Opinion: Americans are Facing Financial Struggles Alone — Here’s How Banks Can Step Up

Retail financial institutions are in an interesting position right now. People across the country are increasingly growing dissatisfied with their economic circumstances but aren’t turning to their banks and credit unions as partners in their ultimate success. 

Beyond Finance, a debt consolidation company headquartered in Chicago, recently polled 2,000 adults in the U.S. about their money. The survey found just 13% reported they feel very good about their financial situation, and over half said they feel the same or more disillusioned with financial institutions than they did a year ago. 

The problem is, if banks and credit unions aren’t seen as allies when people need them, those trying to get ahead can falter and frustration can intensify. Not becoming an active participant in a consumer’s journey toward financial health and strength is a missed opportunity.  

The Beyond Finance survey discovered a nugget of positivity amid the negativity. Distrust is becoming a catalyst for personal empowerment. And in tough times, people are forced to learn and take action independently.

It’s safe to say that everyone wants to feel capable in their abilities to manage their money, borrow effectively, and prepare for their future. If they don’t believe their bank or credit union will help them achieve their goals, they’ll take action anyway. Seventy-four percent of the survey’s respondents said they will handle their financial problems on their own.

The problem, however, is that too many people aren’t prepared for the task at hand. Financial anxiety, lack of knowledge, and past errors are significant roadblocks. 

Twenty percent of the respondents say they received no financial education from their parents and 31% say they didn’t get any in school. When people learn strictly by doing, they’re more apt to make expensive mistakes. 

People want to possess financial skills. According to the survey, 51% percent of respondents said the current economic uncertainty has pushed them to improve their financial knowledge, with nearly 60% saying they are planning to increase their financial understanding this year. 

Unfortunately, only half say they have “a lot” of trust in themselves when it comes to managing their finances. 

So where should consumers who are worried about their money or don’t understand what their best decisions would be go to obtain financial information and support? Paying for services doesn’t make sense when bills are mounting.  

In addition to excellent free sources such as on websites such as this, a person’s bank or credit union should be among their first stops when they have questions about their money and credit. The outreach doesn’t have to be warm and fuzzy — just not cold and uncaring. 

If ever there was a time for financial institutions to demonstrate to consumers that they are on their side, this is it. 

Offering education and assistance on the following topics can go a long way toward developing a valuable partnership:

• Preparing for a financial crisis
• Working toward financial goals, even in times of stress
• Managing debt, whether accounts are current or behind
• Using credit cards and loans effectively in a variety of circumstances 
• How to build, preserve, and repair credit scores 
• Ways to keep account fees to a minimum 
• Budgeting tips during inflationary periods 
• Saving and investing during market uncertainty 
• Choosing the right financial products and services  

The more the bank or credit union can establish itself as being on the consumer’s team, particularly when they are struggling, the better. 

After all, when people are in bad financial positions, such as when they’re drowning in overwhelming debt, it can be tempting to blame the lender (at least, in part). 

Credit counselors say they frequently hear their clients say they didn’t know how important it was to get their payments in on time and how high interest rates and fees could become. 

They tell credit counselors that the bank “didn’t help,” or “doesn’t care.” At that stage, even a good bank suddenly seems predatory, whether that’s true or not. 

If the survey highlighted anything, it’s that American consumers are hungry for information and assistance, and are taking action to build their financial confidence in practical, repeatable ways: 

• 69% are either currently tracking or plan to track their spending
• 28% use budgeting apps 
• 28% regularly read financial news 
• 23% listen to financial podcasts
• 22% are talking more openly with family to break the money taboo 

Clearly this shows that banks and credit unions can and ought to jump in and become more proactive. 

When they teach, encourage, and make financial success easy, they can create a bond of trust with the very people who may have turned against them during difficult economic times.