The Impact of Financial Literacy on Adult Learners

Written by Jillian Mastro, First Literacy Administrative Assistant

According to the Federal Student Aid, the term financial literacy refers to “the understanding that includes how to earn, manage, and invest money and has a critical impact on peoples’ ability to make smart choices”. There are many aspects to understanding this concept, such as taking out a loan, reading credit card statements, and saving for retirement.

Financial literacy impacts our lives heavily because we make decisions about money every single day. Unfortunately, the World Economic Forum reports that only about half of people are financially literate. For adult learners who struggle with low literacy or do not speak the language and don’t know the financial rules of the country, becoming financially literate can be even more challenging.

Literacy is crucial for understanding the differences in how any economic system works. Imagine needing to open a bank account or wanting to take out a loan but you are unable to read the forms presented to you. There are many challenges to obtaining financial stability when coming to a new country and not having the sufficient English language skills may make it feel impossible. And for native born adult learners who fell through the cracks and never learned how to read, understanding and managing finances may feel hopeless at times.

Building Financial Literacy

Financial literacy gives people the freedom to make responsible decisions and to mitigate risks or consequences. Nilan Jayasinghe is on First Literacy’s Board of Directors and is the Global Head of Implementation at John Hancock Investment Management. Nilan has worked in finance for over 20 years and has taught at a financial literacy workshop for First Literacy scholars. Barbara Garner is retired from a 30-year long fulfilling career in adult literacy in Massachusetts and internationally.  She has taught financial literacy to immigrants and native-born Americans as part of the Boston adult diploma program. She is passionate about encouraging financial independence.

We recently spoke with Nilan and Barbara who shared their insights about financial literacy and how adult learners and English language learners can improve their understanding of finance.

Why is financial literacy important?

Nilan: Financial literacy in many ways is as important as communicative literacy.  The modern world demands at least a basic knowledge of how mortgages, interest rates, credit cards, etc. work.  It truly is the key to survival.  One could make all the money in the world, but not knowing how to manage it effectively will only end up hurting you and your loved ones in the long run.  And worse still, you could be taken advantage of.  Most people throw their hands up in the air when the term ‘budget’ or ‘money’ is even brought up.  That is not good enough. We have to come to terms with it and understand it.

Barbara: The simplest answer to that question is that money can cause huge stress. The more you know about how to manage your money, whatever your income may be, the less stress you’ll have about finances.

What unique challenges are there for adult learners who struggle with low literacy or are learning English?

Nilan: The key to financial literacy is learning the jargon, and there is a lot of it, and some of it quite technical. Therefore, it is quite obvious why someone learning English would also have trouble with financial literacy.

Barbara: Building your financial literacy is a never-ending process for everyone, because income changes, financial products change, financial needs change. Those who struggle with literacy or are learning English have additional challenges.  The language used in many of the documents issued by financial institutions, such as banks, mortgage companies, and university financial aid offices, is dense and uses vocabulary that might be new to the reader.

What are some good financial literacy resources for those who are looking to improve their financial literacy?

Nilan: There are plenty of “intro to”-type videos on YouTube explaining financial literacy.  You can even find them in your native language. Perhaps master or understand financial literacy in your native language first and then the principles become easier in English.  Just start with basic budgeting and spreadsheets, there are tons of videos in this space.  Some organizations, such as the Chartered Financial Analyst (CFA) society of Boston even run free workshops/seminars.

Barbara: Two online resources that jump out: Khan Academy, which has a financial literacy course, and Better Money Habits from Bank of America. The Bank of America resources are in English and Spanish. You have to pick through them carefully to find videos appropriate for adult learners; I found those done in black and white drawings to be very useful. I pre-taught the relevant vocabulary and big concepts, then showed the video twice. The first time through I let it run, then reviewed the key concepts. The second time I stopped it and asked comprehension questions along the way. There are lots more financial literacy websites and materials, it’s just a question of finding the ones that will work best for your students.

What can adult educators do to help adult learners improve their financial literacy?

Nilan: Introduce basic financial concepts into the English language learning curriculum.  At least it plants a seed and gets people thinking about it.  At the very least, it should be mentioned alongside the English language learning and the importance of it.  Success in a new country depends not just on being able to communicate, but also to be able to save as much of your hard earned money as possible.

Barbara: Adult education programs can offer financial literacy courses; they can build units on financial literacy into ESOL, Adult Basic Education, and GED and HiSet preparation courses. Incorporating financial literacy concepts into math classes is easy: budgeting, the concept of compound interest, comparing credit card offers, there’s so much there that lends itself to math class.  And, as I found teaching a full semester financial literacy course to adult learners at JVS for five years, the topic was hugely popular.  

Empowering A Future of Financial Success

Mastering money and gaining financial literacy takes time but will pay dividends in the future. At First Literacy we are focused on serving adult learners who struggle with low literacy and those who are learning English.

Literacy impacts everything, including an individual’s ability to manage their own finances effectively and independently. Through financial literacy workshops for scholars and free tools and resources for adult educators, we strive to improve financial literacy for individuals in the communities we serve.