Skills like budgeting and money management give you the knowledge and discipline to make informed and effective decisions which can change the trajectory of your life. (Courtesy of unsplash)

By Marnita Coleman
Special to the AFRO

The spotlight on personal financial education is glaringly bright as we tread through National Financial Literacy Month. Across the country, many reputable financial organizations and advocates are championing the cause of helping our nation’s most vulnerable families with financial literacy. Some families were struggling to stay afloat prior to the pandemic and now many still struggle with living paycheck to paycheck with virtually no savings. Credit card debt is mounting and Experian reports that student loan debt is in crisis proportions, shattering the ceiling at $1.57 trillion.

The alarm has sounded in the financial community, and frontliners have responded with virtual events, talks and boundless resources designed to better equip vulnerable populations with financial intelligence. To heighten awareness of the gravity of this matter, the Biden Administration set forth a Proclamation announcing April as National Financial Capability Month citing the “disproportionate impact the pandemic is having on minority and low-income communities.” 

The lack of basic financial literacy skills such as budgeting, saving, banking and managing student loan debt has weighed heavily on families during these unprecedented times. And, without a significant amount of money saved up, underserved communities have suffered due to layoffs, job loss and COVID-19-related illness and death in the household. Unemployment insurance has sustained some families, but there has been lapses in the processing of claims leaving households without any income for weeks. This combination creates a cocktail of debilitating stress. 

The concept of Financial Literacy Month is the outgrowth of a youth program to educate students on finances, initiated in 1972, by the Denver-based nonprofit College for Financial Planning, the nation’s first financial planning educational institution. The need to educate younger students with financial literacy became apparent, so they initiated a high school financial planning program that validated the need for financial literacy among children and youth. As a result, the National Endowment for Financial Education (NEFE) was formed and they led the charge to establish April as Financial Literacy Month.

Since that time, the federal government, along with state and local institutions, have observed the month by teaching basic budgeting skills, offering counseling to student borrowers and showing families how to save to create their own financial relief fund. On the local front, Aaron Velky, CEO and co-founder of the Baltimore-based Ortus Academy, developed a parent handbook entitled “6 Lessons to Teach Your Kids About Money, Now!” Ortus students learn that being good with money is all about healthy habits. The book addresses key points such as “learn to earn,” “spend on what matters” and “keep your big expenses down.”

Since 1998, the Council for Economic Education has provided a report on America’s personal finances education in schools on a state by state basis. The survey details how many states provide financial literacy from K-12, through various categories. In Maryland, each school district has the final authority as to what is actually implemented. As of 2011, the Baltimore City School District integrated personal financial literacy education into required courses for high school students, however, it is also taught in elementary and middle school.  

According to Jump$tart Coalition for Personal Financial Literacy, in low income neighborhoods children start kindergarten 60% behind their peers from more affluent communities. Results from a recent comparison study found that Jump$tart children make 1.5 times greater gains in important literacy skills, as compared to those who do not receive the Jump$tart program.

In 2018, then-Senator Barbara Robinson (D) who served District 40 in Baltimore City, sponsored SB236, State Board of Education, Financial Literacy and Entrepreneurship Curriculum, a semester-long high school elective course in financial literacy and entrepreneurship. Unfortunately, Senate Bill 236 fell flat.

Financial Literacy Month was created by the Denver-based nonprofit College for Financial Planning in 1972. Recently, the Biden administration declared the month of April as National Financial Capability Month to specifically help minority and low-income communities. (Courtesy of unsplash)

It is imperative to be financially literate. Skills like budgeting and money management give you the knowledge and discipline to make informed and effective decisions which can change the trajectory of  your life. If we are going to close the wealth gap, then this information has to be taught and practiced in the homes of marginalized communities of color. 

So where do we go from here? We pivot to the internet for the maximum allotment of financial academies that offer free online virtual learning from prominent financial planners and institutions. Then, we share the information with our family and friends to build a stronger community. 

Visit the CASH Campaign of Maryland, the state’s only free online resource for financial education classes promoting economic advancement for low-to-moderate income individuals and families in Baltimore and across Maryland.