We Need Financial Education in Schools Today
As part of our Women’s History Month series, Cinneah (the founder of Flynanced) and I co-hosted a series of incredible roundtable discussions with some of our favorite women in the personal finance space with the goal of fostering rich intersectional conversations around money.
Yanely Espinal, Creator of MissBeHelpful and Director of Educational Outreach at Next Gen Personal Finance (NGPF.org) shared with us that she never had a class about making smart money choices. Now, she's on a mission to help young people learn about personal finance in a fun and engaging way!
Yanely talked about the importance of comprehensive financial literacy as a way to address the racial wealth gap. Here’s a summary of what she shared below. (You can watch the full recording of the roundtable discussion, Closing the Gaps, here).
Personal Finance Education Isn’t the Only Problem
The best way to start creating Black wealth is to stop depriving Black students in public schools from information about how to build wealth. Every single Black family in America isn’t going to have direct access to the social capital many of their white counterparts benefit from. Social capital means their network and having relationships with people who can guide them to make the right money moves. We have to make sure the next generation graduating high school DOES get to learn about personal finance so that they can take it back home and teach their family and community, creating a powerful ripple effect.
Of course it's all inclusive! We’re not just talking about Black students. But, we have to remember that Black Americans historically have not had equal access to building wealth. It's about time we play catch up and financial education is a core piece of that.
At the same time, we need to be real: putting money in the hands of Black people is the number one way to close the wealth gap. That means creating systems that assist Black Americans with wealth generation. There are many politicians working on plans for how to do that in 2021. When a Black family brings a new baby into the world, that baby should have a savings account and deserves to have a 529 plan, too. These are creative ideas that can help us begin to tackle the wealth gap.
Financial Literacy for Women
Financial literacy tests have long been used to demonstrate how “financially literate” people are based on some multiple choice questions about personal finance. The saddest thing that I learned from one GFLEC report was that women answered 61% of questions about borrowing money correctly yet they could only answer 34% of questions correctly about understanding the risks associated with making money choices. (Source: GFLEC Report, Figure 8) That’s a dangerous combination!
As women, we know how to borrow money to get the things that we need or want, but we don't understand the risk associated with borrowing at really high interest rates - specifically on credit cards, which is how they got me. The reality is, this is not being taught!
Personal Finance Education in Our Public Schools
As of the summer 2021 only 7 states require every single high school to teach a personal finance class for a full semester before graduation. If you don't take ELA (English Language Arts), if you don't take science, if you don't take math, you can't graduate prepared for your next steps and you have to take the classes you missed over the summer. The same should be true for personal finance!
What upsets me the most is that we tell kids that they have to go to college, get a really good job, and then make good money. But, we don’t tell them what to do with that money when they finally get it.
We all need money so that we can create a living environment that's healthy and safe for ourselves and our families. Security is super important. Money is not everything, but if we're telling kids that money is how you're going to create security for your family, then we have to be teaching them what to do with that first paycheck when they finally get it.
It frustrates me that it's not included in ALL schools - especially because it's affecting women disproportionately. And to make matters worse, students in low-income communities and communities of color are the least likely to have access to a personal finance class in 2021.
Next Steps
Watch the full recording of the roundtable discussion, Closing the Gaps, here.
Follow Yanely on Instagram @missbehelpful, subscribe to MissBeHelpful on Youtube and join her community or book a one-on-one coaching session at missbehelpful.com.
About Yanely:
Yanely was born and raised in Brooklyn, NY and is one of the first in her family to graduate college. After two decades of school, she still can't believe she never had a class about making smart money decisions! Now, she's on a mission to help young people learn about personal finance in a fun and engaging way! After completing Teach For America, Yanely paired her love for teaching with her passion for personal finance, creating a unique YouTube channel for young people to engage with topics like budgeting, managing credit, saving and investing for retirement and more! Yanely serves as the Director of Educational Outreach at Next Gen Personal Finance and is the youngest woman on CNBC's Financial Wellness Advisory Council.