By John Hope Bryant and Michael Flaherty
Boston – Throughout Boston and across the country, many people are worried about the economy, questioning how we can endure this period of financial instability.
Surviving through these dismal fiscal times is especially challenging when so many Boston residents lack important financial literacy skills, which is probably best illustrated by the number of predatory subprime mortgages purchased, high-interest consumer debt and the large presence of fast-money businesses preying on individuals without a bank or credit union account.
While financial literacy is not a cure-all for our economic woes, we believe expanding educational outreach efforts in that area must be part of the foundation of any plan to raise our city up onto stronger financial ground.
Financial literacy is about more than just opening a bank account. Financial literacy is a part of the solution to stemming the foreclosure crisis; it’s part of a strategy to steer people away from crime; it’s about helping people transition out of homelessness; it’s about opening the doors to other forms of advancement, including a college education.
It’s also about keeping the city of Boston secure, as cities and states across America are experiencing a steep decline in property tax revenue resulting from the soaring rates of foreclosed homes, which again, are tied to massive levels of financial illiteracy. Financial literacy is about creating opportunities for economic justice and equality.
Outreach to improve financial literacy is particularly crucial for populations who face barriers to employment or currently lack the education and skills to make positive financial choices.
Our city’s youth are also among the constituencies deficient in financial “smarts” and underserved by traditional financial institutions.
In April, National Financial Literacy Month began with the release of Jump$tart Coalition’s national survey testing the financial literacy of more than 6,800 high school seniors. Participants correctly answered only 48.5 percent of the questions, demonstrating the persisting need for youth financial literacy programs.
With our youth in line to serve as our next generation’s CEOs, teachers, firefighters, doctors and scientists, investing in them becomes paramount to investing in our economy — both for today and for the years to come.
For Boston’s youth to prosper, we must provide them with opportunities to learn, work and equally as important, to save. To fully capitalize on the learning and employment opportunities we help establish for them, we must be certain that at the same time, we teach them the importance of saving a dollar; the value of a bank or credit union account; the long-term significance of making sound financial decisions; the language of money. We need to put financial knowledge, and empowerment, in their DNA at the very earliest age. Otherwise, the significance of youth employment diminishes.
The city — through partnerships with its public schools, community-based organizations and private finance sector — has an opportunity and an obligation to give Boston’s teens the financial literacy tools that will help put them on a path of self-sufficiency and financial stability.
During a hearing the Boston City Council held on April 17, the city identified a real partner in the financial literacy nonprofit, Operation HOPE Inc., which has been running Banking on Our Future in Boston since 2003.
According to BOOF program manager, Meghan Hoyt, the initiative educated 15,873 youth in the Boston area to date. Over the last five years, HOPE and its supporting partners have invested more than $725,000 in Boston’s youth, with a future investment cost of just $46 per child. Soon children completing Banking on Our Future will be offered an opportunity to open a bank account, too.
While students hired through the Private Industry Council for summer jobs are provided financial literacy training, students hired by the city are not. Starting this year, we will work together to end this imbalance and expand financial literacy training to all Boston teens employed by the city’s summer jobs program, at no cost to the city.
This focus on youth workers will have a substantial impact on a larger-scale campaign to bring more people into the financial mainstream.
Education is our strongest asset in efforts to help people understand that becoming banked is the first step towards realizing even greater financial dreams and aspirations.
The city, state and federal governments certainly need to continue to fund and operate programs that help meet the immediate needs of the poor. However, to actually end poverty and maintain an economy that allows upward mobility for all residents, the city needs to invest in programs that provide low-income and underserved families the tools necessary to become financially independent.
Teen-focused programs like those offered by Operation HOPE are the first step to making it possible for Boston to be a city that guarantees quality financial opportunities for every resident. Together, we can empower teens and low-income workers by opening the doors to financial independence.
John Hope Bryant is founder, chairman and CEO of Operation HOPE, and Michael Flaherty is an At-Large City Councilor in Boston, Massuchusetts. Mr. Bryant is also the newly appointed vice chairman of the U.S. President’s Advisory on Financial Literacy. President Bush signed an Executive Order on January 22, 2008, making financial literacy the policy of the federal government. Financial guru is chairman of the President’s Council. They will serve two sitting U.S. presidents in this role.