Financial Literacy and Financial Education Tools with Banzai

Today we are joined by Alex Kay, CEO at Banzai, a financial education partner with First United. Alex discusses the topic of financial education and the resources available, for free, from First United, online, and in local schools. Listen in for more and find these powerful financial education tools at MyBank.com/education

Transcript

Announcer: Welcome to the “What Matters Most Podcast,” presented by First United Bank & Trust. That’s My Bank. Visit us today at mybank.com.

Eric: Hello, and welcome to “What Matters Most,” a podcast all about finances, community, savings, and security for you, your family, and your business. This podcast is brought to you by the helpful folks at My Bank, First United Bank & Trust. I’m your host Eric Nutter, and in today’s episode, what matters most is financial education. And for this helpful discussion, I am thankful to be joined remotely today by Morgan Vandagriff, the CEO of Banzai, a financial educational partner with First United. Hey, Morgan. How’s it going today?

Morgan: Great, Eric. It’s really good to be with you today.

Eric. Yeah, I know. I really appreciate you joining. And we’ve actually scheduled to talk several times about several different topics related to financial education, but I appreciate you joining me here today, and I want to learn a little bit more. Let’s tell our audience a little bit more about your background and the background of Banzai.

Morgan: Yeah, happy to do it. So, 14 years ago, I was working in my first job out of college. I was hired into the private wealth management group of a mid-sized asset management firm on the East Coast, and it was a really fascinating job, definitely drinking from a fire hose, especially for somebody who just graduated from college. And to be able to have that level of intimate insight into the affairs of lots of wealthy families spread all across the United States and seeing, you know, lots of examples of success as well as examples of families that, unfortunately, were not managing their wealth so well, it was, you know, an education that I wouldn’t have been able to put a price tag on. And one of the most fascinating things was to see the worry that our clients had over the future welfare of their children. And, you know, Eric, you might be thinking, like, “Why on earth?” You know, these people are extremely wealthy, multimillionaires at a minimum, we had a client who was a billionaire. Why would they be worried about their kids? And the simple fact of the matter was it was because they were concerned that they were not receiving any sort of financial education that would enable them to make their own way in life without losing all of their wealth. And a friend of mine and I were reflecting on this one night and, you know, it just hit us. Like if this is a concern for wealthy families, how much more of a concern must it be for working-class families, for the vast middle class of America? And if these wealthy families are feeling that their children are under-educated in this area, how much worse must it be elsewhere?

And so, I quit my job and my friend would up quitting his job, and we co-founded Banzai in 2007. And the rest is sort of history. We had no idea the great financial crisis was just around the corner, that was a scary time to be doing a startup, but it also meant that financial literacy was suddenly super relevant. And we’re based here in our home state of Utah, we moved here from the East Coast to get the company started. And we got our product, kind of, our first pass at a product launched on October 31st, on Halloween day, 2007. And by the following spring, we were in about 40% of Utah high schools. And we’ve just spread and grown from there working, you know, originally with schools and now directly with adults through partners like First United Bank & Trust. And since then, we’ve grown to be in about 50% of all U.S. high schools across the United States and working with tens of thousands of adults in some form or fashion every month to provide them with financial literacy. We’ve come a long way in 14 years, it’s been quite a ride.

Eric: I’d say so. So, it’s a partnership on multiple levels. You work in the schools, but as well as with financial institutions to kind of make that partnership a reality in the local communities?

Morgan: Yeah. That’s exactly right. So, our product is provided completely free of charge to the adults who use it as well as to any school teacher, elementary, junior high, or high school, within the United States. And the way we’re able to do that is by working with financial industry partners like First United Bank & Trust to bring the program to those interested individuals. So, this is a curriculum that schools would normally be used to paying for or that adults would be, you know, it would be a subscription model otherwise, you know. An adult might be asked to pay a certain number of dollars a month to access the resources that we provide. But fortunately, thanks to our partners like you, we’re able to give it to them at no cost.

Eric: That’s awesome. Yeah. We’re excited to be a part of it. I mean, a lot of the culture of First United is to educate and to help advise. And so, it was a great fit to work with Banzai. And, you know, looking at some of the statistics, and I’d love for you to share some of the shocking statistics that really resonate as to why it’s so important for there to be a company like yours out there that is helping to push financial education and to work with partners like First United to push that out there. Just some of these statistics are scary really when you look at them.

Morgan: Yeah, they are. They absolutely are. I mean, one of the ones I like to site that’s interesting to me, you know, currently, over 1 in 10 people, so that’s about 13% in the survey, admitted they’re not very or not at all confident in their own knowledge of personal finance. And you say, okay, well, that means 87% of people are confident in their knowledge of personal finance, and I think it’s a combination of, you know, some people don’t know what they don’t know. But another thing is, you know, is looking at that trend. So, you go back to 2017, just 4 years ago, and it was only 8% of people indicating that they were not confident, that they did not have a grasp on personal finance knowledge. And to see that number increase by more than 50% in just 4 years. Those numbers…and this was a survey of adults, those numbers aren’t moving in the right direction. And we’re not asking…the survey wasn’t asking people whether their personal finances were in good shape, it was asking if they even have the knowledge that they feel like is necessary to manage their affairs. And, it’s one thing to put your knowledge to work, but if you don’t have that baseline, to begin with, you’re potentially in a lot of trouble especially in an environment like this where we’re recovering from a pandemic. So many people are out of jobs and so many people who are employed feel like their employment is tenuous.

Eric: Exactly. Well, and on top of that…so that’s adults, and then, when you look down at some of the other numbers that you shared with me like the less than 17% of high schoolers are required to take at least one semester of personal finance, and these are soon-to-be adults getting ready to walk out and sign up for a $100,000 student loan or more…

Morgan: That’s exactly right. Yeah. I mean, you think about it.

Eric: It’s a recipe for something that’s not going to go so well.

Morgan: It’s a recipe for disaster. I mean, we’re reasonably good, not perfect, but we’re reasonably good in America at protecting our kids from predatory financial marketing. There are laws surrounding it and regulations as well as…there’s still a little bit of a culture among large financial institutions of, hey, like kind of leave the kids alone. But once they graduate from high school, it is as if they’re going from 0 to 100 in about 3 seconds. And I know some institutes of financial…of higher education rather have cut down on this, but the classic is during the orientation week for first-year students at American colleges and universities, the sidewalks on campus are lined with credit card companies looking to sign up these 18-year-olds for a credit card. And as you implied, that’s not even getting close to discussing student loans. Student loans are a huge problem in America, but you look at the terms of that debt, of those loans, and it’s just…they’re wonderful compared to what so many of these kids are getting involved with when they get credit cards and start running up a balance there. It’s an incredibly profitable segment for organizations issuing credit cards. And so, it’s appropriate I think that we have a point in society in which we start treating young people like adults, they have to make that transition. And it’s appropriate that we protect them while they’re kids, but my heavens, if they’re not being prepared during that time of…before they are sent out into the world as adults, they’re really targets for some, frankly, predatory behaviors on the parts of folks who would love to get them into debt as quickly as they can.

Eric: Yeah. Absolutely. Well, I mean, I remember my first year in college, same thing. I mean, first day on campus here getting hit up with lots of credit card offers, and here’s a free something to sign up for this debt creator. And I remember being well into adulthood when I finally paid off my credit cards from school. It’s pretty wild to think how that…just that’s one example and you’ve got hundreds of thousands of people all kind of falling for this.

Morgan: Yup. That’s right, and think how much money is being made on the backs of their ignorance. And I will say Eric one of the reasons Banzai partners, we partner with more than 800 sponsors like First United Bank & Trust. But virtually every one of those sponsors is a smaller community-based financial institution. So, that could be a community bank or perhaps a credit union. And we found, and I know you didn’t ask this question and this is just kind of an aside, but we’re a lot more comfortable with the financial practices and the marketing practices and so on with the smaller institutions with whom we partner. It’s not the community bank that is setting up the table on the sidewalk trying to attract these 18-year-old college students, it tends to be other institutions. We don’t have to go into who they are, but, you know. So, I want to avoid painting the entire financial services industry with the same broad brush because that would be unfair. But there are…

Eric: No. You’re absolutely right.

Morgan: The fact of the matter is there are, for parents who are listening to this podcast, there are institutions out there that are salivating at the prospect of your children turning 18 and leaving home and becoming fair game for their marketing. And that’s not to say that your children can’t have good positive relationships with these organizations, but they need to be prepared so that it’s not a one-sided conversation.

Eric: Exactly. So, let’s talk a little bit about the tools and the educational programs that Banzai offers. Let’s start in the schools. So, what are some of those programs, what do they look like, and how do they educate the youth to these, the options that are out there?

Morgan: So, we’ve got three broad programs, Banzai Junior, Banzai Teen, and Banzai Plus. Banzai Junior, as you would imagine, is specifically designed for elementary school students. And so, you’ve got, you know, it’s actually…our programs for young kids are some of my favorite just because I think they’re so creative, but you’re doing things like starting a lemonade stand, learning how to count change, and other really early basic…focusing essentially on basic financial numeracy, being able to count, and count money, count change, understand you can’t spend more than you have and so on. And then, you move into Banzai Teen, which as you would expect from the language has been created for junior high and high school students. And then, Banzai Plus is for the upper level of high school. So, we actually have a couple different programs for high school students because the way financial education is structured in the United States, where it is required, it tends to be required most intensely on high school level.

So, we make those different programs available and there are different courses available within those programs, especially our high school program, that teachers can choose from and they sort of drive it as they see fit. It’s designed to be flexible. A teacher can spend an entire semester delving into the resources we provide, or it can be a couple of class periods. And there’s less than 17% of high schoolers, I don’t remember, I think you may have mentioned this a minute ago, but, are required to take at least one semester of personal finance. But as you look across the 50 United States and then the territories, every one of them has different requirements. Here in Utah, we’re really blessed in that students do have to take a one-semester financial literacy course before they graduate. But you go to some other states and the financial education requirements, they usually exist, that’s saying one good thing, but they’re tucked away into different other classes. So, you might see them appear in social studies or family and consumer sciences or career and technical education depending on what state you’re going to. And the different teachers may have different amounts of time to devote to it, and you’ll encounter some jurisdictions where financial education isn’t required at all and the teacher is just offering it out of the goodness of their own heart. And so being a national curriculum provider, we have to be able to account for all of those varying circumstances.

Eric: Right. And the thing that I like about it is, I mean, even in situations like where you’re describing where there’s a very small percentage that are actually required to take a personal finance class, these tools, even if your school or your child’s school isn’t partnered with someone that offers Banzai, you can get access to it for example through the First United website, through mybank.com, you can get right to the Banzai educational courses and walk through them, all of them that you mentioned.

Morgan: Yes. You absolutely can, and I want to emphasize what you’re saying. So, I don’t know when folks are listening to this, but we’re recording this on May 10th, 2021. And you’re going to, we’re at what we hope, what appears to be the tail end of a pandemic during which millions of American students have been sent home and have been learning remotely, and suddenly, parents are much more involved, oftentimes, in their child’s education than they were just a year and a half ago. So, you don’t have to be a school or a teacher to access the courses that I’ve been talking about that we’ve created for young people. You can go to, as you said, First United Bank & Trust website, mybank.com/education, and access them all there as a parent. And we have lots of parents who do that. And if you need specific technical support with our website, there’s support resources there. If you’re interested in additional financial education and having additional general questions, of course, you can speak to an advisor at the bank. But I think between your organization and our organization, we’re standing by to help any parent who wants to delve into this.

Eric: Exactly. Yeah. I love the tools that you all provide and that we’re able to put them out there. One, in particular, you talked about the lemonade stand. I actually have a very fond memory from grade school myself where we had, it was kind of like a video game where you created your own lemonade stand, then you set your prices, and then you had sales, and you had to deal with when it rained and things like that, and it was one of my favorite things to do to learn how to set up a business and to price things. And I love that that’s part of this curriculum.

Morgan: Yeah. Thank you. It’s something we work hard at. It’s, you know, we learn very early on, Eric, that you have to really…it’s not easy to build something that can address as many different audiences as we’re called upon to address. So, think about it. We got started in the State of Utah. Our first school users were here, so you’ve got a mix of, sort of, suburban living here in Utah and then a fairly decent population of folks that are deeply rural, you know. So, that’s our initial population. But then, as we started working with our financial industry sponsors, one of our very first sponsors was very interested in taking our program into underprivileged disadvantaged communities in urban Los Angeles, so in a completely different setting than the kids that had been using the program here in Utah had been using it.

And so, when we create curriculum, we have to figure out, like, what is it, what can we share, because we cannot create a different set of programs for all 50 states. It doesn’t seem like the right thought for us to create one set of curriculum for kids who live in cities and another set of curriculum for kids who live in the country and so on. But you mentioned the lemonade stand and our research and our engagement with teachers and educators around the country helped us to recognize that that’s a touchstone that folks can understand and recognize. I mean, face it, most kids in America in 2021 are not setting up lemonade stands, but it appears that they all know what one is, they could imagine themselves creating one. Even if they’re living in a high-rise condo in Manhattan, given the right set of circumstances, they could see themselves doing that. That’s why we chose things like that. And it’s one of the challenges but also one of the most rewarding things about what we do.

Eric: Exactly. I love it. And there’s tons more resources, articles, videos, calculators, budgeting tools, all kinds of really great, helpful information, and I’m so pleased to be a part of it and to share this with our communities. So, Morgan Vandagriff, CEO of Banzai, thank you so much for joining me today and talking about this stuff. And if people have questions, want to learn more, what’s the best way they can get the support they need?

Morgan: Yeah. Eric, as I said, I think going through your bank’s website is a great place to start. It’s a jumping-off point from which they can access anything else, mybank.com/education is where I’d send them.

Eric: Excellent. Well, that brings us to the end of our show. You can always find more episodes by visiting mybank.com/podcast or find us on your favorite podcast app. You can also leave feedback, ask questions, or request a topic for us to discuss by sending an email at podcast@mybank.com. Thanks again for listening. We’ll be back next week with more helpful content. But until then, we wish you the best in focusing on what matters most to you.

Man 1: Wait. Dinner’s on me tonight.

Man 2: Nah. We can split the bill if you want.

Man 1: No. I got this. I bank with First United.

Man 2: What does where you bank have to do with who pays for dinner?

Man 1: My YouFirst platinum checking comes with the YouFirst app powered by BaZing, so I get discounts from all my favorite restaurants and stores. So, tonight’s on me.

Man 2: I’m not going to turn down that offer. I didn’t know banks did that.

Man 1: My bank does.

Man 3: Member of FDIC.

Announcer: Recording is for informational purposes only. Any references in this recording to any person, organization, product or service does not constitute or imply the endorsement, recommendation, or affiliation with First United Bank & Trust. First United is not responsible for your use of the information mentioned within this podcast. Please consult legal or tax professionals for counsel as needed.

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