Defining Financial Health

What does it mean to be financially educated, capable, or even savvy? The answer is subjective and depends largely on personal priorities. However, it starts with a pledge to learn the skills necessary to manage money, and it's a lifetime commitment.

The Consumer Financial Protection Bureau defines financial well-being as people feeling in control of their expenses, having the capacity to absorb financial shock, being on track for meeting their financial goals, and possessing the freedom to make pleasurable choices.

Because it is determined by personal values and goals, there is no perfect path to financial well-being. But, there are some common milestones such as life-long learning, creating a financial plan with goals, and mustering the dedication to stick to that plan.

Our financial lives evolve with age, and learning how to accurately measure and foster our financial well-being should begin early – in fact, the earlier those lessons begin the better because those basic skills are used throughout life. Starting when children are young is critical in today's world of plastic money.

"Children are not actually seeing money since we are almost a cashless society," said Karen Smith, executive director of Montana Credit Unions for Community Development, a non-profit working to increase financial literacy across the state.

As soon as they begin to learn about math, children can also learn about money. Elementary-age students should be able to set goals around money they earn from household chores, money they receive for holidays, or their allowance. By middle school, students should understand the difference between wants and needs (because it's where most of us go wrong). At age 18 comes the opportunity to make financial choices about cars, college, credit cards, and commodities as a legal adult. It's imperative that young people are armed with knowledge before making these decisions.

Sadly, how to establish and maintain financial health is not required curriculum in Montana schools. As part of their core mission, however, credit unions have worked to fill that gap since they first began.

In April, which is National Credit Union Youth month, credit unions make a particular effort to focus time and attention on reaching out to Montana kids and schools. Thousands of students from Sidney to Libby learn about money because of that commitment.

Kevin Mayer, CEO in Sidney at Richland Federal Credit Union, believes so strongly in the importance of understanding saving, spending, and credit scores that he spends a week helping teach finances and economics to local high school students every year. The credit union also provides financial education textbooks for all sixth-graders in the public school. Mayer said taking the time and investing the resources today will help young people in his town become better people in general down the road.

"We – the credit union – need to be there for these young people," he said. "It's our mission."

But, it's not just students.

Representatives at Lincoln County Credit Union in Libby provide one-on-one financial counseling for each member that opens an account or applies for a loan. President Chari Lucas said by giving this type of education the credit union helps members learn how to weigh and make financial decisions, which then helps them more able to provide for their family.

"We truly do care about making a difference in our members' lives," Lucas said.

Learning about money at a young age allows people to better understand and work toward personal financial health, no matter their age. Throughout life there is a road that leads to stress, chaos, and insecurity about money and another that ensures financial freedom with far less worry. The option is obvious, but the choice is up to you.

Detailed information is updated throughout April at http://bit.ly/1C0UKkZ