Home Thinking Aloud The Importance Of Financial Empowerment For Formerly Incarcerated Individuals

The Importance Of Financial Empowerment For Formerly Incarcerated Individuals

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by Trent Griffin-Braaf, CEO & Founder of Tech Valley Shuttle

Few returning citizens have the knowledge and skills to make good financial decisions while reintegrating into society after being incarcerated because kids from underserved populations usually don’t learn about finance at home. Their parents and grandparents don’t know this information themselves, so they can’t teach it, and their school districts don’t provide that sort of education, either.

Currently, many banks and credit unions approach returning citizens after their release from prison, talk about “financial wellness,” and offer $200 in credit toward starting a new bank account. But true financial wellness is only possible when people understand the fundamentals of money and can build on this solid foundation.

For this reason, financial institutions and communities should begin their education efforts much sooner and expand their curricula.

Financial ignorance is a setup for failure

Large demographic groups in the US don’t understand money and how it works. When you live in a capitalist country and lack this basic knowledge, it’s a setup for failure. That’s why it shouldn’t come as a surprise if individuals from disenfranchised or underserved communities — like returning citizens — struggle more than other parts of the population.

For instance, since many people from underrepresented communities don’t understand credit scores, interest rates, and predatory lending practices, they may make poor choices regarding credit cards and loans. According to Youth.gov, “Absent suitable consumer protection and school-based K-12 financial education, youth in low-income households as adults can fall victim to scams, high-interest rate loans, and debt.”

The solution is to provide basic financial education.

Money 101

An appropriate Money 101 course for underserved populations in general and returning citizens, in particular, would cover the origin of currency, what money is, and how it works.

Credit rebuilding programs would be especially useful, as these would help explain why credit was created, how it operates, the importance of good scores, and the additional expense of paying interest. Courses should also assess the student’s own credit in real-time and give appropriate counseling based on the findings.

In addition, students should receive help putting together an action plan that supports their goals. Armed with practical, step-by-step guidance, they could learn to budget, save, monitor their status, and track their progress.

Debt management would be another important component. By handling their existing debt more effectively, they could keep their credit utilization at an appropriate point. In some cases, they could even get things taken off their credit report.

Following the right routines for financial success

A good financial literacy course would also investigate what successful people do with their money, as well as how anyone can follow the same routines and structures. When returning citizens understand retirement planning and life insurance — not to mention world trade, the stock market, and diversified investment portfolios — they become much better prepared to succeed in their lives after prison.

This kind of education would help individuals elevate themselves out of poverty and attain a new position in life. When people become financially prosperous, they gain more control over their time, which is our most valuable resource. Personal wealth also brings opportunities that can turn into additional resources, as well as access to community leaders, which I consider freedom.

The community in general benefits as well, since prosperous citizens pay more in taxes and make more positive contributions to society.

Teaching a captive audience

Currently, financial institutions wait to approach people until they are released from prison, which means they miss out on a huge opportunity. People who are incarcerated do nothing but sit in jail — they are, quite literally, a captive audience.

Moreover, many incarcerated people have access to tablets with apps and educational materials. If training videos on financial matters existed, then they could watch them for hours every day, mastering these skills and bettering themselves. They also have the time to get clear about their future goals and develop a financial plan.

Imagine if a bank or credit union created a curriculum and started to put information on these tablets. They could sponsor the course, insert, their name into the materials, and promise a credit for opening a bank account with a job-offer letter. When the student returns home, guess who they’re going to bank with?

This strategy would be much more effective than attempting to compete with other financial institutions for the returning citizen market, which is why financial institutions should expand their outreach to individuals who are incarcerated. They should also include successful returning citizens like myself on their corporate boards, since we can give them an important perspective they are currently missing.

Empower people to reintegrate successfully

The current lack of financial education for underserved populations like returning citizens does little but set people up for disaster. Conversely, basic financial education empowers individuals to establish a productive life and achieve financial prosperity.

That’s why financial institutions and communities should help incarcerated individuals understand money as the first step toward their future reintegration.

 

Trent Griffin-Braaf

Trent Griffin-Braaf is the CEO & Founder of Tech Valley Shuttle and GB Logistics. He is the largest BIPOC employer in New York State and The Capital Region. As a formerly incarcerated person, he is leading the way for other employers to learn how to become an employer of choice for returning citizens, single parents, and veterans.