Maid highlights why financial literacy is so necessary
Financial literacy: what is your first reaction on seeing these two words? At a minimum, condescending, if you are not financially literate, then you must be classified as illiterate.”
I never accept that label on anyone, nor should you.
No one can negotiate life today without a basic innate understanding of how money and commerce intersect to contribute to the management of everyday life. How else could we work, earn, consume, save, raise a family, and just carry on?
Uncomfortable as it may feel, financial literacy’s moniker is meant to convey the serious mission intent that is now being given increased emphasis by thousands of organisations and national governments.
What does financial literacy really mean?
Financial problem solving?
Financial wellness is the best description from my perspective.
FinLit (financial literacy acronym) has become the new buzzword in financial and social media exposures everywhere; though, sometimes the content and focus may seem duplicative or generic.
So, what we are really talking about is upgrading one’s financial knowledge in order to become financially well.
• Incentivising reasons to learn more about how finance works
• Implementing references and sources on finding relevant topical help
• Practice in problem-solving illustrative financially precarious cases,
• Then gaining the knowledge and confidence to use real-world application processes for one’s individual and family benefits.
Was this something talked about generations ago? Probably not.
Earlier generations managed in a highly cash-concentrated economy.
Either you had the cash, or you didn’t.
Families were paid wages in cash, saved in cookie jars, had budget envelopes marked for various bills, or withdrew cash from a bank account in little brown envelopes – and then, each envelope was trekked around town, standing in line with cash to pay each monthly bill. Your author is old enough to remember being paid, at a temporary part-time job, in cash in a little brown envelope.
Hilarious to think of now. If you lost your money – so sad, too bad.
Cash-strapped families would find themselves out of luck, although old-fashioned barter sometimes saved the day.
Yes, charge credit accounts existed on an individual merchant by merchant basis, but were not backed by a retail bank or a local or global credit card issuer.
Businesses needed cash, often promoting cash sales by discounting prices.
Credit card era: buy with credit, you owe!
You never own a credit purchase until you pay off the credit card.
The temptation of buying, too often, indiscriminately across the board – on credit – and paying later, in my opinion, changed everything. People now had to learn how to manage personal debt.
The problem was, for many, it felt like free money – too easy to forget about those pesky monthly bills.
Credit cards evolved in the 1950s, first as company employee tracking conveniences, then embraced as status symbols, particularly, Diner’s Card and then American Express. Credit cards were slower to originate for regular folks, or if so, they tended to be concentrated in the upper class few.
Bermuda banks started issuing local credit cards via support from US credit card giants around 1975-1980. This is only anecdotal evidence from my professional practice, so, readers, illuminate me on this, please.
By the end of the last century 2000, global credit card use exploded, at least, in modern civilisations. Everyone, it seemed had one, or two, three, or more cards.
Everyone now had to learn to manage their cash, manage their debt, and manage their life – not so simple. Debt without a planned budget process can consume one, literally.
The message behind the financial literacy initiatives is real concern that generally, many in populations do not know enough about, have the time, the energy, or financial means to research, learn additional financial processes to make the best financial decisions for themselves and their families.
For far too many, life is simply survival – with one financial crisis away from financial disaster. These families’ ability and goal to become upwardly mobile is tenuous at best, slipping further away with any economic upheaval: job loss, inflation, sickness, accidents, Covid and more. While not everyone starts on an equal economic footing, certainly, everyone deserves a chance to be financially well.
Here is another perspective on managing with little, to no safety net.
The 2019 chronicle, Maid: Hard Work, Low Pay, and. Mother’s Will to Survive by Stephanie Land (and now a Netflix series) chronicles her struggles as a low-income mother, echoing that of thousands in the same economic circumstances. https://tinyurl.com/2p99wubp
Many of her observations are starkly vivid, depressing and certainly realistic, including these:
• Barriers to getting ahead: childcare is an absolute necessity, support access was not always easy, illness brought additional organisation and financial safety problems
• Transportation worries about an old car occurred every day – vital transport ability to get to a job. No car, no pay, budget torpedoed again
• Health issues: inexpensive rental units often came with mould, dust, cleaning, heating and safety issues while long hours of intense manual labour were physically debilitating
•She felt invisible. People working in these types of service jobs feel implicit subliminal attitudes from others, treated as poor, different, uneducated, or worst case, invisible. Certainly, she stated, “cleaning other people’s homes every day brings a whole new perspective to your own life.”
This individual was able to change her life, after being discovered as a writer, but what of so many, many others.
Can financial literacy leading to financial wellness help?
Readers, what do you think?
Maid author Stephanie Land on what it feels like to be shamed for being poor, https://tinyurl.com/2p8wp4vk
The Problem With Financial Literacy – And A Proposed Solution, https://tinyurl.com/mux9nnzv
• Martha Harris Myron, a native Bermudian with US connections, is a former qualified international financial planner, the author of The Bermuda Islander Financial Planning Primers and international financial consultant to the Olderhood Group Bermuda Ltd. She is the founder of the “Financial Literacy-Bermuda™ Initiative coming soon. Anyone interested in sharing financial experiences, and related contact email@example.com