Financial Literacy Needs a Facelift: A Networked Approach to Financial Capability in California

By Esther Fishman

It seems to me that people typically pursue financial education on an as-needed basis and usually when there is a crisis or a big purchase involved.  I went to a session for potential first time homebuyers in San Francisco and was amazed to learn that more than half the participants had never put together a personal budget. While I appreciate their willingness to create a budget to determine the affordability of home ownership, I wondered what it would take to get people thinking about their finances earlier on. How do we integrate financial capability into the everyday?  How do we move away from crisis treatment to prevention? How can we centralize the resources that already exist?

The California State Controller’s Office is trying to promote financial capability via community networks rather than a standalone formal educational program.  They are coordinating events across California in “Manage your Money Week” which runs October 18-25, 2014.  The State Controller’s Office is bringing together leaders and financial educators from the public, private and nonprofit sectors to share ideas, dispel myths, discuss how to raise public awareness and disseminate resources at current contact points, rather than creating new ones.  There are a lot of people doing financial capability work and a lot of people with access to communities. Manage Your Money Week will build a financial capability infrastructure enabling the experts and the high-touch community leaders to better serve communities by reducing program redundancies and increasing outreach.

The advantage to this strategy is that these financial capability hubs, linking multiple organizations, do not necessarily have to be housed at financial institutions. These hubs will not only encourage development of financial capability, but will expand the traditional curriculum to include resources on medical programs, asset building, small business loans, child and family services, veterans’ services and more. The hubs could be at a senior center or a school; places where people regularly go and are comfortable having daily interactions. Staff would have systemized information at their fingertips without having to refer clients to an outside organization. The goal is to enable local organizations, which are already deeply connected to the community, to offer resources. Rather than introducing yet another new program into a community, the Controller’s office is tapping into the experts on the ground who really understand the clientele.

Do you want to get involved and become part of this community of practice? The Manage Your Money Week website links to an application to list your organization and program.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

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