You may have heard the statistics: Most Americans can’t pass a basic financial literacy quiz, aren’t saving enough for retirement, and consider money to be a top source of stress.
For people living paycheck to paycheck or struggling to get by, the stakes are especially high. A recent study from Pew Charitable Trusts shows that low-income families have the equivalent of less than two weeks’ worth of income in checking and savings accounts and cash at home. Many young adults are in the same boat. We’ve found in our own research that nearly four in ten have no savings at all. And, with one in three saddled with student loan debt, that’s a scary statistic given that another crop of young adults are getting ready to graduate from college with debt looming in their future before they even begin their formal work journey.
Here in Detroit, efforts are taking place to address this challenge. At Bank of America, we are motivated to create shared success for both clients and non-clients in the areas we do business – not as an add-on philanthropic effort but as a critical business strategy that is core to how we operate. For instance, we have financial-wellness specialists who provide financial workshops for our consumer customers and business clients’ employees to help them personally approach financial stability and long-term well-being. This work has led to improved business operations, employee satisfaction and increased financial knowledge in the market.
Through Better Money Habits®, our financial education initiative, we are supporting communities by enabling free access to personal and financial health and growth tools. Bank of America’s Better Money Habits Champions partner with local nonprofits and schools to provide free training that creates a dialogue about complex money topics like budgeting, setting financial goals, managing credit, home or car buying and teaching children about money. Additionally, we will meet individually with the participants in these workshops to provide financial guidance based on the recipients’ needs.
As part of our financial education efforts, we as a community need to ensure that our schools grow efforts to prioritize financial education delivery —both by advocating for required courses and properly equipping our teachers with the knowledge and resources they need to succeed. But we know that schools can’t go it alone, and that’s where both public and private partnerships can work. As community leaders, we need to make sure that local organizations have the resources they need to operate—sometimes that is through financial support, but many times it is ensuring that non-profits and community partners are aware and taking advantage of the tools and resources local corporations already have, including volunteers.
The financial education challenge our community faces is grave. We need to improve financial literacy and well-being in our community. We should listen closely to those who need our support the most, identify the right resources and best channels to reach them, and make sure they are fully empowered to take control of their financial futures.