One of the most difficult tasks involved in leading the unbanked and underbanked into new relationships with banking institutions, is getting them to set aside the myths, fears, and anxieties — many of which are generationally taught. To calm those fears, D.C.’s Department of Insurance, Securities and Banking, regularly engages with young people to reach them before those family lessons take root.
“Often, we find that people mistrust banks and aren’t sure about them. Or they believe that don’t have enough money to have a bank account and be able to go out and do the transactions they need so they rely on nontraditional money sources and transactions like money transmitters and check cashers,” Stephen C. Taylor, D.C. Department of Insurance, Securities, and Banking told the Informer at a Financial Literacy Day at H.D. Woodson High School. “These alternative routes, cost consumers about $800 per year trying to access their own money and there are issues surrounding safety when you’re walking around with money in your pocket rather than having it in a savings account.”
Taylor said that programs, like Bank on DC work to reduce the number of unbanked (those without any accounts) and underbanked (those with some type of account but still rely on nontraditional money services) by easing them into banking. In some instances, this means providing free or low-cost bank account to those who cannot afford the fees or aiding those who have had previous problems with bank accounts to establish second chance accounts.
The program at H.D. Woodson used performing group The Reminders to bring the message to young adults, who Taylor said are often encouraged through peer pressure to spend money on the latest trends with little regard to saving.
“We’re here at H.D. Woodson, with the Mayor’s Pathways to the Middle-Class agenda and economic inclusion to ensure everyone has a fair shot. This program is geared towards 11th and 12th graders so these young adults start learning about good financial hygiene, about saving money and making budgets,” Taylor said. “They will begin to see that they don’t have to have the latest smartphone and begin looking towards the future by learning to pay themselves first.”
Linda Easley Stroman, Founder and Owner of Lasting Change Life Coaching, LLC, told the Informer that one of the biggest challenges to good financial hygiene is self-image.
“Our self-image or the way we allow others to see us and tell us how we are, encourages us to dress up the outside rather than taking care of the inside or infrastructure. We do not embrace wellness overall, which includes financial health,” Stroman said. “It’s all connected. If we’re well financially, we tend to be on our way to being well physically, mentally, and nutritionally.”
Stroman, who took part in the Woodson High program with Bank on DC, said that African Americans tend to make others rich rather than trying to figure out how to do for ourselves. This would include creating multiple streams of income, investing, and taking time to learn how best to secure our futures through delayed gratification.
“Delayed gratification is something we really have to work on because it gives a clearer picture of what we want and why we want it. Do we want things for the wrong reasons? When you have to wait and work towards getting those things, you can sometimes determine, it really isn’t of value,” Stroman said. “We have to get a point where we begin shifting behaviors, doing a bit of tweaking and seeing how banking and investing can benefit us.”
The Department of Insurance, Securities and Banking (DISB) partnered with H.D. Woodson High School and Funding the Future to hold the financial literacy event for District students in grades 11 and 12. Funding the Future (www.fundingthefuturelive.org) is a nonprofit organization that uses live music, video and performance to engage students in an interactive financial education program. It has performed for more than 150,000 students in 500 unique venues across 34 states, promoting financial literacy.