Financial literacy vital to closing the wealth gap
Education efforts empower marginalized youth
After Chenaya Valeus moved to Massachusetts in fifth grade from her native Croix-des-Bouquets in Haiti, she used math to feel connected to home. After all, it didn’t matter that she didn’t speak English, because numbers are the same wherever you go.
“Math was a language that I can communicate [in],” said Valeus, 17.
With a swelling passion for math and fond memories of her mom running a small clothing store back home, Valeus realized she wanted to start a business of her own and also be an accountant.
As a senior at Boston International High School in Dorchester, Valeus is taking steps to do just that. With help from Invest in Girls, an organization that partners with schools in Boston and nationwide to educate young women about personal finance and finance careers, Valeus feels empowered to follow her dreams.
“Because I was born and raised in Haiti, I did not even know credit cards existed,” Valeus said. “[Now] I know credit cards are something important, and if you are using it, you have to make sure you are paying your debt on time.”
Experts and advocates say stories like Valeus’s highlight how important it is to educate young people — especially people of color, low-income people, first-generation Americans, and girls — in personal finance. Having the tools to manage money and build assets early in life is one step toward closing the racial wealth gap, equipping minority populations to build generational wealth, and exposing young girls to career paths in a male-dominated industry, experts say.
A 2015 Federal Reserve Bank of Boston study shocked many Bostonians when it put hard numbers on the yawning wealth gap between Black and white families in the city. Researchers found that in Greater Boston, the net worth of US-born Black households was a mere $8, compared to $247,500 in white households. The study, which is getting an update, also showed Black and Latino households were less likely than their white counterparts to own assets associated with homeownership, transportation, and retirement.
Organizations like Invest in Girls hope to address this problem by directing their services to young people who don’t typically access professional financial advice to raise a new generation of financially literate youth.
“If you seed [financial literacy] early, it will be beneficial to all populations and certainly to disproportionately disadvantaged populations,” said Vincent
Muscolino, a finance lecturer at Northeastern University, adding that such efforts could help set up “building blocks over the course of a lifetime.”
Sunaina Tipirneni, a senior at Acton-Boxborough Regional High School and president of the school’s chapter of Invest in Girls, said she learned the value of saving money from her parents, who immigrated to the United States from India in 1999. But after joining the afterschool club, Tipirneni learned to spend responsibly and even invest in the stock market, something she never would have dared to do before.
Invest in Girls also empowered Tipirneni to pursue a career in asset management. At first, feeling outnumbered in a maledominated finance industry intimidated her, but the organization created a safe space for her to learn, Tipirneni said.
“It just felt like I was an underdog and [Invest in Girls] gave me hope,” she said. “How my family raised me made me shy away from this kind of stuff, but I think it’s important to really tackle it head on.”
Conversations about money are often uncomfortable or “a sore spot emotionally” within marginalized households, advocates say. But the Babson Financial Literacy Project aims to make money talk less taboo and more accessible through free virtual workshops covering anything from managing a credit card to planning a budget.
To ensure programming targets young people who need it most, cofounder Kathleen Hevert, an associate finance professor at Babson College, said the project connects with community colleges across Massachusetts, which serve “the highest percentage of low-income students in higher education” and account for “49 percent of undergraduate credit enrollments,” according to the Massachusetts Association of Community Colleges.
“Those who are intimidated by financial knowledge or just would rather be doing something else ... that’s who we most want to be reaching,” Hevert said. “Our goal would be that [students] live a happier and healthier, more secure financial life.”
To help young Bostonians smartly manage their money the Vincita Institute — another financial education organization partnered with Northeastern University — offers free financial literacy courses to youth of color.
Executive director Nicholas Josey said people from marginalized communities often fall prey to advertisements encouraging consumers to spend money. Meanwhile, online get-richquick schemes and mediocre financial education standards across public schools in Massachusetts create the perfect storm for money management mistakes. But this summer, the institute offered a course focused on saving, insurance, investing, retirement, and estate planning to teens ages 14-19 through the Madison Park Development Corporation’s summer youth development program. Participants like Rodnisha Granger, a student at Boston Preparatory Charter Public School, shared the information they learned with the adults in their life.
“We do struggle because money doesn’t grow on trees,” said Granger, 17. “But [Josey] has given me a lot of knowledge for me to better my family’s financial means.”
The Vincita Institute encouraged Granger to study entrepreneurship and accounting in college, and she hopes to own a business one day. But Granger said the value of her newfound knowledge extends beyond just herself.
“[My dad] has dreams ... and I want him to start his dreams now,” she said. “It just makes me feel better about helping the next generations of my family.”