State authorities in Massachusetts often stumble when it comes to providing a framework for financial literacy learning. They did it again this summer: budget-minded Gov. Charlie Baker cut a $60,000 program geared at teaching low-income women how to stretch their resources.
Over the years, Massachusetts has badly lagged other states in promoting financial education, especially in schools. It has no personal finance requirement—or even a requirement to make such a class an elective. For these and other reasons, the state gets an F in financial literacy from the Champlain College Center for Financial Literacy.
Can this really be the home state of fire-breathing Democratic U.S. Sen. Elizabeth Warren? You know Warren, the principle force behind the birth of the watchdog Consumer Financial Protection Bureau and who in hearings this week lit into Equifax ex-CEO Richard Smith. “Equifax is making money; millions of dollars off its own screw up,” she barked.
Somehow, Massachusetts’ passion for financial literacy at the federal level has not trickled down to state officials. But there is hope. In a heart-warming step, state representatives have voted…
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…to override the governor’s senseless cut and fully fund the money mentoring program for low-income women.
That encouraging news trickled out this week in records of a mid-September House session. Before doing cartwheels, though, let’s put the program into context. The Massachusetts state budget is $39.4 billion. Siphoning off $60,000 isn’t exactly Herculean—and it should never have been cut.
That it was cut—and had to be put back—signals something less than genuine support for financial education at the highest levels of Massachusetts state government. Maybe lawmakers should look at this way: If money management were taught in schools, such outreach might not be needed in the first place.
At least the direction is right. The move in Massachusetts comes on the heels of at least two other state actions that keep the arrow pointing upward and also reinforces a global effort to spend more resources reaching women. As a group, women are often culturally disempowered in economic matters. More on that below.
Mississippi puts fraud spoils toward teacher FinLit
One of the encouraging actions this week came in Mississippi, which has the highest poverty level of any state but where leadership embraces financial education to try to bring down those poverty numbers. Attorney General Jim Hood said he would direct $2.5 million in revenue from fines towards training of K-12 teachers that want to lead a personal finance class.
What better way to spend money taken from companies that prey on consumers’ lack of financial understanding? Order the predatory institutions to fund programs that, in the long run, will hurt their profits or crush their business model altogether. In this case, the funding comes from settlements with banks and credit rating agencies that, Hood says, “have caused extreme financial burden to Mississippians through their deceptive practices.”
The funds will go towards the state’s Making Sense of Your Dollars and Cents program through the Mississippi Council on Economic Education, State Treasurer Lynn Fitch, and the Mississippi State University Extension Service. Teachers can apply for training the next two years.
Trying for FinLit, again, in Kentucky—with new data
Meanwhile, in Kentucky Democratic State Sen. Dennis Parrett pre-filed a bill that would require all students to pass a financial literacy program before graduating high school. The actual class remains a distant promise. Parrett’s bill would simply direct the education department to develop a course, and there is no telling how long that would take. But, says Parrett, “This would be one of the best educational requirements we would have for our students.”
He’s a believer who filed a similar bill that failed in an earlier session. But there is no denying that interest in the subject is picking up. Alex Todd, who has taught a financial literacy course for 20 years in a Kentucky high school in Elizabethtown, says the number of students enrolling in his personal finance elective has risen six-fold the past decade.
Why financial inclusion for women is a hot topic
Women perform 66% of the world’s work and produce 50% of the globe’s food. But they earn just 10% of the world’s income and own only 1% of the world’s property. The roots of this disparity are many, and include cultural issues in societies dominated by men. Consider: women in Saudi Arabia still are not permitted to drive—a ridiculous condition that finally will be rectified next year.
It’s clear to most policymakers around the globe that economies would benefit from a more financially savvy and active female population. For starters, income in the hands of women is associated with larger improvements in child health and higher spending on health, housing, and nutritious food.
Financial literacy for low-income women a hot topic
Millions of low-income women around the world run micro businesses that would benefit from modern financial products like micro loans and digital payments. So, many nations are targeting women for financial inclusion—and the simplest fix may be through mobile technologies that boost business by speeding transactions and making them more secure, transparent and convenient.
Globally, women own 300 million fewer mobile devices than men. This is despite the fact that most women feel safer with a phone and that phones help them lead a more secure, connected and productive life. Let’s start by fixing that, and keep going.
As originally seen in the media platform, Right About Money.