Financial Knowledge Project | Financial Literacy

The Financial Knowledge Project was launched in April 2011 to help bring awareness to Financial Literacy Month and to study the attempts of financial educators who instruct the –
  • 46% who use little or no banking
  • 70% that live paycheck to paycheck
  • 21% who spend more than their income
  • 58% that lack a “rainy day” fund.
It is the intent of this Project to reveal the historical impact of the 1977 Community Reinvestment Act.  The Project explores how low and moderate income communities have been impacted by financial agencies’ and institutions’ attempts in financial education.  The Project views how non-profit organizations and colleges are attempting to prepare future workforces with personal financial competency.
Cultural relevancy in this project is the commonality of communities or sub groups.  The project explores how women and Latinos might learn or search for solutions.  The adaptation of activities in these communities should provide insight on how educators plan and execute toward learning outcomes.
Supporting agencies and institutions may use this project to ensure financial support and resources are implemented for the improvement and benefit of the public.  This project seeks to increase awareness of important and significant impacts of financial stresses in LMI communities to help protect and increase the vitality of the economy.
Financial Literacy
Download Report | The Financial Knowledge Project kicks off Financial Literacy Month.

  • 45% of the total U.S. Latino population are under-banked, meaning they have no bank account or made more than one non-bank financial transaction in the past 30 days.
  • Un-banked immigrants pay approximately $2 billion annually in fees to check cashers to access their hard- earned cash.
  • 22% of Latinos have no credit history, compared to 4% of whites and 3% of African-Americans which prevents them from accessing low-cost loans to purchase property, and are cut off from low-cost credit markets, forces them to high-cost predatory lenders.
Understanding the barriers of each community provides a cultural compass.  This project will seek to promote an understanding of community realities and financial challenges.  It seeks out opportunities to engage collaborators in financial literacy.

My Money, how financial litercacy can jumpstart the small business economy

Let’s be smart about our money management and teach others financial literacy so we don’t relive this economic storm. Economic difficulties or poverty is a simple problem with a difficult solution.  Can we prevent poverty from occurring or reoccurring? What preventative financial self-sufficiency initiatives can help jumpstart our economy, who are the key players, and how does financial literacy make a difference? Many know the definition of financial literacy. However, few know how to record results of its effects or how to track people’s improved financial choices to determine the success of money management workshops.

Financial literacy is the ability to understand money and how to manage it so that a person can make informed financial decisions. Financial literacy helps people save, better protect and manage their money, prepare for unexpected events, and plan for short- and long-term goals. So why doesn’t California have any current statewide standard for financial education in our public school system? Perhaps we need to re-brand financial literacy as the new way to live wealthy at any income level.  We should suggest financial literacy classes be titled; how to run your family like a fortune 500 business or how to be wealthy this year.  This might get more people interested about learning how to effectively conduct their finances.  Without proper money management skills, working people live in and out of poverty.

We need to break the cycle of poverty. Well over five million people live in poverty in this state alone.  What California needs is a jumpstart to our economy that is sustainable through financial education, mentorship and small business support.  Government agencies such as the Federal Deposit Insurance are meeting to discuss, “Overcoming Obstacles to Small Business Lending”. This forum on January 13, 2011 takes place in Arlington Virginia.  To jump start our economy, we need to support cash flow initiatives for small business owners.  We should ensure small business owners know some basic financial fundamentals or are obligated to learn more about finances prior to obtaining a loan.  Many times small business owners are tempted into the wrong type of credit because they were approved, not because it will help their business grow.  Bank loans are very difficult to understand and the underwriting process vary from one bank to another.  The most difficult to obtain are small or micro loans needed to start new business or small projects within a small business.  Unfortunately for start up businesses, banks’ require credit history and don’t like to waste time with what they consider to be small unprofitable loans.

Jump staring our economy will unmistakably take place in the small business sector. Micro lending and financial education will take center stage in the FDIC’s small business forum.  What will inevitably come out is that government needs to invest in community groups and local governments that help small business succeed.  Small business financial education and technical support is being done today, but at  fractured and limited way.  Several large financial institutions are collaborating with community colleges to increase the educational or technical support of small business owners and entrepreneurs. Private and non-profit partnerships like CARAT are providing lending opportunities throughout the state that will help improve employment. Many SBA offices are also providing support. The demand for these services are plentiful, and we need to do a better job at letting small business owners know where they can find help. In California the following micro-lending organizations received funding to help jump-start the economy.

CA California Assoc. for Micro Enterprise Opp. $50,250
CA Central Valley Business Incubator $67,000
CA National Community Development Institute $67,000
CA OBDC Small Business Finance $50,250
CA Opportunity Fund Northern California $50,250
CA Pacific Asian Consortium in Employment $50,250
CA Union of Pan Asian Communities $50,250
CA Valley Economic Development Center $67,000

These funds will help start-ups organize and grow their businesses. Help for established small business owners might be on its way in the form of tax breaks. There are many credit building, mentorship and support organizations for small businesses. The California Foundation Fund has established an open directory for support organizations to list their services. This free directory allows small business owners to find accurate and updated information on where they can find assistance.

However, what most small business owners need today is more business. As the demand for consumption grows, so will the economy. This takes me back to my first statement. Consumers and small business owners need to understand how to be money wise to prevent another economic storm.  All the efforts put in place are well intentioned and may have positive results.  As we pull ourselves out of this long recession, some will cautiously look back and others will optimistically move forward.  What we need is a method to track how financial literacy is helping small businesses and individuals make meaningful changes in their lives to better manage their finances and plan for the rainy days to come.

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