September 18, 2020

Closing the financial literacy gap

In our country, car ownership has historically been a mark of achievement, independence and excitement, as well as a necessity of daily living for millions. For many, it’s a source of pride and a conduit to a better life. Someone with a car can pursue higher education outside their own neighborhood. Someone with a car doesn’t have to rely on limited mass transit to get to a well-paying job.

But responsibly acquiring a vehicle requires financial management skills, including understanding your credit and buying power, contract terminology and budgeting. I am grateful my parents taught me how to build my credit and maintain a checking account. I’m also grateful I was born into a family that had the means to put me on a path to build a career.

My experience, however, isn’t shared by many Americans. As an executive leader for GM Financial, I echo General Motors and GM Financial leaders who say it’s time to push forward and provide focused help for those left behind.

A large collection of research has been published over the past decade, showing clear financial literacy gaps for vulnerable communities. A study in 2019 by the TIAA Institute and George Washington University School of Business reported that African-American respondents scored lower overall to questions on core financial literacy topics than their white counterparts (38 percent correct vs. 55 percent).

Increasing financial literacy in underserved communities will not fully erase nor fix the damage caused by decades of inequity and systemic discrimination. However, expanding access to financial education, information and resources is a small yet critical way we can help.

I share some of GM Financial’s ideas here not for a pat on the back, but in the hope that other organizations in a position to help will be inspired to have those thought-provoking conversations and build upon these initiatives.

  • Our KEYS financial literacy program has been expanded with robust tutorials offered online and outreach programs in underserved communities. We’ve also provided various schools serving students of color with financial literacy lessons.
  • We’ve made recruiting a diverse work force, cultivating diverse leadership and improving inclusion a companywide focus.
  • We want our employee base to reflect our customer base at all levels of the organization. And we formed diversity councils and employee resource groups to educate each other about the differences and commonalities that we have, and how to leverage those differences as strengths.
  • We are working to source talent by building engagement with historically Black colleges and universities. These initial engagements will include dedicated internship roles for HBCU students, financial literacy training sessions, and a more robust presence at career and job fairs.

Owning a car is a part of the American Dream. So let’s work together to support equitable financial literacy education access for more Americans. And let’s start now. We all will benefit.