When I graduated college in 2014, I was excited to start my journey as a real “adult”.
Have my own job
Make my own money
Get my own place
Make all the right money decisions.
Easy, right? I felt ready! Then my student loan bill came in the mail. Since I owed a bank/the government $70,000+ I realized that I’ve been making adult decisions since the age of 18. The real work of managing my finances hit me like a ton of bricks.
My student loan bill was $864 dollars a month…for at least the next 10 years. But that wasn’t the only thing I had to worry about. Rent, Phone, Car and life were all expenses were required “bills of life”. To manage, I put my head down and continued to grind it out in a brutal industry, the car business.
60-70 hour work weeks were normal and unpredictable income in sales was my reality. I had my goals, so I stuck with them and kept a smile on my face while doing it!
Throughout my almost 10 years in the car business, I had the opportunity to experience real people and their real finances from all walks and talks of life. Rich, broke, recently graduated, families, divorced. It ran the gamut.
One thing my customers had in common was that 99.9% of them carried debt. Most, a ton of debt.
Few leveraged debt as a tool and most leveraged debt as a need.
They needed to borrow for the necessary things in life to survive while few understood how debt really affected their ability to grow financially well.
We all need some form of debt in many points of our lives. I felt this exact same way with my debt when I walked away from buying my first home after saving for years because I knew taking out more debt would saddle me into financial anxiety of bills.
I realized how daunting adding more “monthly payments” to their budgets made people feel. It’s a s*** experience. Many financial institutions praise how awesome their lending is and how they have the best products for their customers.
But what’s awesome about it? Login, make a payment, see an enormous balance (normally) and get very little insights on how your progressing? Consumers don’t care about your financial products. They care about what they can help them do. And at the end of the day, it’s a commodity. Not a unique product that they can’t find anywhere else.
Financial institutions talk about their ability to empower consumers, but they really don’t walk the walk to empower consumers to the next stage. It’s time to walk the path so your customers can sprint. How are you empowering your members and customers to achieve their intended financial lives?
Debt is a good tool in some cases when it is matched with an experience that won’t negatively affect your customers.
Why can’t we approach debt repayment as an experience that takes us to the next level?
An experience that helps us feel good and feel progress. An experience that aligns with our goals and dreams. An experience that is built to empower consumers.
The experience of debt and debt repayment leaves you with an opportunity to build a better relationship with consumers. It’s the way to show consumers that we’re helping their bottom line and will lead to improving your bottom line when the time comes for consumers to make their next financial decision.
Help consumers with problem 1, they’ll likely come to you for problem 2. Help them with problems 1 & 2, they’re defiantly coming to you for problem 3. The job of a lender/Credit Union/Bank is to be a financial problem solver. It needs to be changed.