Those participating in voluntary financial literacy programs do not represent the diverse demographics of the American population. Voya and our nonprofit partner, Council for Economic Education, offer tips to address this issue.
Dilemma: How can we be more inclusive when teaching financial literacy?
Where did you learn about money?
Odds are it wasn’t where you learned math or reading or writing. If you come from a family of means, you might have absorbed some of the basics of personal finance from your parents. Maybe you picked up the basics at work or while trying to juggle college life and loans. Maybe you learned by trial and error. But the odds are you weren’t taught the ins and outs of personal finance at school.
In 1998, only one state required high school students to take courses in personal finance. Two decades later, only a third of states do. That we let our children slide into teens and then into adulthood without learning to manage their financial lives is not just shortsighted, it’s unfair. Making personal finance education universal not only levels the playing field, it raises every player on the field to a higher level of financial competency.
Millions in our country find it a daily struggle to make ends meet, with women, millennials and people of color especially at risk.
As the FINRA Investor Education Foundation noted, white and Asian males score substantially higher on financial literacy tests than African Americans, Latinx and other races. Females across all race groups also scored less than their male counterparts.1 Economic status plays a role, too; ironically, lower income adults who stand to benefit most from these skills tend to have less access to this education.
How can we be more inclusive of diverse communities when educating youth about financial literacy? A perspective from the Council for Economic Education (CEE)
It's a matter of access and opportunity. There are many for whom the opportunity to learn, leverage and live their dreams is unavailable because they are overlooked or lack access to that opportunity. Access may not be available because of where they live, a lack of role models from whom they feel comfortable learning, or fear that the people in the game already know the language and vocabulary.
Here are five ways to make personal finance education more inclusive:
- Be Deliberate
Be deliberate about targeting your outreach to neighborhoods where you can really make a difference. Whether you're a nonprofit or corporate enterprise, give extra focus – in funding or volunteer hours – to "opportunity zones": regions with high percentages of schools and students from lower socioeconomic groups and/or with high percentages of students of color.
For example, the Mississippi Council on Economic Education and its College Knowledge Project provided extra personal finance education in areas with very high levels of poverty. The added effort allowed students there to expand their knowledge in this crucial area and become competitive in the statewide National Personal Finance Challenge.
- Partner for Sustainability
By bringing tools to and partnering with agencies and organizations who already serve at-risk populations, programs can extend their reach and can become sustainable over time. Sharing information with other groups can help them incorporate your topics and curriculum into their ongoing work. Personal finance education can become part of the work partner groups are doing with children in foster care, or homeless teens, or in programs that serve people with disabilities, to name a few examples.
- Connect with Families
Parents and caregivers can play an important role in helping students continue the learning at home. For its Family Financial Fun Nights, CEE assembles students, teachers, and parents at their schools in communities with highly diverse populations. They work together on fun math activities that teach personal finance fundamentals like savings, budgeting and banking. By connecting directly with parents we open up family conversations about this important topic and extend learning to the entire family.
- Be Culturally Competent
Incorporate cultural perspectives on financial decision making from partners, parents, teachers and community leaders. This can be as simple as providing materials and conversations in Spanish when working with children in a Hispanic community. This makes it easier for some parents to work - and learn - with their children.
In the words of one parent participant, "Es muy importante, porque tomando conceincia de como aprender ahorrar para el mañana." (This is very important, because we are making a conscious effort to learn how to save for tomorrow.)
- Be Humble
Those who've not had the benefit of prior experience or exposure to the language, vocabulary and concepts of personal finance can provide valuable ideas, insights and cultural touchstones to allow us to customize our outreach to meet our audience's realities, needs and life experiences.
Turning a dilemma into an opportunity
As we work to make finance education ubiquitous, we're cheered on by an observation by Raj Chetty, director of Opportunity Insights and professor of economics at Harvard University: "There are pockets of America, where children from low-income families have significant chances of rising up in the income distribution," Chetty told PBS NewsHour. "There are places where we see the American Dream thriving; we simply need to understand how can we replicate those successes elsewhere throughout the country." See the full interview.
1 2018 National Financial Study
In our 2018/2019 Impact Report, we detail the following four key dilemmas the financial industry faces and the ways in which we are addressing them. Visit our report microsite to view our leadership video, download the full report (includes the GRI) and the Executive Summary.
Dilemma: ESG Investing
Dilemma: Financial Wellness
Dilemma: Diversity & Inclusion
To review the two key dilemmas we face in the financial services industry and the ways in which we are addressing them. Please view our 2017/18 Corporate Responsibility Annual Report.
Dilemma: How can we overcome the diversity and inclusion challenge?
Dilemma: How do we address the dip in the personal savings rate in America?