LANSING - Programs that teach children financial skills are on the rise, according to banking experts.
Gail Madziar, vice president of membership and communications at the Michigan Bankers Association, said the involvement of member banks in financial education programs has increased in recent years. Innovative education efforts that encourage healthy financial habits among youth are especially popular.
"Many of our banks have in-school banks where kids apply for jobs to be tellers and loan officers. It's actually a bank - kids can come in and make deposits and they have real accounts. It teaches kids hands-on how to deal with money and they learn what interest is and how compound interest works," she said.
For example, Thumb National Bank & Trust Co. operates an in-school bank at Laker Elementary School in Pigeon. County National Bank runs an in-school program at Lincoln Elementary School in Hudson.
She said programs that promote financial literacy are good not only for the economy and the community, but for banks as well.
"Having an educated consumer is the very best customer a bank can have. Banks want them aware of what's available for them financially and how to best handle their money.
"Banks want successful customers. They want someone who can manage their checking account, has a savings account and gets a mortgage. They want a lifelong affiliation," she said.
Midland-based Chemical Bank, which has 142 branches throughout the state, says establishing customers from a young age is important.
John Hatfield, Chemical Bank's first vice president and director of marketing, said everyone should learn to establish a financial foundation for the future at a young age. He said Chemical does that through focusing on savings lessons for children.
In addition to offering youth savings accounts without service charges, the bank visits schools and teaches children about the importance of saving and setting financial goals through lessons with its mascot, Dollar the silver squirrel.
From October 2009 to October 2010, Hatfield said Chemical reached nearly 9,000 students. In 2010, it won an MBA financial literacy award.
Hatfield said that he hopes its financial education efforts will reach more students this year. For National Financial Literacy Month and the American Bankers Association Teach Children to Save Day, Chemical visited 75 elementary schools in one week in April and reached nearly 5,000 students.
Madziar said that she hopes increased financial education emphasizing savings will help children become better consumers and avoid economic problems and debt.
"When you can teach a child to understand their finances, they can become empowered and feel that they can make good decisions as they get older. Teaching kids to save, even if it's just a little bit, is the most important thing you can do as far as ensuring their financial future, especially now with all the economic problems in Michigan," she said.
There's still an education void that needs to be filled, said Jason Moore, public relations director for the Financial Planning Association of Michigan.
"Not having enough education about what it takes to be able to provide for their own financial wellbeing and financial independence is the biggest barrier people have to saving. Even though there's a stronger push for financial literacy, I don't think we're there yet," he said.
"When you see the number of kids that truly understand the value of money and savings, I think there is definitely room for improvement," he said.