America has a financial literacy problem.
While many of the decisions we make every day revolve around money, too many people don’t know how to manage it.
According to a March 2020 survey conducted by The Harris Poll on behalf of the National Foundation for Credit Counseling, 78% of people agree — including nearly a third who strongly agree — that they could still benefit from advice and answers to everyday financial questions from a professional considering what they already know about money.
This unfortunate reality can depress opportunities to grow wealth and adds stress on those who are worried about their retirement needs. One way to address this financial insecurity is by expanding financial education.
Tyrone Ross Jr., CEO of Onramp Invest and financial literacy advocate, has made it his mission to improve financial education for Americans of all backgrounds.
To understand how the financial services industry may need to adapt to demographic changes, we spoke with the Onramp Invest CEO on new approaches to learning about money. Here are edited excerpts from that interview.
How do you think the financial education landscape needs to change for Americans of all backgrounds to be more confident about building a more stable financial future?
This is an American problem, regardless of color or zip code. We need to make sure we are being targeted; that the overarching scope is getting financial education into our schools and our homes as early as possible.
We need to stop saying financial literacy and say financial education. Financial literacy has been stigmatized to be for the disenfranchised, the poor, the dispossessed.
So I’m stopping personally saying financial literacy — it’s financial education.
The minute you bring up literacy, it’s for poor people, it’s for Black people, it’s for brown people, it’s for minorities. No, it’s for everybody. Financial literacy in this country transcends class, so we need to make sure we’re understanding that.
Financial education in this country needs to become a revolution. We need to go younger, we need to be starting in kindergarten.
Millennials are now the largest generational cohort in the U.S. and minority populations are growing faster than white populations. As the demographic changes, how will the financial services industry change in how it serves this new demographic?
There’s this democratization of access that is happening through technology.
I have met some of the most unbelievable, committed professionals who are realizing (that) now we have access and education and resources the majority of people don’t.
When you look at the financial services industry, the money that was spent to promote is now starting to be spent to educate, to empower (and) to expose.
But as the demographics change, it gets younger and the millennial part of it comes into play. You look at the mixing of culture, of race, of exposure to different types of experiences. The oldest millennials are 40 years old now. The youngest (in that demographic) are still in their late 20s. It’s a totally different group who look at the world differently.
Now, that power shift happens and the wealth transfer happens, but (even though) it takes four to five generations to get out of poverty in America, when you look at what’s happening now, the underlying issues that America has race, class, education, infrastructure (and) technology, all these things are to the fore, and there’s a whole group of millennials that are focused on what can we change in one generation.
There is a wave of giving that is overtaking this country and it starts with the millennial generation. The financial services industry is going to permeate that in every corner of this country.
Do you have any specific advice for women of color?
As a Black man, I have my own experience. I could only imagine what it’s like to be a Black woman or a woman of color when it comes to dealing with finances.
If you look at the statistics of poor, the impoverished, a lot of it is women, women who are married and then something happened to their spouse and they weren’t engaged in the finances.
I would encourage all women, regardless of race, color, creed or denomination to get familiar with financial education and financial terms and resources. If you are a woman of color, it is important to understand that there is a class in this country that are forgotten, and we need to look at our own histories and communities to empower our own to learn.
I looked at how my mother struggled as a teenage mom, and as I travel across the country, I look into the eyes of so many Black people and Hispanic people and mixed people and people who don’t look like where all of the power resources are, asking: “Is it for me?”
So the best advice that I always give Black kids, poor kids — because poor is not a color, it’s a condition — I tell them, don’t feel like the stock market is for them, don’t feel like estate planning is for them. It’s for everybody.
I would just say get very familiar with financial terms. Build out a trusted group of CPAs, financial advisors and attorneys. If you don’t have access to those people, go into our networks and ask.
One of the things that you learn as you spend time with people who are shut out is they feel like they have no way to these things, (but) there are plenty of black and brown networks that I have that cover all of that.
We have to make sure we are making ourselves more accessible, but we also have to have people take accountability. Come to reach out to us, we are out here, we want to help.
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Q&A With Tyrone Ross: How to Increase Financial Education originally appeared on usnews.com