In the 2025 Michigan 4-H Cash Composition Contest, young participants demonstrated a profound understanding of credit management and its implications for their financial futures. By addressing the complexities of borrowing money and utilizing credit responsibly, these youths provided valuable insights into making wise financial decisions. The contest highlighted that while credit can serve as a tool for future planning or emergency situations, improper handling may lead to significant short-term and long-term consequences.
Data indicates that one in six young adults aged 18-24 had debt in collections in 2023, with 6% falling behind on credit card payments. To combat such challenges, Michigan State University Extension and Michigan 4-H collaborated with Extra Credit Union to educate youth through webinars, self-guided courses, and articles. Participants from 27 counties submitted essays offering practical tips like assessing needs before borrowing, understanding loan terms, prioritizing low-interest options, and maintaining good credit scores.
Empowering Youth Through Financial Education
The 2025 Michigan 4-H Cash Composition Contest was designed to foster financial literacy among young people by encouraging them to explore the concept of credit. This initiative aimed to equip participants with the knowledge necessary to make informed decisions regarding borrowing and credit usage, ultimately promoting financial stability. The competition featured two age groups: 9-13 years old and 14-19 years old, attracting 60 entries from across Michigan’s counties.
Participants engaged in various learning activities prior to writing their essays. They attended informative webinars, completed online courses, and read relevant articles to deepen their understanding of credit. Their essays revealed an impressive grasp of critical financial principles. For instance, they emphasized the importance of determining whether credit is truly necessary before committing to it. Additionally, they advocated for thorough research into personal financial capabilities and loan terms to avoid unexpected fees or penalties. Recognizing the value of low-interest rates, the youths advised against high-interest loans due to the stress they could cause.
Practical Tips for Responsible Credit Management
Beyond theoretical knowledge, the contest encouraged participants to share actionable advice for managing credit effectively. Among the key takeaways were strategies for creating repayment plans and consistently monitoring credit reports to maintain a strong score. The young authors also underscored the significance of seeking professional guidance when needed and continuously educating oneself about fiscal responsibility. These insights reflect a comprehensive approach to credit management that considers both present and future implications.
The winning essays highlighted several crucial aspects of responsible credit use. First, having a clear plan for repaying borrowed funds was identified as essential to avoiding debt-related issues. Timely bill payments not only preserve a favorable credit rating but also prevent unnecessary charges. Furthermore, regularly checking credit reports throughout life was recommended as a means of demonstrating financial reliability to lenders. In cases where additional support might be required, consulting trusted professionals or advisors was suggested as a prudent measure. Lastly, the participants stressed the ongoing need for education about credit practices, asserting that credit itself isn’t inherently problematic—it’s the manner in which it’s utilized that determines its impact. Thanks to Extra Credit Union's sponsorship, each of the six winners received a $100 e-gift card, celebrating their achievements and contributions to fostering financial awareness among their peers.