The Importance of Financial Literacy

Recently I wrote about the tremendous value that results from including financial literacy as part of your company’s employee well-being package. Some of these benefits include enhancing the company’s overall benefits package, reducing employee personal stress, creating a more engaged workforce and potentially reducing the number of employees who leave for higher paying jobs.
Bottom line, I strongly believe helping staff build their financial literacy muscles is a critical investment that should be made by all employers.

This week I want to narrow my focus, stressing the need for investment in financial literacy specifically for women of color.
To put the discussion in context, according to a study by the Assets Funder Network, the median net worth for single Black women is just $200 and $100 for Latina women, compared to the median net worth for single white women of $15,640 and $28,900 for single white men. And these disparities continue to exist, although, according to the National Center for Educational Statistics, Black, Latina, and Native American women are continuing to matriculate onto college campuses in increasingly larger numbers.
A recent article by Bola Sokumbi in (CleverGirlFinance.com) suggests several (this is not an exhaustive list) important reasons why it is important to invest in financial literacy for women of color.

The lack of financial literacy resources/services that cater to women of color. As Sokumbi notes, “while financial literacy alone is not the solution to the racial wealth gap, it gives us the right foundation. Having financial education tailored to our reality, equips us with the knowledge needed to take the necessary actions to build wealth.”
The profound effect of the gender wage gap on women of color. I have highlighted this wage gap in my previous blogs over the past several years. This wage gap compounds the investment gap, resulting in much less money to support retirement and other long term financial goals.
Women of color carry the majority of student loan debt in the US. According to AAUW (American Association of University Women), as of 2021, $929 billion of the $1.54 trillion outstanding student loan debt in the US is held by women. And when broken down by demographic, black women have the highest student loan debt of any racial or ethnic group. So, while women of color have made strides in obtaining college degrees, student loans are impacting long term financial well-being

The Importance of Financial Literacy

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