1. Linking Financial Literacy and Social Justice Peter A. Kindle, MSW
Social Welfare Action Alliance, New Orleans, LA, June 17, 2007

2. FDIC Facts1 28 million are unbanked in US.
44.7 million are underbanked.
40 million households have no current relationship with a financial institution.
They have $1.1 trillion in annual earnings.
They spend $10.9 billion in the alternative financial services sector each year.

3. Solution: Financial Literacy?
“the ability to make informed judgements and to take effective decisions regarding the use and management of money”2 (1992).

4. What’s Being Done?
Organization for Economic Co-operation and Development:3
G8 International Conference on Improving Financial Literacy, Nov 29-30, 2006.
“Improving Financial Literacy: Analysis of Issues and Policies” (2005).
National Government Organizations

5. What’s Being Done?
Financial Literacy and Education Commission (US Treasury, 2003):
Improve financial literacy and education.
Alliance for Economic Inclusion (FDIC, 2007):
Improve access to banking services.
Develop innovative, low cost services.
Expand financial education efforts.
Internal Revenue Service:
EITC awareness and education.
Volunteer Income Tax Assistance (VITA) sites.
Individual Development Accounts (IDAs).

6. Forces at Work Demography: Aging 1st World.4
Technology: Complexity and capability.5
“Southernization” of US.6
“Great Risk Shift”.7

7. Technology Benefits Increased access to information.
Targeted marketing.
Improved underwriting.
Increased competitiveness.
Costs
Rampant consumerism.
Confusion and complexity overload.
Shift of risk to consumer.

8. “Southernization” Losers Low wages. Regressive taxation.
Pro-immigration.
Anti-union.
Winners
Commodity traders.
Professional elite.
Investors.
Global capital markets.

9. Great Risk Shift Income instability. Structural changes in employment.
Necessity of two incomes.
Health costs shifted to worker.
Conversion of defined benefit to defined contribution retirement plans.
(Escalating tuitions).

10. False Assumption: Empowerment
Improved Social Outcomes
Enhanced Financial Literacy
Information and
Financial Education

11. Critiques of Financial Literacy
Top-down operationalization.8
Decontextualization.9

12. Top Down Standards10 Personal Decision Making Earning a Living
Managing Finances and Budgeting
Saving and Investing
Buying Goods and Services
Banking
Using Credit
Protecting Against Risk

13. Sample Questions
You do not need to record ATM withdrawals and deposits in your checkbook.
Using credit is a good way to pay overdue bills.
You should save three or more months of living expenses before you begin investing.
Investments are usually less risky than savings accounts.
Currency exchanges usually charge less than banks for cashing checks.
If you get health insurance through your job, you can pay to continue your health insurance for at least 18 months when you lose your job.

14. Earning a Living Fringe Economy11
You must owe income taxes in order to receive the Earned Income Tax Credit?
You can use TANF benefits if you receive the EITC?
Mainstream Economy12
If you went to college and earned a 4-year degree, how much more money could you expect to earn than if you only had a high school diploma?

15. Buying Goods & Services
Fringe Economy11
Rapid refund services usually charge a higher fee for preparing your tax returns than government and community programs do.
Door-to-door salesmen have the best deals on insurance.
Buying an item through rent-to-own plans usually costs less overall than buying the same items with a bank loan.
Mainstream Economy12
Under which of the following circumstances would it be financially beneficial to you to borrow money to by something now and repay it with future income?
When clothes go on sale.
When you need to buy a car to get a much better job.
When you really need a week’s vacation.

16. Using Credit Fringe Economy11
Creditors sometimes will reduce your minimum payments or interest if you talk with them.
Payday loans usually have low interest rates.
Paying all bills on time is the best way to establish good credit.
Mainstream Economy12
Which of the following statements is true?
Your bad loan payment record with one bank will not be considered if your apply to another bank for a loan.
If you missed a payment more than 2 years ago, it cannot be considered in a loan decision.
Banks share credit history of their borrowers and are likely to know of any loan payments that you have missed.

17. Top Down Irrelevance Personal financial planning
Applies small business model.
Presumes access to financial mainstream.
Ignores social services “safety net.”
Fails to address survival skills.
Consumer rights and protections
Failures of regulation.
Failures of information disclosure.

18. Financial Literacy is
“the ability to make informed judgements and to take effective decisions regarding the use and management of money”2 (1992).

19. Decontextulization Confidence Social Services Adult Learning Access
In-Kind Assistance
Experience
Financial
Literacy
Stress / Threats
Comfort / Control
Financial Resilience
Risk
Skills
Goals
Social Supports

20. Financial Literacy Reconceptualized
Index, not latent variable.13
Strengths-based focus.
$300 / week skill set.
“Working the system.”
Consumption by “default.”
Balance of power and control.14
Hidden costs of mainstream economy.
“Dysfunction” as adaptive coping.

21. Implications for Social Work
Public Square
Curricula
Self-Reflection

22. Footnotes
1. Retrieved June 15, 2007 from Alliance for Economic Inclusion website.
2. Noctor, M., Stoney, S., & Stradling, R. (1992). Financial literacy: A discussion of concepts and competencies of financial literacy and opportunities for is introduction into young people’s learning. Report prepared for the National Westminister Bank, National Foundation for Education Research, London, UK.
3. Retrieved June 15, 2007 from OECD website.
4. Organization for Economic Co-operation and Development. (2005). Improving financial literacy: Analysis of issues and policies. Paris: Author.
5. Braunstein, S., & Welch, C. (2002). Financial literacy: An overview of practice, research, and policy. Federal Reserve Bulletin, 88,
6. Lind, M. (2005). Conservative elites and the counterrevolution against the New Deal. In S. Fraser & G. Gerstle (Eds.), Ruling America: A history of wealth and power in a democracy. Cambridge, MA: Harvard University Press.
7. Hacker, J. S. (2006). The great risk shift: The assault on American jobs, families, health care, and retirement and how you can fight back. New York: Oxford University Press.

23. Footnotes
8. Bond, M. (2000). Understanding the benefits/wages connection: Financial literacy for citizenship in a risk society [Electronic version]. Studies in the Education of Adults, 32(1),
9. Mason, C. L. J., & Wilson, R. M. S. (2000, November). Conceptualizing financial literacy (Business School Research Series Paper No. 2000: 7). Leicestershire, UK: Loughborough University.
10. Gayton, J. (2005). Cross-referencing national standards in personal finance for business education with national standards for personal finance education. The Delta Pi Epsilon Journal, 47(1),
11. Anderson, S., Scott, J., & Zhan, M. (2004, June). Financial links for low-income people (FLLIP): Final evaluation report. Retrieved December 28, 2006 from the Sargent Shriver National Center on Poverty Law website:

24. Footnotes Questions or Comments peter.kindle@yahoo.com
12. Jump$tart Coalition for Personal Financial Literacy (Jump$tart). (2006, April 5) survey of financial literacy among high school students (with stats and answers). Retrieved January 3, 2007 from
13. Fogarty, G., & MacCarthy, K. (2006, September). Financial literacy: A psychologist’s perspective on an emerging societal problem in Australia. In M. Katsikitis (Ed.), Proceedings of the 2006 Joint Conference of the APS and NZPsS (pp ). Aucklund, New Zealand.
14. Kindle, P. A. (2006). Assessing power and control differentials: Understanding dysfunctional agency from the client’s perspective. Journal of Human Behavior in the Social Environment, 14(3),
Questions or Comments