Wednesday, January 23, 2008

Savings Revolution

Let's Start a Revolution...

Anytime the word “revolution” is used I immediately think of the destruction and rebuilding of a government. If you look at revolutions in history you see government systems being removed and rebuilt. Take American history for example, the American Revolution caused the destruction of British rule over the colonies and building of a democratic government. So what does this have to do with saving money? The destruction of a savings environment has been happening for a few decades, the reasons that individuals fail to save are numerous: the rising cost of living, value of the dollar, and the need to have more toys then the neighbor. All are reasons that people would rather turn to borrowing than saving. Members ability and motivation to save has eroded overtime.

What can be done about this? For a revolution to take place there has to be rebuilding. The Filene i3 innovators put their brains together and created the idea of a “Savings Revolution.” The Savings Revolution is the idea that through social media and credit-union collaboration, people can change their financial lifestyles to save money and reduce debt.

The family that comes closest to or exceeds its financial targets is named winner and is given a substantial prize usually around $10k. The revolution occurs by other individuals and families seeing the changes that the participating family is making in the challenge and they participate at home, by using online resources or resources at their CU to make changes to their financial lifestyle. Ultimately this will combine savings with reality TV and it will lead to a revolution of how thousands of CU members, and non-members save money.

But will it work?? That is a great question, it is early in its development. GECU of El Paso implemented it in 2007 and they had a lot of success, their deposits and accounts went up, but most importantly they helped countless members change their saving habits. In 2008, there are 4 CUs looking to implement the Savings Challenge.

This is just an introduction to the idea; there will be a lot more about the Savings Revolution in the near future. Teaching members to save should be at the forefront of the Credit Union Movement, how better to do that then through a REVOLUTION!!


Revolutionize said...

Kent, your references to the rebuilding of the American savings environment are right on and this is exactly the goal of the Savings Revolution movement. Having had the privilege to participate on the i3 team that helped take the GECU revolution and build a foundation for the nationwide movement I'll try to add some insight on the journey so far.

Americans are great at spending. GREAT at it. Imagine a nation of savers where being thrifty and cost conscious is cool. How do you entice the average consumer to switch teams?

Credit Unions are great at saving, that is what we do and we do it well. What we can often lack is the cool factor. So how do you engage your members and help them care about saving at an everyday, granular level.

Bare with me, I have a point.

I just pulled up the television listings for this evening, and to be fair I'm only going to look at the major networks (NBC, ABC, CBS and FOX). Four networks and four reality shows in the coveted 7-9 pm slots covering 5 out of 8 programming hours. American Idol, Wife Swap, Super Nanny and Big Brother (Season 9 to boot). Do you notice a theme? Do you think that we might have something here with the reality show? ‘Sure Kathleen, the next pop star is way more exciting than personal finance’… or is it? American Idol aside people are tuning in to watch people just like themselves struggle with Marriage and Child Rearing. Had you bet me lunch 10 years ago if I thought a show about effective parenting techniques would be securing the 8 o’clock hour on a major network… well, I’d be picking up the tab.

So to take this full circle, the Savings Revolution connects consumers who are struggling to save, Credit Unions who are great at saving, and the proven method of reality programming to get the masses involved. How can it fail? Imagine every state launching their own challenge and filming just 10 minutes a week with each family. Given 90% would end up on the cutting room floor I’m certain that the footage that would reach into each American home and make savings a reality would be enough to last a season or three. The whole while reinforcing that your local Credit Union is on your corner in
Anytown, USA and ready to help.

Kent Sugg said...


You are absolutely right, that americans are great at spending, and just as often as they spend their own money, they are spending somebody else's. WE are in a borrowing nation. It is great for profit but can destroy alot of members.

Credit Unions exist to provide members with affordable options to borrow and save money. We do a wonderful job of meeting that. We do make savings affordable, but another part of that we need to help educate them on how to save when the rest of the world is only educating them on how to spend. The savings revolution does just that. In the right hands and with the full backing of the CU movement the Savings Revolution could really be on of those shows that captures a TV audience and gets them coming back to watch week after week and year after year.