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As published this month in the OECD Observer Magazine

Financial literacy might not help ordinary people outsmart Wall Street professionals, but it can help people manage their funds

Rarely is there a silver bullet solution to the myriad economic problems that we face today. My mission and purpose since starting Operation HOPE in 1992 has been simple: to promote and implement financial literacy education for adults and students in every country where money exists. HOPE is an international non-profit financial literacy education and empowerment organisation that believes in giving people a “hand up not a handout”. Over the years, I have urged, convinced and even cajoled to get my message across.

Financial literacy, or what I call “silver rights”, is the next civil rights issue in America and worldwide. The Silver Rights Movement recognises that everyone–black, white, brown, red or yellow–wants more green (the colour of currency in the US). With the unemployment rate in OECD countries moving from 6.8% in April 2008 towards 10% in 2010, close to 57 million people are out of a job–this is almost the equivalent to the entire population of the UK.

There are several ways we can come out of this economic reset. We can rack up personal debt, expect our respective countries to continue to prop up the economy and close our eyes, wanting things to work out for the best. But as we all know, real solutions involve looking at where we are, what went wrong and what can be done to immunise ourselves from this type of crisis in the future.

Our partner on the Gallup-HOPE Financial Literacy Index, Gallup suggests that although government statistics pin the unemployment rate comfortably around and above the 10% mark, the real percentage of unemployed Americans is probably closer to 20%. For the US and others looking at strategies for creating jobs in their respective economies, we need to return to an environment that encourages small businesses, entrepreneurship and self-employment projects, and all of this starts with understanding the “language of money” and financial literacy. The power of new ideas is what we need in order to create a new generation of jobs and increase the tax base for the 21st century.

While there is enough blame to go around regarding the sub-prime lending catastrophe in America, one thing is clear: too many people were looking at the short term asking, “What is my payment”, rather than looking at the long term wondering, “Can I afford this? What is the interest rate?” Money is an elusive and emotional issue for many people. Statistics show that in the US, some 50% of those in foreclosure never pick up the phone to call their lender.

The reason people don’t call is shame. In many countries, the number one reason for divorce is money, and the number one reason kids drop out of college in the US is money. While we spend billions on formal education, which is a good thing, we spend relatively small amounts of time, money and energy educating people on the basics of our free market system. Moreover, we spend even less time and resources working to, in the words of HOPE global spokesman Ambassador Andrew Young, “make free enterprise and capitalism work for the poor”. Like it or not, money makes the world go round.

Financial literacy most likely won’t help regular people outsmart Wall Street traders, financial professionals and predict the next economic downturn. What financial literacy does do is give people an understanding of the “language of money” so that they can manage their own funds.

The Silver Rights Movement recognises that we don’t just have to find ways to make more money, we need to find ways to do more with the money we have. In America, even before the economic crisis, statistics showed that 70% of households lived paycheck to paycheck. And with the economic downturn, there is an increasing number of families finding that their income doesn’t cover their expenses. Consumers then turn to high interest ratebearing cards, inflate their own personal debt levels and stay numb to the chaos around them. We need to promote smart financial decision-making and, in particular, we need to empower the underserved and impoverished families in understanding the basics of our economic system.

Financial literacy is important because financial stability affects every aspect of our lives. Money can’t buy us love, but it can take the stress off of our relationships, give us access to healthcare and provide for our children.

Economic slaves As Matthew Bishop and Michael Green note in their book, The Road from Ruin, 40 million people in the US, the richest country in the world, do not have a simple bank account. They are victims of checkcashing kiosks and are not part of the global economy. Worse, they don’t have the ability to own a home or access small business loans.

In good times, when work is easy to find and money flows in, it’s easy to not see the foundational flaws in our lifestyles. But when things get tight, it’s the financially illiterate that find it hard to adjust. In my opinion, if you don’t understand the language of money today, and if you don’t have a bank account today, you are nothing more than an economic slave, plain and simple.

Financial literacy is more than understanding the mathematics behind money, and it’s more than understanding credit card interest rates and credit scores. To me, getting the underserved and the underprivileged up to speed in regards to their finances is about empowerment: empowering them to take charge of their current situation, empowering them to take charge of their own lives and empowering them to aspire to a better future.

We need to convince our government leaders that this is a priority. We need members of the congresses and parliaments of the world to support financial literacy education for all children from kindergarten to 12th grade.

In the US, we need to encourage our members of Congress to support HR 1325–a bill inspired by the work of Operation HOPE and the non-partisan US President’s Advisory Council on Financial Literacy, which would require every college student receiving a guaranteed student loan to also receive a mandatory course in financial literacy. HR 1325 also requires every college or university receiving federal funds to take a mandatory course in financial literacy.

I also encourage everyone to host a financial literacy summit at their kitchen table each week. Children no longer see mom or dad counting the money in their pockets to pay for groceries. Credit cards have replaced the act of spending money and lessened the value of what is being purchased on younger generations. Make sure your family understands the difference between “wants” and “needs”. Giving youth financial literacy tools will only help them as they get older and will help them succeed in this global economy. Global “silver rights” serve to empower the next generation and it is our responsibility to make it happen.


Bishop, Matthew and Michael Green (2010), The Road from Ruin: How to Revive Capitalism and Put America Back on Top, Crown Business, New York, USA.

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