I've met far too many college students that lack basic financial knowledge. Concepts, such as credit, budgeting, investing and financial planning, among others,
We have to do more to help prepare younger generations to manage their finances and navigate a complex financial landscape.
However, the responsibility doesn't fall squarely on any one entity or person. Every member of the financial services community and beyond plays a role. That said, some organizations, including banks, have name recognition with much of the population. Banks, in particular, should use their name recognition to build trust with historically marginalized communities and prioritize financial literacy initiatives. It's a win-win.
Offering meaningful and impactful financial literacy programming will go a long way toward helping people live more financially healthy lives, and at the same time, it will allow banks to build relationships with individuals they otherwise may not have.
But let me be clear, "meaningful and impactful" doesn't mean one-day seminars or general reference materials and resources that do not apply to people's specific situations. Everyone comes from a different background and has different goals. Some people want to start a business, some want to flip real estate, others want to simply improve their financial footing. Financial education needs to speak to their hopes and aspirations. You need to sit down with people and connect with them to understand what their day-to-day challenges are.
The custody bank achieved its goal for the amount of deposits it placed into minority banks and community development financial institutions by the end of the year.
Financial health and consumer empowerment sit at the intersection of education and engagement. I've seen it work firsthand.
For instance, Experian and HomeFree-USA provide financial and credit education information and resources to students from historically black colleges and universities, or HBCUs. Students are provided an opportunity to join live and online financial education sessions, as well as compete in a hackathon to develop a new credit education program.
Most students do not understand how connected credit is to everyday life, and the hands-on experience allowed them to fully understand basic concepts and apply them to their everyday lives.
The beauty of these initiatives is that they have the power to uplift entire communities. Sometimes receptiveness to the message is based on the delivery mechanism. We tend to trust people within our network. Having these educational opportunities available empowers students to take the information they learn and share it with family and friends. In fact, I've seen some students help their parents buy their first home with the education they receive.
We have an opportunity to stop the cycle of financial instability. But to effect real change, we must work together and invest in our historically marginalized communities. That means going into communities and engaging them directly.
For better or worse, our finances impact nearly every aspect of our daily lives. The more financial knowledge we can absorb and internalize, the better positioned we'll be to control our financial future. Financial literacy needs to be a priority, and it can help close the financial inclusion gap.
