For much, if not all its 200 years as a state, Mississippi has struggled with literacy. A lack of basic education has manifested itself in poverty, crime and below average life expectancies and health.
But the state also lags behind in another form of illiteracy that also has grave consequences.
According to a recent WalletHub survey, Mississippi ranks 47th in financial literacy.
Every study on financial habits has Mississippi at or near the very bottom,” said Mississippi Treasurer Lynn Fitch. “When it comes to poverty, we rank number one in the country. That’s not a coincidence. Financial education gives Mississippians the tools to be empowered by their money and reach their goals, including home ownership and higher education. Financial education has been one of my top priorities.”
Kathy Arinder sees the deficit every day.
As executive director of the Columbus-Lowndes County Habitat for Humanity, which assists low-income people become homeowners, Arinder said most of the people who approach her for help lack even a basic understanding of how finances work.
“I’d say for every 25 applicants, one actually is what we call mortgage-ready,” Arinder said. “They have no understanding of how money and debt work. Habitat doesn’t give people houses — we help them become homeowners, but it’s a partnership. They have to put in their sweat equity, and part of that sweat equity is getting their financial house in order. For many people we see, they don’t even know where to start.”
With that in mind, Arinder has put together a free financial literacy program called Financial Foundations. The program consists of six classes, which begin on July 18 and end on Nov. 9. While the classes are targeted to potential Habitat for Humanity clients, Arinder said they are open to the anyone on a first-come, first served basis. The deadline to register for the classes is July 13, and people can register by calling the Habitat office at 662-329-2501.
Each class is devoted to a single topic, taught by local bankers and lenders, ranging from the initial class — financial recovery — to the final class on home ownership.
What Arinder is doing may be considered a bit of foreshadowing for financial literacy training throughout the state.
When the state’s 22 affiliated Habitat for Humanity organizations meet next month, one of the big topics will be developing a uniform financial literacy training program.
“She’s a step ahead of us,” said Starkville Area Habitat for Humanity director Joel Downey of Arinder. “Hopefully, in the next year we will have a Vista Volunteer worker to help us with this sort of training, Right now, we send our clients to the Mississippi State Extension Service, which has a lot of resources.”
Becky Smith, the Extension specialist for family financial management, will take part in the statewide Habitat meeting.
“The Habitat people have reached out to me to attend their annual development conference where I hope we can start some conversations about the programs and how they work,” she said.
Smith said Extension is already well into the process of updating its financial education programs.
“It’s a different approach to financial literacy,” Smith said. “We really want to listen to the client, figure out what it is they need and then be there for them, helping them change their behaviors, how they think about finances and holding them accountable.
“It’s like the difference between just having a gym membership and having a personal trainer,” she added.
Downey, who is a certified home buyer educator and counselor, said financial literacy goes far beyond just knowledge.
“For a lot of people, they’ve just not have any experience,” he said. “I’ve heard people tell me, ‘My daddy said never borrow money.’ That might sound good to them, but today, the whole world revolves around credit. For a lot of people, there just aren’t many avenues for them because they’ve never the opportunity to make a mortgage payment or the things most of us do to establish credit.”
For Arinder, the classes may help open the door to many of the people who didn’t qualify for a Habitat home previously.
“That’s the whole thing,” she said. “If we are not able to help them now, I’m hoping that once they go through this program and get their financial house in order, they can re-apply and be approved. That’s the outcome we want with everyone who walks through the door.”
Slim Smith is a columnist and feature writer for The Dispatch. His email address is [email protected]