I am a supporter of financial literacy. I am a constructive critic of financial literacy. Both are legitimate and essential in an honest dialogue. As HOPE Global Spokesman Ambassador Andrew Young said, "John, be skeptical, but don't be cynical. To be cynical is to be without hope."
Operation HOPE pioneered financial literacy as policy within the U.S. federal government in 2008, when we inspired then President George W. Bush to sign an Executive Order establishing financial literacy as new federal government policy, and with it the creation of the first ever U.S. President's Advisory Council on Financial Literacy. I was honored to serve as vice chairman for this first council, with Charles Schwab as chairman, and to serve as chairman of the Council Committee on the Under Served.
President Barack Obama took this vision to another level; bringing to life his own Executive Order during his Presidency, and thereafter establishing the U.S. President's Advisory Council on Financial Capability (on which I am proud to serve), and then the Federal Consumer Protection Bureau.
President Obama named smart people to head both, with Ariel Capital Management's extremely smart founder John Rogers chairing the Council, and my friend Professor Elizabeth Warren spearheading the foundation of and for the Bureau. I recall one conversation in particular with Professor Warren, where I asked her what she would think if I said, "financial literacy was the new civil rights issue?" Not only did she agree with me, but she went on to say that she thought that "done right," while regulatory review and policy making might consume the formative years of the Bureau, its legacy should be a new foundation of financial literacy in America. Professor Warren and I agree 100%.
That said, increasingly I don't 100% agree with myself. That is to say, my thought process on financial literacy itself is constantly evolving and growing -- looking forward, and to what comes next. No different than a technology pioneer looking back at an old software release. LinkedIn founder Reid Hoffman once said, "if you are not slightly embarrassed by your 1.0 software release, you released too late." Doing something, is always better than doing nothing. Never let the best, become the death of the good.
There's little doubt that there is a financial literacy crisis in America, with an entire economy brought to its knees by a massive case of consumer "payment-itus," or the most powerful economic driver (US consumers), powering the most powerful economy in the world today (still the US economy), by purchasing a home and God knows what else by asking "what's the payment?" And you never ask what's the payment when there is an interest rate attached.
We are not talking about poor people here either -- we are talking about middle class America. Poor folks do not have $20 trillion in asset value to lose. An entire generation, who effectively aided and abetted their own economic crime, against themselves.
And so, there are plenty examples of financial predators that took undue advantage of consumers -- from Ameriquest Mortgage, the old Countrywide Mortgage (pre-acquisition by Bank of America) on down -- but we (the consumer) helped them by not understanding the right questions to ask, nor respectfully, the right answer to expect. As I have said before, Bernie Madoff pulled off the crime of the century by hiding in plain sight.
Even with the vaulted and essential Consumer Federal Protection Bureau, there will be no mortgage police sitting at your kitchen table when you make the most important decision in your family's economic life. You will have to do that.
After observing countless financial literacy courses by credible nonprofit organizations, financial institutions, credit unions, and even our own award-winning Banking on Our Future Program at Operation HOPE, which operates in more than 270 communities across America, I have come to the conclusion that as much as we need an entire generation of young people who are financially literate, the reality is that most young people in America could really care less.
Said more pointedly, if you want to put a child to sleep, offer them a traditional financial literacy course.
We have reduced the critically important and relevant issue of financial literacy to a common sense financial version of a math class -- and our young people are already taught a math class.
The reality is that young people do not want a traditional financial literacy course any more than they want to go to the dentist.
They also don't want a bank account, even though 40 million Americans are either unbanked or under-banked in the richest country in the world.
Respectfully, young people don't want to graduate from school (which is not to say they don't want to graduate either), and they really don't want to be lectured about it.
Our young people want the very same thing that you and I do -- a reach towards their true aspirations in life.
You don't want a mortgage. When was the last time you awoke in the morning, alive with a vision for a red, subprime mortgage with high interest rates and fees? Who wants that? Precisely. But millions of Americans got precisely that.
They didn't want the mortgage, they wanted to become a homeowner -- maybe too badly. The mortgage was simple the vehicle for their dreams, and not the dream itself.
You don't even want a car loan, or a bank account even. You want the car of your dreams, or to start a business, or save for retirement, or frame out a financial vision for your family's future self-reliance, or at least their dignity rich sustainability. It was the dream, not the vehicle we sought.
Kids don't want financial literacy any more than they want extra homework, but what each of our kids actually do want is an honest shot at the American Dream.
They want to grow up to be successful, to reach for their dreams, to create something great, and maybe even to get rich, legally.
The answer to all of these things is financial dignity, and the tool to get there is financial literacy.
This is what will get the endorphins racing in their brain, and this is what will drive graduation rates up, and dropout rates to all time historic lows.
This is America's history "magic sauce." What made America great. What will make her great again. Making education relevant to our kid's future. With the best of intentions, we have somehow disconnected education from aspiration.
US Education Secretary Arnie Duncan would like to see financial literacy as a priority in America's school houses, but he cannot get that done without evidence that financial literacy is making a meaningful difference in young people's lives. He needs measurement, but what he measures is as important as the measurement itself. In No Child Left Behind, I believe its architects were well meaning but the result is the same; NCLB hammers on a child's weaknesses. If a child is terrible in English or math, NCLB will simply announce their weakness, not do anything about it.
Financial dignity focuses on a child's strengths, not their weaknesses, and brings to life their aspirations, their hopes, and their goals - all which will drive greater academic achievement. Our Gallup-HOPE Index is the first step in the direction towards helping Secretary Duncan to actually "measure it."
Financial literacy is a tool in route to the higher calling of financial dignity. It is the vehicle, not the goal.
Financial dignity is closer to what I call the "universal language of money" that the whole world actually speaks.
It is closer to the emotional 'spark' that set in motion the historic civil rights movement of the 1960's in America. A movement that spread to every part of the world where democracy took hold, and the individual right to vote was the empowerment tool.
Financial dignity is the warmth missing from the magic of financial literacy, and the missing link to make it all go click.
We have treated financial literacy as a left brain (quantitative and logic-based) issue, and teach it in a left-brain-to-left-brain manner. And then we wonder why it is not working. Approaching it in this way simply measures a child's weaknesses, rather than amplifying their strengths. Aspirations are a natural strength for every human being on the planet, and they are different for every person - but the same.
At Operation HOPE we now believe that the solution is financial dignity, which will then inspire and inform our left-brain, logic-based quest for the knowledge to act on our (right-brain, aspirational) dreams.
The answer is right brain to left, not the other way around. The key to a financially literate nation, and a growing movement around the world, is a focus on the financial dignity of each and every individual.
The new civil rights movement is reaching, teaching and empowering every person with financial dignity, using the powerful tools of financial literacy first.
John Hope Bryant is a thought leader, founder, chairman and CEO of Operation HOPE and Bryant Group Companies, Inc. Magazine/CEO READ bestselling business author of LOVE LEADERSHIP: The New Way to Lead in a Fear-Based World (Jossey-Bass), the only African-American bestselling business author in America, and a Member of the U.S. President's Advisory Council on Financial Capability for President Barack Obama. Mr. Bryant is the co-founder of the Gallup-HOPE Index, the only national research poll on youth financial dignity and youth economic energy in the U.S. He is also a co-founder of Global Dignity with HRH Crown Prince Haakon of Norway and Professor Pekka Himanen of Finland. Global Dignity is affiliated with the Forum of Young Global Leaders and the World Economic Forum.
Follow John Hope Bryant on Twitter: www.twitter.com/johnhopebryant
But more importantly, it has the seal of approval from the students - many of whom are sharing the book with their families. The financial lessons are told in the context of real life (using emails, IMs and telephone conversations) and students have called it a "reality show in a book." However, the key message is that your values and priorities should drive all your decisions. Balancing a checkbook is math. Understanding whether an expenditures is a smart use of your money is financial literacy.
To learn more, please see the Press Release issued by KIPP which also includes Mike Feinberg’s, co-founder of KIPP, “bigger picture” perspective on personal finance:
http://kipphouston.org/sites/default/files/R%26B_KIPP_091311-1.pdf.
Please go to http://kipphouston.org/pressrelease and scroll down to "KIPP Believes Personal Financial Literacy Should Have Its Own Curriculum"
My prediction -- you will see a powerful shift to financial dignity in the future, which recognizes and honors the whole person. Frankly, it warms up a fairly dry and cold (if not important) issue. Check out www.operationhope.org. Thanks so much.
I am reminded that two of our co-founders, Thomas Jefferson and Alexander Hamilton, didn't agree on where America should be going, but in the end, America became the greatest nation because of the blend of BOTH of their unique voices and perspectives.
Let's go.... and thanks. I know you all care about getting it "right."
I would love to hear about the research you have done on the Banking on Our Youth project. Does your evaluation demonstrate the your participants have a greater understanding of financial issues? Do your participants like learning about financial literacy? How does this compare to the data from the Gallup Poll?
Yes, Banking on Our Future has done assessments, and there are independent assessments as well. And the way in which we teaches Banking on Our Future was in many ways confirmed by what we found in the Gallup-HOPE Index national poll. You can get a copy of our assessment and evaluation work by contacting mary.hagerty@operationhope.org.
We are focused on the larger issue of youth economic energy now, and how youth financial literacy "steaks" to youth economic energy in America. The most important work around the Index is yet to come!
Good financial educators are DOING exactly what you describe, using teaching techniques that are engaging, relevant, timely and actionable. We are engaging the left and right brain and teaching others how to do the same. We are linking financial choices to behaviors and the money scripts we learned as children. We collaborate with other agencies to ensure appropriate wealth building products are available and accessible.
AND we know that in order to change financial behaviors we must help people connect their values and personal goals with their financial choices. Good financial educators meet the audience where they are and realize that while they may be broke, they are NOT BROKEN.
Young people ABSOLUTELY want to talk about money but they don't want someone standing in front of the room preaching to them about not buying expensive jeans or cell phones. I have taught people from ages 8 to 80 and universally the response is gratitude and the desire to want/know more.
We can create a culture of financial competency but we can't ignore the systemic issues that we have in this country that are barriers to that goal. PLEASE don't start yet another buzz word - we are still trying to get people to understand what financial capability is all about.