately how amazing it is to be eligible for free money monthly, quarterly and annually. All they have to do is commit to save $25 each month,” he said, adding that the more money deposited into a WINcentive Savings account, the more chances to win.
Volkmann said WINcentive is fun, but what underlies the effort is serious. Bankrate.com reported in early 2016 that 63 percent of U.S. households don’t have enough savings to cover a $500 emergency. One in three families has no savings at all.
“There is a national savings crisis, and we want to be of the effort to encourage and reward savings. Our members win, no matter what,” he said.
The Affinity Plus Foundation and credit-union employees partner with local organizations, including BestPrep, Junior Achievement and local colleges and universities, to lead financial-education classes across Minnesota, said Stephanie Musgrove, Affinity Plus business development specialist.
“In every class or presentation, we talk about savings being a staple of any budget or financial plan. We offer real-world strategies for how to make savings easy and discuss the importance of how paying yourself first is a first step toward financial wellness,” Musgrove said. “When you couple that education with the products we offer like WINcentive and Savings Accelerator, we’ve created a formula for a powerful, life-long impact.”