This post is sponsored by Verizon FiOS as part of the #FIOSPhilly Campaign.
When I worked for the alphabet banks, Financial Literacy was a word bandied about, but never really explored. I was the first volunteer when an opportunity to spread knowledge to other was available, but that was more to get out of the branch. However, the more I prepared for class, the more I learned about helping the “unbanked”* and wanted to aid this group of people. I realized that financial literacy was important. Many of the unbanked are low-income families preyed on by PayDay loans, rent to own stores, or car title loans.*
Fast forward to today. Low income families are still prey to those who have learned how lucrative financially unsavory people have proven to be. Why steer a family to a local bank or credit union when you can nickel and dime them through the instant gratification of a payday loan**?
Keeping that in mind, imagine how difficult it is for a new American to navigate our banking system. I remember the day my mom took my sister and I to the bank after we sliced open our Snoopy bank. A banker smiled as we made deposits into the dinosaur of accounts, a passbook savings account. It never entered our minds that a bank was not a safe place for our money. A new American may have other thoughts. Some come from countries that have no formal banking system. Some from countries that relied on the “credit” of a family member.
I learned these facts along with a Banking 101 refresher when I attended a training for Financial Literacy for Refugees in Center City led by Marjana Ababovic. A Bosnian refugee, Ababovic taught me the following to help my residents learn about financial literacy.
How do you define financial literacy?
I say it is the basic understanding of how the banking system works. In the class, others defined it as a knowledge beyond ways to earn. What’s your definition?
The following questions are for self reflections. The women I met from Finanta said they would add this to their curriculum for a financial literacy class.
- Ask yourself, on a scale from one to five, how financial literate are you?
What did you buy in last 24 hours? (This can also be a daily exercise to bring every day spending under control.)
- The app Evernote can help track this information
- Scan Cam can also be used to scan receipts to crystal clear end of the month account reconciliation.
- What is your credit score?
- Credit Karma gives access to two of the major credit agencies.
- Once a year, pull your credit from Annual Credit Report.
- What are you saving per month?
- Capital One Investing, formerly Sharebuilders, is a beginners way to invest small amounts in the stock market.
How will you retire? What will you live on?
After this reflection, how financial literate do you think YOU are now?
What is one thing you wish you could tell your younger self?
- I definitely would tell my younger self to SAVE, SAVE, SAVE. And travel.
In addition to the apps I mentioned above, these apps can also help with cutting costs:
- Use the Google app to find gems like Women’s Opportunity Resource Center (WORC) or Finanta. WORC has a matching savings program and Finanta offers in-depth counseling for the credit process.
- Financial Football. This interactive game engages users to learn to learn through plays
- TedTalks. These encouraging videos are informative and addictive.
What apps can you add to this list?
*In his book Evicted: Poverty and Profit in the American City Matthew Desmond explains that “[T]here is a business model at the bottom of every market.”
**Payday loans as are illegal in the state of Pennsylvania. A lobbying group is gathering the cash reserves needed to overturn this law.