Financial Literacy: The Focus of Economic Discussions
Janet Yellen, the Secretary of the U.S. Department of the Treasury, hosted a discussion last week with key players in financial literacy and economic equity to examine the focus of the Financial Literacy and Education Commission (FLEC) in today’s economy. The group addressed longstanding economic inequalities in the United States, the impact these inequalities have had on people and communities of color and access to financial education as a significant underlying cause.
In her remarks, Secretary Yellen stressed that economic crises hit communities of color harder and longer, pointing to comparative unemployment and income statistics and, more specifically and most recently, to the disproportionate impact of the COVID-19 pandemic. Her focus for the FLEC will be on expanding the reach of early financial education, which is foundational to the financial success of an individual throughout their lives. She noted that financial inclusion is not possible without financial education, and there is no one-size-fits-all solution to the delivery of financial education.
Another focus area for the FLEC will be on research-based techniques including one-on-one financial coaching and leadership through empathy. She also emphasized the need for personalized instruction that is aligned with the goals and unique circumstances of each individual.
Organizations Offering Help
Organizations that participated in the discussion included Operation Hope, the National Urban League, NeighborWorks America, Ariel Investments and Neighborhood Trust Financial Partners. Here are some insights into how they are helping:
- Operation Hope is a nonprofit organization whose mission is to disrupt poverty and empower financial inclusion for low- and moderate-income youth and adults. They have recently begun a national initiative called “Financial Literacy for All,” partnering with leaders from large organizations including the Khan Academy, a prominent force in the delivery of free education, to provide financial education to American students and adults.
- The National Urban League is an organization dedicated to carrying out the vision of a world without equity gaps by way of programs and initiatives in education, jobs, housing, health, and justice. It promotes the importance of understanding the social and economic impacts of financial decisions, drawing the distinction between financial literacy and managing financial dilemmas, and the expansion of access to financial education to students across the country.
- NeighborWorks America is a congressionally chartered and funded nonprofit that maintains a network of organizations that seeks to create opportunities for affordable housing, the strengthening of communities and improving overall quality of lives. They place tremendous focus on researching and developing strategies and resources to encourage financial health and capability.
- Ariel Investments is a registered brokerage firm with approximately $16 billion in assets under management that maintains a commitment to diversity, equity and inclusion throughout their organization and in their investment strategy. The company also founded an education initiative which focuses on advancing educational opportunities and related programming for underserved communities.
- Neighborhood Trust Financial Partners seeks to combat financial insecurity by connecting workers to financial coaches. They are a nonprofit organization focused on low-income individuals and providing the tools necessary for financial empowerment either through their employer or direct to consumer through partnering credit unions.
As Secretary Yellen points out, “research does show that education — especially early education — about how to navigate personal finances can have a lasting, positive impact on people’s lives. It can be part of our strategy for building a more equitable economy.”
Learn more about the New Jersey Society of Certified Public Accountants’ financial literacy initiatives at njcpa.org/resources/resources-by-audience/consumers.