Financial Literacy for Adult, But Not a Gross Version

February 28, 2022 10:41 AM

I work at an organization that connects marginalized and economically excluded individuals to reasonably good jobs. We have a real need to incorporate some financial education into classroom training and ongoing individual coaching, but I have a deep skepticism of actors in this space and the kinds of training that may be available, and all my snowflakes are below the fold.

Folks we work with are on the receiving end of generations of systemic and deliberate marginalization from redlining through the War on Drugs, and they come to us on the other side of: incarceration, homelessness, cash welfare (TANF), a "workforce development" system that connects them to fast food jobs, you get the idea. Many, if not most, are not connected to a mainstream financial institution, and everyone needs to be able to start doing some planning, learning, and conversing around how to use their new union benefits and their modest salary.

This obviously brings up financial literacy instruction. I'd like to incorporate this into our program in a way that is honest about circumstances and is grounded in some kind of social justice or liberationist perspective. By which I mean:

1) I'm very skeptical of trainings provided by banks and their foundations. (However, I'm open to being wrong on this.)

2) Perspectives and approaches that are grounded in a heavy motivational speaking type of approach always come off as dishonest with our participants.

3) I don't want to create anything that gives people dishonest expectations about their outcomes, or that blames them for their financial situation.

4) I am not interested in anything coming from Teach for America or some other entity that is trying to marketize every last public good in this country and put a social justice sheen over it, or whose primary goal is related to childhood education (it's just askew of what we do).

Basically, here's how to stop being taken advantage of by check cashers, here's how to think about budgeting and your values related to it, but nothing that's like, "Banks are great and you're gonna be so well off if you just exercise some self-control." Does any approach like this exist, whether it's programs, organizations, curricula, a book I can read, anything?

Much appreciated.

posted by kensington314 to Work & Money (19 answers total)

I think Paco de Leon and their new book might fit this bill.
posted by socky_puppy at 10:59 AM on February 28, 2022 [1 favorite]

You could check an(local to me) organization called Up From Slavery Initiative for ideas, or contact them, I’m sure they’d be willing to help.
posted by dbmcd at 11:07 AM on February 28, 2022

Tiffany Aliche, aka The Budgetnista might be a good resource? I haven't read much of her stuff in part because it's aimed at folks in a more precarious financial situation than myself. She does aim her stuff at women - I'm sure lots of it is relevant to people of any gender, but men are not really her target audience.

But to give you an idea of the audience she's speaking to, the testimonials on her site (mostly from Black women) are things like "I was able to save the $5,000 for a down payment to my very 1st home at age 48." and "Thanks to The Budgetnista I went from a 340 [credit score] to a 625 in 8 months!"

There is a bit of a "hustle"/motivational kind of tone to her stuff, and also a little bit of a religious bent (I think?). But I'm pretty sure she doesn't veer too far into "anything is possible!" territory, though - I've seen her tweet things along the lines of, "Not everyone can achieve financial independence, but that doesn't mean that you can't improve your financial situation."
posted by mskyle at 11:53 AM on February 28, 2022 [1 favorite]

You could contact the Global Financial Literacy Excellence Center and ask exactly this question. Yes, they are supported by the types of organizations you are skeptical of, but from what I've see of their work, they are really trying to find out what actually works. Just be upfront about who you are serving and what your concerns and goals are.
posted by Mr.Know-it-some at 12:08 PM on February 28, 2022

The CFPB resources are not comprehensive, but should be relatively BS-free.
posted by praemunire at 12:13 PM on February 28, 2022

Has your organization solicited feedback from those you want to reach about what they want to learn and who might be a trusted messenger? Do you know if they are skeptical about mainstream or popular financial literacy ideology or is that primarily the viewpoint of you and your organization? I just ask because it might help you narrow down what could be most beneficial to your audience if you know what they value and want. (You may already know this, I am just not clear from your question how you determined what this group wants/needs.)

For example, do you know if they want to be connected to mainstream financial institutions? One of of the most popular outreach programs of my Black church in a low income area is a training series put on by a local credit union. I know that it helps people (in and outside of the church) who are unbanked get connected. Every year we hear about how many people turned out for their big seminar and it is oversubscribed. There are several members of our church who are also corporate/professional financial advisors etc, including my CPA friend, who provide free individual coaching to people with no savings/debt etc. They know the community and are trusted advisors.

If you have not looked into it, it might be wortwhile to find our more from participants about what they specifically want and need, and who they might trust to deliver. I dont know of your organization, but perhaps you want to partner with a trusted community organization to figure out a good strategy.
posted by fies at 12:20 PM on February 28, 2022 [3 favorites]

Check out Michelle Singletary.
posted by XtineHutch at 12:42 PM on February 28, 2022

Best answer: Financial Literacy is a subject I'm interested in and have some experience with. Well, maybe not the niched-down version of FinLit you're looking for, but FinLit in general. I live and work on the edge of the FinLit world. Here are some general thoughts.

I know you said you don't want motivational speaker type stuff, and I get that. However, I'd caution that studies repeatedly demonstrate that most Financial Literacy education fails. And I believe strongly (as in it's one of my most strongly-held beliefs) that the reason FinLit education fails is that it's far too focused on mechanics and details. It's all about what credit scores are and how to set up a checking account. This stuff is important, yes, but knowing these details does not lead to financial success. The data is very clear on this.

So, what does work? Well, we don't really know. While we have stats that show traditional Financial Literacy approaches don't work, we don't have stats on what is effective. But I have some opinions based on 15+ years doing this. I think the most important thing — and this is the thing most programs miss — is to lead with psychology and behavior. Start with why Financial Literacy is important. Explain how this knowledge can help participants achieve their goals — all of their goals, not just their financial goals. I review several FinLit courses a year. I've never seen one that leads with this stuff, and I think that's why it doesn't work.

So, you may not want motivational speaker material, but I think you absolutely need to seek out material that focuses on behavior and psychology. (I'd suggest my own material, but it's very much not targeted at your audience. I take the psych/behavioral approach, but I'm writing for folks who want to retire early, not those trying to master the basics.)

If I were replying to a general question about Financial Literacy instead of one that had specified social justice perspectives, I'd recommend the following...

• First, Dave Ramsey is perennially popular and for a good reason. His approach works. I know it's very popular to hate on Ramsey right now, but doing so completely misses the point that his methodology has helped many people overcome their financial predicaments. (Having said that, Ramsey is targeting those who have created their own problems. You are trying to target folks who are struggling due to systemic issues. Not the same thing.)
• Second, I'm a fan of Ramit Sethi's "I Will Teach You to Be Rich". It's packed with solid, actionable advice and Sethi very much takes a behavior-first approach. But again, his target audience isn't quite what you're after. He's largely writing to college-educated young adults who need to figure out their finances. He's not writing to disadvantaged communities.
• Finally, I just read an advance copy of Cashing Out by Julien and Kiersten Saunders (of Rich and Regular). In many ways, they do have the same target audience that you do — except that they're aiming at something beyond Financial Literacy. They want to help members of the black community achieve financial independence, which is the end goal and not the starting point. Plus, their book won't be out until mid June.

I know I just wrote a lot of words without giving you anything specifically helpful and actionable, and I apologize. The truth is that I don't know of a specific resource that meets your needs despite being exposed to this stuff every day. If I myself were looking for this, I'd check out local community banks. Community banks are very, very different than big national banks, and they're often expressly committed to serving their customers. Also, I'd check out journalists and bloggers and vloggers targeting the people you're trying to help. Even if their websites don't offer what you need, it's likely that they can direct you to resources that do give you what you want. (Both Tiffany Aliche and Michelle Singletary, mentioned above, would be good places to start.)

Finally, a request: If you do find some good resources, please please please post them to this thread. Selfishly, I'd like to know about them myself. But more importantly, Google is going to index this question and the responses. It would be nice if future searchers could land here and discover some useful tools...
posted by jdroth at 1:14 PM on February 28, 2022 [11 favorites]

Best answer: In addition to the systemic, cultural and trauma-informed perspective you're seeking for your programme, I would urge you to consider generational perspectives as well. Anyone under 40 thinks Dave Ramsey can suck a dick, and rightly so. He's a raging Republican, a Fox commentator, his financial advice reputation was built in a different era and a different economy. He just sucks at realities like student debt and child support and student loan repayments and rent that is 65% of your income after tax.)

You need a Starbucks-friendly, avocado-loving financial adviser because if you're never going to own a house at least you can enjoy a fucking latte.
posted by DarlingBri at 2:15 PM on February 28, 2022 [1 favorite]

Best answer: To add my own endorsement to jdroth's excellent answer, for all his many faults, Dave Ramsey understands that financial literacy isn't about learning some math or processes, but about understanding and regulating your own emotional reactions around money. I still don't think he is the right answer for your organization, but I think any right answer needs to address this issue along with looking at systemic marginalization and other failures of our society.
posted by seasparrow at 2:46 PM on February 28, 2022

Best answer: This stuff is important, yes, but knowing these details does not lead to financial success. The data is very clear on this.

Most financial advice is for those who just need more financial discipline but earn ok money, Dave Ramsey included.

If you can go into a bit more detail, I think people can point you in a better direction. How close the median wage are you talking (around $50k.)?

If they are on the low end of that number (below $30k) then no traditional financial advice is going to work for them. In that sense, just basic information (you have a credit score - improve it as much as you can) is the best information, because saving something like $300 to pay a rent deposit (not becoming 'rich') is the top goal. Learning to be punctual, planning for the near future, dressing for the job, avoiding a return to jail, assessing the best mode of transport are all better financial advice than how to save a few bucks. Living closer to work, etc...
posted by The_Vegetables at 2:52 PM on February 28, 2022 [1 favorite]

Response by poster: Thanks everyone for thoughtful response so far, and in response specifically to fies and The_Vegetables, thanks for a couple questions that might be helpful to narrow the frame of my goals.

In general folks are in jobs that pay $34k to $42k, and can promote into jobs in the $50ks or $60ks without additional educational attainment, over some years. All jobs have both a defined benefit (pension) and defined contribution (similar to 401k) retirement plan.

But fies and The_Vegetables questions point to a refinement that I think is helpful. We get survey feedback from participant alumni, and we also do a needs assessment before people join our program. Both things have made clear that there's some need for financial literacy or "empowerment," and my sense is that its focus should start along the lines of:

1. Why should I use a credit union or bank instead of a check cashing place?

2. Honestly, will a bank even let me through its doors and how does all that work?

3. How do I make a basic budget?

4. How do I think about things like credit, savings, etc.

So it's a mix of what I would consider financial triage and introduction to longer term financial planning.
posted by kensington314 at 3:10 PM on February 28, 2022 [1 favorite]

I used to work for an organization that did rights-based financial education (emphatically not financial literacy) that taught some basics of why to use a credit union and not a check casher, but also talked about the the systemic issues people are facing (redlining, etc) as well as the failings of the US financial system. They moved away from that work, but if you want to DM me and let me know where you're working, I may have some ideas for similar organizations in your area.
posted by snaw at 3:41 PM on February 28, 2022 [3 favorites]

I got A Cat's Guide to Money for a friend and they enjoyed it. It's target audience is young queer folks and so it's quite careful in it's tone. If I remember right, it covers a fair number of the points you outlined above. The author also has a podcast based around the same that I haven't listened to but trust would be good: Oh My Dollar.
posted by crossswords at 4:26 PM on February 28, 2022 [4 favorites]

Concepts from Elizabeth Warren's All Your Worth and Bogleheads® investment philosophy may be of interest.
posted by oceano at 6:00 PM on February 28, 2022 [1 favorite]

Best answer: After seeing your reply--If your community has a well-regarded credit union, they should absolutely be able to partner with you on something like this. And the whole "will a bank even let me through their doors?" question is a lot easier when you have someone from the credit union running the meeting and then helping people open accounts after it is over.

Check around for programming that local credit unions or other financial literacy organizations put on for high school seniors, especially in low income areas. In my experience, that is very similar content to what you are looking for and probably just needs a little bit of tweaking in the messaging to acknowledge your folks' age and experience.
posted by mjcon at 7:56 PM on February 28, 2022 [3 favorites]

Maybe John Hope Bryant?
posted by Violet Hour at 1:00 AM on March 1, 2022

Best answer: I work for a credit union that has an explicit social justice mission, and we partner with GreenPath Financial Wellness. I can vouch that they are non-sleazy and not exploitative. mjcon's suggestion of partnering with a local credit union and/or getting resource suggestions from them is also a great idea.

Other good resources:
Your Money Your Goals from the CFPB
Videos and info about credit scores from Fico
posted by aka burlap at 6:32 AM on March 1, 2022

Best answer: If you have the option, it should be structured like continuing education, ie: different goals for employee year #1, year #2, year #5 etc. My middle/upper middle class job does this.

Year 1 would include things like opt-out 401ks with 'lifepath' type investments (ie: set for each individual's retirement year) so they never have to change anything, and maybe aren't even aware they have it, in a figurative sense. Some might be available for banking and starting credit/repairing credit but many will have to spend every penny on clothing, housing, etc for work, so bank vs non-banked is irrelevant. It would also include reiterating they need to do their taxes and they should probably use a professional. You may find some discounts for this.

Year 2 would talk about things like getting a checking account via a bank, maybe a credit card, and increasing their company match.

Their total rewards compensation discussions should show how much they have in their 401k, so in year 5 or so they may have $5-10k and that's why they need to think about saving and retirement.

This may not be perfect or exactly what you want, but hopefully it gives you some places to start.
posted by The_Vegetables at 11:39 PM on March 1, 2022