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“I believe the children are our future / Teach them well and let them lead the way”
Sage advice from Whitney Houston’s song "The Greatest Love of All".
Because children are our future, that means that we should make sure that they are ready to step into it, fortified with the best resource possible — financial literacy knowledge.
A 2018 Forbes article noted that America has a financial literacy problem. In their story, they cite a serious statistic that two-thirds of Americans can’t pass a basic test of financial literacy.
The FINRA Investor Education Foundation published a news release sharing significant findings from the National Financial Capacity Study (NFCS), “The study measures four key components of financial capability: making ends meet, planning ahead, managing financial products, and financial knowledge and decision making. Drawing on a data set comprising responses from more than 27,000 U.S. adults, the NFCS is one of the largest and most comprehensive financial capability studies in the country” What they found was that 39% of African Americans and 34% of Hispanics were more likely to use “high-cost forms of borrowing like pawn shops and payday loan center compared to 21% of whites.
This is why it is important that the work of organizations like the Consumer Financial Protection Bureau, a government agency that makes sure banks, lenders and other financial companies treat you fairly, are necessary and need more funding and support.
So what needs to be done and is there an example?
Revealing statistics like that mean that we have work to do to make sure that history does not repeat itself with our youth. That means an all hands-on-deck strategy jointly led by the community and corporate social responsibility initiatives of corporations.
This is another space where Black financial institutions can have a meaningful impact. An example of how is the 9th Annual “I Got Bank” Youth Financial Literacy Contest where students across the country between the ages of 8 and 12 will have a chance to win a $1,000 savings account. The ten winners will be students who read a financial literacy book of their choosing and either write a 250-word essay or create an art project to show how they will apply what they have learned from the book into their daily lives.
It is necessary that we make financial literacy courses a part of the K-12 curriculum and mandatory courses for college students. The US Financial Literacy commission just releases the Best Practices for Financial Literacy and Education at Institutions of Higher Learning. In it, they recommended that financial literacy course be mandatory, this is promising news for the financial literacy movement. This news comes as both North Carolina and Rhode Island could become the 20th and 21st state to require high school students to take financial classes according to MarketWatch.
If you didn’t’ have enough reasons to consider banking Black, the investment into financial literacy by these institutions is another.
