Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver. –Ayn Rand
Financial literacy is essential in preparing an adolescent for higher education. For Latino students – especially those who are low-income or of modest means – financial literacy must extend beyond learning to manage the cash in their pocket or bank account. It must also include understanding the functional depth and breadth of money and finance and their broader implications. The critical thinking needed to navigate life in general is essential in financial literacy, too. And since political discourse includes opinions ranging from “the rich are greedy and bad” to “the poor are innocent victims,” financial literacy preparation for Latinos should include self-exploration of attitudes towards money, abundance, wealth, social responsibility and personal power.
More than half of the states nationally do not currently have a financial education requirement for high school graduation. Financial literacy, though, begins early – long before high school. As in other areas of human development, people develop financial skills across time. From kindergarten through high school, a child learns how money works. It might start with an allowance, strategies for earning, requirements for saving and sharing, guidelines for spending and basics of investing.
By teaching young children how money travels from place to place,they learn how societies and industries are linked. Parents are the ones to primarily teach children how to save, keep track of money, spend wisely, live on a budget, invest, discuss finance, get paid fairly, handle credit, share with others, improve life via money and develop an entrepreneurial spirit. For low-income Hispanic parents, teaching children about money might seem challenging (if they assume you cannot teach that which you do not have), but financial literacy is one of the keys to helping education “stick.” Schools and community resources such as the national Jump Start coalition can help low-income Latino parents guide children to break the low-income cycle. When Latino students see how economics are woven throughout the fabric of all we do, money and education take on a deep-er meaning. Latino students entering higher education need the mindset that money might be limited but can be managed, and that education provides more options – and money – later. Since money is a common reason Latinos do not complete college, student services are wise to go beyond administering financial aid to helping Hispanic students master financial management, too.
With the volatile international economic climate, traditional ways of money management losing ground and societies changing, Latino students need mastery over financial decisions and broad understanding of the impact those decisions will have on their lives. The Hispanic student who knows these basics and is accustomed to discussing money management is better prepared to tackle an issue that will have a critical impact on adult life, whether or not it directly involves money.
Latino students who are financially literate must view money as a means, tool or resource for getting things done, not an end in itself.For first-generation, low-income, college-bound Latinos, accumulation of money might be, at first, the main goal. Before long, though, they will realize that money in itself is not a satisfier, but that satisfaction comes from doing what you want in life, hopefully without excessive financial worry.
Bottom line: Financial literacy must be part of the complex of skills that Latino students master to prepare them to assume increasing responsibility throughout their lives. If they are to learn, live independently, raise families, lead others and defend themselves economically,they must have the know-how, confidence and sense of responsibility to assure their financial decisions are based on sound understanding of what it means to them and others, now and in the long run.