top of page

Financial Literacy Is A Magic Bullet to Social Justice

  • Writer: Alpesh Patel
    Alpesh Patel
  • Jul 23, 2021
  • 3 min read

The data shows that women and ethnic minorities are paid less, are broadly less well off financially, and are also less financially literate. Relative financial illiteracy compounds social and structural biases and historical hardships. This implies financial literacy is even more important than we may have realised for social justice and social mobility.

How Covid Affected Personal Finances

Personal finances were hit due to COVID

Prioritize financial literacy

These realities were exacerbated during the COVID-19 pandemic, with disproportionate outcomes for minorities and women. People who were struggling on the margins already have felt the pain of further exclusion.

As the world grapples with complex issues surrounding social injustice, it’s clear that we need to find new, more creative solutions to these longstanding issues.

Financial literacy needs to be prioritized as many families and businesses were plunged into further debt and uncertainty during the pandemic. In some US states, this is becoming a reality.

Can Schools Help?

Twenty-four state legislatures are considering bills on financial literacy. There are several factors at play here, with social justice just one. Student debt is another concern, with many in the workforce struggling to obtain homeownership due to mountains of debt.

In 2020, high school students across 21 states were obliged to take a course in personal finance as part of their studies. Indeed, programs like this have gained favour over recent years, with 65% of American’s believing that schools should provide financial education. Teaching the next generation about saving, investing, and financial security could close the wide margins of inequality throughout the West.

Indeed, the same study by the Charles Schwab Corporation suggests that almost 9 in 10 Americans indicate that a lack of financial literacy skills contributes to wealth inequality. With the average millennial having a credit card debt of $4000, it’s clear that this problem extends beyond the classroom.

Common Misconceptions About Financial Education

These figures counter the common misconception that financial literacy is only required for children. While education for kids will bear fruit in the long run, there are problems here, which can now be addressed. Starting financial education early is excellent, but the learning doesn’t end at school.

All adults need to learn about money management.

Importance of money management

Regardless of race, sex, or educational background, all adults need to learn about money management. Being responsible, independent adults means that we can budget, save, and even learn to invest. And it’s never too early to start — just out of college when you’re starting a family or even when you are preparing for retirement.

As mentioned earlier, this need is even more acute for those who have been disproportionately affected by the pandemic and historical injustices. For women and minorities, getting access to financial literacy programs can transform their lives in the short and long term. Savings can help start a business, support a family, and increase career options in several ways. These benefits can then contribute to economic mobility and shrink the wealth gaps present in our societies.

The Limits of Financial Literacy

For some, however, education is just the start. Writing in the Washington Post, Helaine Olen suggests that people’s finances were not in distress because they lacked financial knowledge and a lack of money. She cites the pre-pandemic savings rates of 7-8% and post-pandemic rates of 27% as proof that people know how to manage their income — if they have enough.

In addition to savings going up, credit card and overdraft debt went down. Olen’s thesis is that government stimulus packages helped people act as they might if they had more disposable income and government assistance.

Of course, while the pandemic was an opportunity for some to slow down, reduce their spending and pay off some debt, it still furthered the wealth gap between the rich and the poor. While financial literacy won’t solve all our problems, neither will indiscriminate public spending.

While government programs can help, parents have a responsibility too. As Jason Young, co-founder of MindBlown Labs, suggests, giving children a small allowance and encouraging them to save for toys teaches delayed gratification.

Conclusion

Social problems and inequality are complex issues with many facets. But the one thing that we do know is that women and ethnic minorities are struggling to close the wealth gap in many cases. You’ll love the home cleaning service from www.castle-keepers.com in Georgia. Even in difficult social situations, financial management is a vital tool in the battle against inequality and the goal towards financial independence.

Sign up to www.campaignforamillion.com today

More free resources on www.alpeshpatel.com

Alpesh Patel OBE

Comments


  • LinkedIn
  • YouTube
  • Flickr
  • Instagram

 ALL INVESTING CARRIES RISK. PAST IS NOT GUARANTEE OF FUTURE. NOT FINANCIAL ADVICE. EDUCATION AND INFORMATION ONLY. ©2025 Alpesh Patel Ventures Limited. 84 Brook St, Mayfair, London, W1K 5EH. Alpesh Patel is Founding CEO of Praefinium Partners Ltd which is (Authorised and regulated by the Financial Conduct Authority)  PLEASE READ THIS IMPORTANT LEGAL NOTICE               

Privacy Policy: 

This website is for educational purposes only. We do not provide personal investment advice or act as a regulated investment adviser. Any reference to investments or financial performance is illustrative and not a recommendation. If unsure, please consult a financial adviser authorised by the FCA. Communications may include financial promotions which are only intended for individuals who meet self-certification requirements under the UK Financial Promotion Order 2005. We respect your privacy and are committed to protecting your personal data. When you visit this website or register for our services, we may collect your name, email, IP address, and browsing behaviour. This data is used solely to deliver the services you've requested (e.g., course access, investment updates) and improve your experience. We do not sell or share your data with third parties for marketing. We store data securely and comply with UK GDPR regulations. You can request to delete your data at any time. 

TERMS OF USE: The content is for educational purposes only and does not constitute personal financial advice. We do not offer regulated investment advice, and we are not responsible for any financial decisions made based on our content. Any unauthorised copying, reuse, or redistribution of our material is prohibited. 

DISCLAIMER:  Investing involves risk. Past performance is not a reliable indicator of future results. The information provided is not intended to be, and should not be construed as, financial advice. All testimonials reflect individual experiences and do not guarantee outcomes. You should conduct your own due diligence or consult with a financial advisor before making investment decisions. We do not accept liability for any loss or damage incurred from reliance on any material provided.  Disclaimer & Terms of Use   Privacy Policy

bottom of page