Financial Literacy Courses: Good, Bad, or Somewhere in Between?

There are a number of schools of thought when it comes to financial literacy content and courses. When the content is geared toward kids and schools, or when the audience is individuals who are impoverished or financially disadvantaged, opinions can get heated. It makes sense—money is an emotionally charged topic, and financial literacy content is about money, so there are understandably a range of perspectives.

Some believe that financial literacy programs:

1. promote the idea that poverty and financial inequality are usually based on individual choices vs. widespread policies and systemic disadvantages
2. suggest that being exposed to financial literacy information means you can and should automatically improve your own financial circumstances—and if you don’t, the fault is yours
3. simply don’t work or don’t provide lasting benefits

What do we think at Stash101?

The concerns are valid. Poorly framed and presented financial literacy programs and content can be ineffective or harmful. And it would be naive to suppose that providing financial literacy content to individuals will somehow make systemic financial injustice, inequity, and disadvantages magically vanish. That can’t and won’t happen, and to suggest otherwise seems foolish at best and dangerous at worst. But—it can be deeply helpful to provide individuals of all ages with content that helps them learn about and manage money, given that money is and will likely continue to be a significant part of everyone’s life (like it or not). This content can also raise awareness that forces beyond any one person’s control often significantly affect how money is acquired (or isn’t) and how it works in our favor (or doesn’t). And this content can potentially put financial knowledge in the hands of individuals who will help to institute policies that will create more financial equity.

To be clear, financial literacy programs, platforms, courses, and apps should not replace or be a substitute for policy changes that can more quickly and effectively help to level the financial playing field. The answer to the question, “Do we even need policy changes if we’re broadly educating people about financial literacy?” is, simply, “Yes.” Policy changes should be something we all get behind, especially those of us who create and/or teach financial literacy content. 

But it’s not a case of either/or—it’s a case of both/and. Policy changes aimed at creating financial equity should be put into effect. Period. And: financial literacy programs should be put into effect. Of course, both of these come with caveats. When it comes to policy changes, opinions will understandably differ about which might effectively move the needle—but some ideas include extending the expansion of Earned Income Tax Credits and making the Child Tax Credit fully refundable; providing a universal basic income; and finding ways to provide healthcare without increasing debt. And when it comes to financial literacy programs, the most helpful will be premised on the idea that they are not, in and of themselves, a magic wand. These programs should clarify that while some financial circumstances can be improved when individuals gain financial knowledge, other financial circumstances—such as incurring healthcare costs—may be beyond an individual’s control. 

To be most effective, financial literacy programs should also approach the content from a culturally responsive perspective, along with a broad understanding that each of us comes to the financial literacy table from a different place. For starters, what feels like a lot of money to me may feel like little to you. Consider, for example, the different views about what it means to be rich expressed in these articles from 2021 and 2019 (be sure to look at the graph from YouGov in the 2019 article to see a wide range of perspectives). As these articles and common sense indicate, what feels like financial success to me may feel like failure to you; and the money-related goals I set for myself may seem so insignificant as to be trivial or worthless to you. All of it is, of course, relative. And an important point needs to be made: it’s difficult to make good choices with money if you don’t have money to make good choices with. 

For instance: what happens if you (or your loved ones) don’t have enough money to cover the cost of an emergency? You may feel backed into a financial corner and take whatever options are available to you. Maybe you try to get a traditional loan to cover the expense, but you don’t qualify because of your income or credit score. Or maybe you only need to borrow a relatively small amount vs. the higher minimum amount that’s sometimes required. Under these circumstances, and with the stress of an emergency factored in, you may opt to take out a payday loan. Because these types of loans often come with exorbitant interest rates and fees, a single emergency could quickly catapult you into financial difficulties or exacerbate difficulties you may have already had.

The truth is, many people may find it challenging to amass money when systemic financial disadvantages are still at play. A few examples of systemic disadvantages include payday loans and other types of predatory lending that often target lower-income individuals and communities of color; occupational segregation and job stratification along the lines of race, ethnicity, and gender; and tax advantages that favor people who have jobs that offer benefits like 401(k)s (and leave behind those who don’t).

That said, good financial literacy programs are a crucial adjunct to policy changes. One way to think of it: once the food is in the kitchen, it’s helpful to know how to cook a meal or two. And it can be helpful to learn how to deal with different ingredients even if you don’t currently have them in your cupboards.

The (potentially blinding) power of perspective

I want to tell you a story that has nothing and everything to do with financial literacy programs and how we view and implement them.

At the beginning of the Covid-19 pandemic, I lived in Harlem. I’m a middle-aged white woman (you’ll understand why this is relevant shortly), and at that time, I lived in a fourth-floor walk-up with my two senior dogs. 

In the early spring of that year, NYC was flooded with sirens; the streets were emptying; Broadway had just gone dark; and the case counts were skyrocketing. While things seemed different in other areas of the country, much of NYC was afraid to go outside. The uncertainty and fear about what was going on, the terrifying stories in the news, and the sheer population density led many people to hunker down as much as possible; some didn’t leave their apartments for weeks or even months. But I didn’t have a choice; with two dogs, I had to go out. So each time I took the dogs out—once in the morning, once at night—I did my best to avoid the roughly 500 people that lived on my short street. I often walked in the street to try to maintain a 6-foot buffer, while a good friend and his dog walked with us, making their way on the sidewalk. I moved as quickly as I could with an 11-year-old pup with 4-inch long legs and a 13-year-old pup with arthritis and back problems. Which is to say, we didn’t move quickly at all. 

Some context: I have health issues that put me at high risk of complications from Covid, and I’ve had two bouts of pneumonia that made me acutely aware of what Covid might feel like for me. So to put it plainly, I was doing everything in my power to avoid catching it.

Then, after George Floyd was murdered and protests sprung up across the country, a curfew was put in place in NYC, and people were supposed to be inside by 8:00 p.m. 

Instead of respecting the curfew or feeling daunted by it, I felt relieved that I could walk my dogs when fewer people would be out on the street. It felt to me like it would be safer, in the sense that the fewer people I saw, the less likely I was to get sick.

With that in mind, I called my friend to join me around 9 one night to walk our dogs. He was one of the few people I saw regularly during the first several months of the pandemic—he lived five blocks from me, and we walked our dogs together almost daily, and sometimes twice a day. For context, my friend is a 6’3 Black man.

When he told me he couldn’t walk with me that night, I was baffled—I thought he’d be as excited as I was that fewer people would be outside. But he quickly brought me up to speed, saying, “What do you think the police might do if they catch me out after curfew?”

It mortifies me still that it never occurred to me that his experience being out after curfew and my experience might be entirely different simply because he’s a Black man and I’m a white woman. I’m ashamed to say that had never crossed my mind.

Why the long non-financial tale?

I’m sharing this story to illustrate a point. There are times when we can’t even conceive of experiences we haven’t had ourselves; and we sometimes forget that other people’s experiences are significantly different from ours in ways that (understandably) shape their actions, just as my experiences shaped mine. My experiences with my health made me especially afraid to go outside during the beginning of the pandemic; my friend’s experiences made him especially afraid to go out after curfew. And both of our perspectives were valid, though from the outside looking in, others may struggle to understand them.

Financial literacy content should acknowledge and validate our differing experiences. And ideally, it should emphasize a few key points, which is something we strive to do at Stash101. We strive to consistently emphasize that:

• Money is a tool and should be viewed as such
• Learning how to understand and use money as a tool can position people to make choices that can potentially help them and the people they love
• Each of us approaches money in different ways, in part because of our different experiences—and that’s ok. (Here’s a Stash101 lesson that speaks to that.)

At the end of the day, good financial literacy content can help to level the financial playing field, which is the aim of both Stash101 and its parent company, Stash. Visit Stash101 to see how we’re trying to meet that goal by helping the next generation learn about money. And if you like what you see, spread the word—tell the educators in your life about our free platform and (also free) financial literacy curriculum.

~Story told by Janna Sakson