Everyone recognizes how difficult it is to successfully function in today’s world without basic literacy skills – reading and writing. Yet, few have thought how the lack of financial literacy, that is the ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial well-being, affects one’s success. Having a bank account, balancing a checkbook, managing debt, and saving for emergencies and retirement benefit most of us greatly, and lacking any of these skills can have a profound impact on success.
The Data and Why It Matters
Did you know that more than 9 million households nationwide and 1,500 right here in the City of Roanoke do not have a bank account? Instead, they rely upon a myriad of non-bank financial tools like money orders, prepaid debit cards, payday loans, and check-cashing businesses to meet their financial needs. Why does this matter? Because without access to mainstream banking, it is nearly impossible to secure a loan to purchase a car or a mortgage for a home, and everything costs more – fees and interest rates – for all those services. Why should any of this matter to local government? Because those fees and interest charges represent dollars that are not otherwise being put to productive use in the local economy or going toward savings to advance education, deal with an emergency, or prepare for retirement. Home ownership has repeatedly proven to be the cornerstone of strong neighborhoods, but without access to low-interest debt limits, who would be able to become a homeowner? Similarly, not having enough money to respond to a medical emergency or retire comfortably often results in the need for public assistance that costs us all.
Roanoke’s Response
Fortunately, for some time this issue has been the focus of local attention. The Bank On Roanoke Valley effort, led by the United Way of Roanoke Valley, is a coalition of partners, including the City and many of the local financial institutions, designed to respond to those who are “unbanked” or “underbanked.” In addition to helping get hundreds of Roanoke families a bank account, since its inception Bank On has provided various educational programs designed to enhance individuals’ and families’ financial literacy. A new set of classes is about to begin on Oct. 16 and will take place once a month through March of next year. Contact Amelie Rives with United Way at 540-777-4203 for additional information. These classes, held at the Williamson Road Branch Library, focus on goal setting, budgeting, debt management, and saving.
In addition to the Bank On effort, these same partners are exploring the potential of establishing one or more Financial Empowerment Centers. Successfully used in other cities, these centers help individuals and families build financial assets to help better endure emergencies, gain better access to banking services, protect their financial resources from predatory practices, and receive professional financial training and coaching. By delivering one-on-one financial counseling as a free City service, the Financial Empowerment Center model offers cities a tangible strategy to help those most in need of critical one-on-one assistance and build community financial stability.
The Challenge
I encourage you to learn more about the resources available to improve financial literacy. Take a look at the United Way’s Bank On program and the courses it offers. Patronize the financial institutions that have partnered with the City and the United Way to help ensure greater access to financial management knowledge and skills. For our community to succeed, we need people to succeed. For people to succeed, they must possess a set of skills that include reading, writing, and financial literacy.
- Bob Cowell