As a child, I don’t remember having a conversation with either of my parents about finances. The handful of lessons came from watching my parents. I was seven when they bought our first home for $80,000. It was a very modest two-bedroom on a small acreage. I know my father wanted something he could pay off in a few years. He wasn’t a fan of owing money for a long period of time. I also remember him putting a huge down payment on a Custom Craft van for our annual road trips and paying it off quickly. I got the message loud and clear; mortgages are not good. I don’t know if his motivations were financial independence or lack of trust in any institution that had his money. A very poignant message was conveyed one year before Christmas when my mother used the one family credit card to fill the Christmas tree. I watched my father burn that credit card on the stove and listened to silence from my parents for three days. That was a powerful message about debt, and control. His financial approach worked from an economical perspective. He died when I was 16 years old and my family was debt-free, which helped simplify one aspect of the loss.
I only learned how to balance a checkbook in high school and my college counselor advised me right into $50,000 of school loans. I absorbed a great deal from economics courses at my very expensive private university, but the damage had been done. I was 21 years old with $50K of debt, and thank goodness I landed a good job as a chemist that afforded my $605 monthly payment.
I focus my philanthropic service on issues of women and girls. While the organizations I support see issue areas with a certain lens, I see an overall underlying epidemic that is financial literacy for women and Latinas. Traditionally Latinas grow up in and sometimes marry into a very male-dominated culture where men make the decisions about money, family and education (Karin Millard Sprow, page 50). When we aren’t educated about financial literacy or pushed towards economic empowerment we give up so much independence about the major decisions of our lives. The problem gets worse when you consider the 11 percent graduation rate of Latinos, and what the balance who took out loans and have no degrees will do to satisfy their debt.
There are other disparities that could be improved with better financial literacy, like wealth. We have all heard the statistic of “Women earning 77 cents for every dollar earned by men.” We could negotiate our salaries harder if we completely understood the impact of those earnings on our future. We have to start building wealth, which is totally different than earnings, very early in our careers. One study showed single women have a median wealth that is only 49 percent that of single men! Think about investing in a corporately-matched 401K plan and understand the need to stay at the company long enough to become vested. Beginning to save early on will also help women close the wealth gap where homeownership is concerned.
In the world of domestic violence, there is model called the Wheel of Power. It demonstrates the areas that abusers use to control their victims and keep them from leaving. One of the sections is Economic Abuse, and it is astounding how many people don’t realize abusers use this tactic. This is a much more dangerous side of the importance of financial literacy. If a woman were financially secure and economically empowered, this would be one less opportunity for an abuser to control her.
Financial literacy is crucial for women and especially those from underserved cultures. Lack of knowledge is a cycle we can break for ourselves and share with our children. It is not the cure for everything that is wrong in the world, or everything women may be up against, but I believe it certainly offers very important security and options.
The key: Invite a girlfriend to attend a seminar on financial literacy. There are a lot of different topics you can learn about through community organizations or federal programs. You will build your personal network and financial future all at once!
Trina M. Fresco, Vice President of Operations for the IT firm smarTECHS.net since 2007 and NBCLatino Contributor, was named one of “50 Powerful Minority Women in Business” by MEA Magazine. Fresco is the Chair of the Chicago Foundation for Women Investment Subcommittee and serves on a number of additional boards & committees. Fresco resides Chicago with her husband, George and their three children Sofia, Giana and Lorenzo. You can contact her at FrescoRealTalk@gmail.com or on Twitter @trinafresco.