Local kids bank on the future

Local kids learn to manage their funds
Local kids bank on the future
Photo courtesy of Kristel Renn/STAR

When Summit Credit Union CEO and President Kim Sponem thought of giving local youth a chance to learn about finances by operating their own credit union, she was trying to prevent a problem she sees in adults.

“One of the things we see is it’s a lot easier to prevent financial challenges than to fix them,” says Sponem, who started the Saving to Achieve Results, or STAR, program in 2005. She says that idea was born out of a need for “impactful education” among kids. “We wanted young people to imagine their future and save for their goals with a long-term, hands-on experience,” which, she says, is “empowering financial education.”

Offering savings accounts to kids is nothing new as many financial institutions have them, including many local banks; but credit unions appear to lead the way in operating fully functioning credit unions run by students in schools and youth centers. In Wisconsin, schools in at least 57 cities ran credit unions in 2015. STAR, however, claims on its website that it’s the only youth-chartered credit union in the world.

Sponem says the program was started because many at-risk families do not use banks or credit unions. So Summit launched a STAR Credit Union in the Boys and Girls Club of Dane County. The organization also started three Summit Credit Union branches in three Madison high schools: East, La Follette and Memorial.

Children can join for as little as a quarter, and STAR pays a 5 percent interest rate. The idea is to create a hands-on experience for youth, who can apply to work at STAR, become “teller of the day,” write financial blogs and participate in annual meetings.

“The huge and unique thing about STAR is that kids have a huge stake in it,” says Kristel Renn, youth credit union leader at Summit. “Traditionally, their parents are unbanked, and this may be a kids’ first experience with a bank. Kids learn each area of the credit union, and they learn about saving and budgeting.”

Alexcia Brown, 15, joined STAR eight years ago when her mom gave her $5 to open an account.Local kids bank on the future

“I was so excited,” Brown says about becoming a member. Today, she works for the Madison Children’s Museum and writes a blog for STAR. Using lessons she learned from Renn, Brown divides her pay into several savings accounts, setting funds aside for college, a trip to France and other goals.

“I learned to make a budget,” Brown says. “You still get to spend what you want, while saving for what you need.”

STAR has 668 members and opens about 70 new accounts a year. Members can keep their money deposited at STAR throughout high school. Summit also offers other programs aimed at high school and college-aged students.

At least two other Madison credit unions–Dane County Credit Union and Madison Credit Union–also provide special savings accounts for youths.

Patti Zarling is a writer based in Green Bay.