New Article: Building Wealth in the Latino Community

Posted by on April 28, 2006

[posted from AssetBuilding.org]

Financial Counseling: A Meaningful Strategy for Building Wealth in the Latino Community (pdf)
Beatriz Ibarra, National Council of La Raza
December 15, 2005

http://www.nclr.org/content/publications/download/35644

INTRODUCTION
In recent years, the goal of increasing the nation?s collective financial literacy has gained prominence among policy-makers. In May 2005, President Bush introduced a new initiative to improve financial literacy in the Hispanic community. Earlier this year, members of Congress passed legislation to designate April as Financial Literacy Month. Others have proposed legislation that would create broad-based financial literacy programs in schools and in the workplace. These efforts stem from several underlying factors. For instance, some lawmakers have sought to advance policy measures that represent the elements of a new ownership society.

Others want to give low-income families the tools to make wise financial decisions and to understand fundamental principles of saving and investing. These financial literacy policy efforts have had limited scope and impact on low-income families. Despite the breadth of activity in this area, little has been done to provide practical financial advice and information to them in a meaningful way. Increasing financial knowledge among low-income Hispanic families is especially important given their limited experience with financial tools and the growing number of financial choices they must make. Instead of improving access to financial counseling services, efforts have resulted in the production of an arguably excessive amount of financial education materials. Ostensibly, these tools are designed to improve personal financial knowledge as well as individual financial security. Production and consumption of generic financial information, however, does not necessarily result in better financial decision-making on the part of individuals. For this reason, financial counseling is much more valuable than broad financial education in building wealth for Latinos.