Starting next year, Kentucky's public high schools will require every incoming freshman to complete a financial literacy course before graduating.
That's a worthwhile effort, considering how many Kentuckians struggle to manage their finances. Nearly half lack a rainy day fund. Last year, 16 percent of Kentuckians spent more than they made in income.
These adults can't go back to school. But there are resources available to help them improve their personal finances -- with credit unions paramount among them. For decades, credit unions have quietly served as the Bluegrass State's financial backbone.
Kentucky is home to more than five dozen credit unions that boast almost 900,000 members. That's equivalent to one in every five state residents.
Though credit unions offer traditional banking services, they differ from big banks in many ways. Perhaps most significantly, credit unions are not-for-profit institutions owned and operated by their members. Anyone who banks with a credit union is also a partial owner. Every member has a say in how a credit union operates, regardless of how much money he or she deposits.
Rather than relentlessly seeking profits like big banks, credit unions return their earnings to their members in the form of lower fees and better interest rates. In 2018 alone, Kentucky's credit unions delivered $78 million in benefits to their customers.
Credit unions also invest significant time and effort to help their members navigate the world of finance. Because they're member-owned, they have a strong stake in ensuring that their borrowers understand the ins and outs of their loans -- and repay successfully.
Unlike big out-of-state banks, they're invested in their communities. A borrower struggling to make his payments isn't an abstraction -- he's a neighbor, and a fellow member of the credit union.
That's one reason why credit unions emphasize financial education, with free resources like infographics, videos, and calculators that explain the different features of loans, credit cards, and the like. Kentucky's credit unions also recently pledged to provide funding for the state's new Financial Empowerment Commission, which was created to bolster folks' money management skills.
Further, credit unions empower their members to improve their own financial standing. For example, many credit unions offer special loans for people who want to improve their credit, whether because they have a short financial history or because their credit score is low. These "credit-builder loans" give borrowers small sums that they can easily repay over a few months.
When members make payments on time, they improve their credit scores. That enables them to borrow bigger sums on favorable terms for major life events down the road, like purchasing a home or a car.
This dedication to members' financial well-being explains why 60 percent of Americans find credit unions trustworthy, according to the 2014 Chicago Booth/Kellogg School Financial Trust Index. By contrast, only 30 percent trust big, national banks.
Kentuckians looking to get a handle on their finances just need to stop by their local credit union.
Paul Adams is CEO of C-Plant Federal Credit Union, which is headquartered in Paducah.