This fact sheet spotlights the damaging financial education and counseling gap pervading disadvantaged communities across America. It shares ways that the Annie E. Casey Foundation is working to fill this void and inspire public, private and nonprofit players to think differently (and more expansively) about bringing vital financial skills and services to low-income families. It is part of a 10-segment series, called Building Family Economic Success, that showcases how the Foundation is helping to economically empower families across America.
Filling the financial education gap requires new solutions to pervasive problems
Findings & Stats
Expert Advice Needed
Basic fiscal know-how can only take a family so far. Many low-income households lack access to personalized advice and planning services that can help them tackle complex financial choices while avoiding long-term negative consequences.
The Ripple Effect
While savings levels for all Americans are low, working poor families often have no—or negative—savings and assets. Another sobering fact: Very low-income families saw their credit card debt jump 184% between 1989 and 2001. These issues are not happening in a vacuum, say experts. Poor financial decisions extend beyond the family unit and can impact the wider community.
A Multipronged Approach
On the financial education front, the Foundation is working to pinpoint best practices and encourage public- and private-sector players to invest in the cause. At the same time, Casey believes that enhanced financial education isn’t a universal fix. Families must also have access to high-quality financial services and—with the help of regulatory restrictions—far fewer run-ins with predatory lenders.
Don’t Reinvent the Wheel
Most communities already offer a variety of financial education workshops and services. The catch? These resources may be uncoordinated or difficult to access. Look to a state office or agency to help make sense of financial education and service options, say experts.
A Triple Threat
Many schools do not teach children about finances. Many workplaces do not offer financial education courses. And many low-income residents do not have access to financial counseling. Without these skill-building opportunities, many families struggle to make informed choices that can help pave the way for long-term economic success.
Statements & Quotations
Every day, rural and urban low-income families face critical choices that can either move them toward a better financial future or trap them in debt and ruin their credit.
By empowering low-income families to make more informed choices, basic financial education can help families increase their financial stability and build their wealth.