Financial Literacy Month: Spotlight on Women's Money Matters

April is financial literacy month, but what does financial literacy mean exactly??

• Financial literacy, education, or knowledge is often thought of as “what you know” about your finances - for instance, ‘what is a good credit utilization rate?’ or ‘what factors impact my credit score?’ or ‘what scams should I look out for?’ Ideally, once you know more about how your finances work, you are then in a position to make better financial decisions, which would be an improved financial capability.?
• Financial capability?can be thought of as “what you do” with your finances - for instance saving in a financial institution vs. under your mattress or not maxing out a high interest-rate credit card.?
• Financial wellness, health, or resiliency would be the ultimate goal on this spectrum and this can be described as “how you are” financially - for instance, do you feel less stressed about your finances, and are you confident in your ability to pay your bills on time, cover an unexpected expense or loss of income, or save for a bigger ticket item. It’s that “I’ve got this!” feeling.?

Increasingly, there is a recognition that regardless of what it is called, we should be wary of any efforts that put too much onus on individuals, especially those from economically disadvantaged backgrounds, to “bootstrap” themselves out of poverty without working to make financial institutions more accessible.?

At Women’s Money Matters -- a MA-based nonprofit that works to improve the financial wellness and resiliency of women and girls living on low incomes --?we see every day all the ways the financial game is stacked against households operating on lower incomes. We strongly believe that systemic changes -- such as equal pay, paid family leave, and policies that reduce the impact of "cliff effect" -- are much-needed structural changes that can help women advance economically.?

Sadly, progress can be slow for fixing the systemic issues that disproportionately impact women, especially women of color. At our current pace, the pre-Covid estimate was that it will take 257 years to achieve economic gender parity—and that was before Covid set women back to 1988 levels of workforce participation.??

We see value in both advocating for a faster pace of change for economic gender parity, while also fostering a better understanding of how the current financial system works. We see that?combining greater financial knowledge with specific goal-setting, a peer support group, and individual mentoring can increase a woman’s confidence and ability to improve their financial security.?

Financial literacy alone may not be enough to improve financial wellness but with the proper support mechanisms - mainly peer and coaching support and accountability - financial literacy is a step on the ladder to greater financial capability, which leads to overall improved financial health and wellness over time. We work hard in our programs to reach clients where they are and help them move forward as they can.?

We started Women’s Money Matters on the premise that everyone deserves a bright financial future and someone in their corner helping them to achieve their financial goals. Unfortunately, schools do not always have the capacity to fully prepare students for the decisions they will face in an increasingly complex marketplace. Many people also find it hard to get this education from caregivers, especially as the financial world becomes more mobile and cashless. Immigrants arriving from countries with very different economic systems may have no one to explain how the American system works.?

Strong financial acumen is especially important for women who may be socialized differently when it comes to career opportunities and discussing finances. We believe that knowledge is power and work to ensure women have both a strong financial education and a support network that can help them?feel in control of their finances. Without being in the driver's seat of their financial circumstances, we see too many women feel stuck in bad situations.???

We are proud that the portion of our graduates who feel confident about managing money rises from an average 24% to 69% over three to six months. The portion who put money into savings rises from 27% to 73%, and initial results show an average increase of 12 points in participants’ overall financial health (as measured by CFPB Financial Wellness Scores ). These are important accomplishments that make it possible for women to move forward and reach their goals. The results also speak to the strong dedication of our clients and their volunteer coaches.?

We hope that structural changes happen with due haste. In the meantime, we will continue to offer women who are living on the economic margins the knowledge and support they need to navigate today’s unequal financial landscape.