Doria Lavagnino speaks about the economic fallout of the paucity of mandated financial literacy in the US. Check out the article at empowerwomen.org — where this piece originally appeared — to learn more about how all women can work together to empower each other and their finances. This Women’s Small Business Month, it’s time to get involved!
This year has been hard on almost everyone. Covid-19 has ravaged our country’s health and economy, killing people of color disproportionately and attacking the economic security of women more than men.
If Covid-19 has had one positive, it’s this: We can no longer ignore the economic fragility facing women and people of color in our country.
I see parallels to the endemic lack of financial literacy in our country—a reality that disproportionately affects women and people of color.
Four years ago, my cofounder and I left our jobs to create a start-up focused on financial literacy—called CentSai—as a reaction to the fallout of the 2008 credit crisis. At the time, many people didn’t understand why they were losing their homes while financial institutions were receiving bailouts. Today, the pandemic has brought our financial literacy epidemic front and center again.
It’s no surprise—only 21 states require high school students to take a course in personal finance, according to the Council for Economic Education (CEE). How can we expect students to understand the basics: how to budget, understand credit, why saving is essential when legislators don’t prioritize making financial education compulsory in every middle school and high school in America?
While the Community Reinvestment Act was meant to encourage financial institutions to reinvest money and education in lower-income communities, it seems to have become a checkbox requirement, not a mandate for change.
Financial Illiteracy: What Can Be Done?
We need to start with support for teachers and parents—our frontline advocates—providing them with the materials and training they need. Next, our local, state, and federal elected officials should make financial literacy a core curriculum skill, not an elective. Without it, many Americans will continue to make poor money choices.
As the mother of two daughters, I am acutely aware of how economic empowerment is the key to any woman’s independence. Yet white women still earn 84 cents for every dollar a white man earns, and Black and Latina's women continue to make even less.
How can my daughters—or any woman—realize her full potential when she routinely sees other women underpaid and undervalued?
Let’s also start by ensuring the Equal Pay Act is enforced in every state. We owe it to our young leaders to make good on the notion that change starts with mentorship. We must teach them to have the courage to raise their hand in a meeting, to revolutionize with the audacity to take space, and to negotiate their worth.
Vote for elected officials who are serious about acknowledging there is a motherhood penalty for women who leave the workforce to have children. The United States has one of the worst maternity leave policies of any country in the world: Out of 41 nations, ours is the only one that lacks paid maternity leave, according to the Pew Research Center. And the economic fallout of caregiving is dire.
As fintech continues to dominate the headlines and venture capitalist interest, let’s seize this moment to hold our schools, business leaders, and elected officials accountable. This moment calls on all of us to ensure every student has the opportunity to build the money skills they need to be responsible for their future.