We’ve all been there, Googling “how to get a car loan” or “how to refinance a mortgage” or “how to climb out of credit card debt.” And we all know that finding a trustworthy resource among pages and pages of Google results is a lost cause.
What if there was an unbiased source of streamlined, educational information, all in one place? Enter the Native American Financial Services Association’s (NAFSA) Financial Literacy Program.
It may sound serious, but it’s incredibly accessible and digestible. It can even be fun. And while you may want to pull the covers over your head and ignore that glaring debt or the need to save for retirement, it’s not going to go away until you face it head on.
“With this program, we’re really just trying to demystify finances. I think it gives you a starting point,” said Mika Leonard, NAFSA’s chief operations officer (COO) and a member of the Miami Tribe of Oklahoma. “It’s a great tool as you go through different phases in your life. It’s extremely comprehensive and less threatening than Googling. It’s a great, basic starting point for individuals who want to know more about their finances.”
So many people weren’t taught financial literacy growing up. “I was never sat down in a classroom and shown these type of [financial] modules,” shared Olivia Hoff, Digital Marketing Manager at NAFSA. “A person of any age can sit down and watch these and get a good knowledge base for moving forward.”
NAFSA’s modules are easy to use, or bite-size, if you will. Interactive tools allow users to enter the amount of debt they want to pay off over a certain period of time, and it will tell them how much they need to save.”
Native Business Magazine spoke with NAFSA executives about each of the six playlists in NAFSA’s Financial Literacy Program.
The Business 101 playlist is a phenomenal module to “roll through one by one,” said Leonard. Nothing contained in this series will be information that an emerging or new business owner wouldn’t find useful, she said.
The Business 101 series provides the tools you need to build and maintain credit, develop a business plan, and advance your current project. For instance, the playlist breaks down short-term and long-term financing options. Lines of credit and business credit cards are the two primary options for short-term financing. For large purchases that take a longer time to pull off, the playlist recommends term-loans and explains the collateral required, or unsecured loans available to customers with strong credit history.
The other route to take is commercial real estate loans, secured by real estate collateral, such as an office building or piece of land.
“I think Native Americans have always been entrepreneurs in one way, shape or form. I think the idea of sole proprietorship, entrepreneurship and having your own business really resonates for a lot of people, whether they have a specific type of artistic skill or trade. For a lot of people, owning and managing their own business is a dream. But as we know, there are steps you have to take to be successful. Being good at your craft isn’t enough,” Leonard said. “I think this playlist does a really good job at giving you those core foundational items—things you would need to do before you even approached a bank about getting a loan. If you don’t already work in the financial services industry, all of the features as they relate to banking are not things just anybody would know. They’re not that easy to navigate. We don’t want folks to walk into a bank and not feel like they have the information they need. I think this playlist is really great, and there’s fantastic information for anyone thinking of starting a business. I think for people that are looking to expand their business, our section of obtaining and using credit is really helpful.”
Gaining sovereignty over your personal finances can transform your life. Yet the process can be daunting. NAFSA’s Finances 101 series helps users create a budget; and learn the ins and outs of savings and checking accounts, credit cards, as well as explore mobile payment options, and more.
“I think that the Finances 101 is probably one of our most important tools. I think finances can be really scary, particularly if you don’t understand them,” Leonard said. “People don’t discuss finances, even with parents or relatives. It’s a difficult conversation. And parents may not have all the answers. A lot of people don’t have that support group around them. Young people, I think especially, don’t really understand credit card debt or student loan debt. Having a module where they can understand what credit cards are, why you need to not just meet the minimum payment, but why you should pay off your credit card every month just because of the interest rates… I don’t think that’s intuitive, and I don’t think the average person knows that.”
Olivia Hoff drilled home the fact that the banking industry is modernized, and a digital financial literacy tool is a great component to that. “I was thinking the other day about how people used to balance their checkbooks, and no one that I know of does that anymore. It’s all on my phone, through apps. I’m paying my credit card off through an app. I’m looking at my banking account through an app. Banking isn’t behind the times anymore, “ Hoff said.
NAFSA executives agree that understanding credit cards is one of the most potent focuses within the Finances 101 playlist. Too often, young people fall into a debt trap, because they’re receiving credit card offers with confusing disclaimers.
“You think about the amount of paperwork you get with credit card statements, all in fine print. It’s clearly written for a lawyer, and it’s really hard to understand. It’s easy to think — I’m swiping this card, and not knowing where that money is. It’s borrowed funds. I think it’s important for people to understand what interest is, how interest is calculated, and how your interest can suddenly jump by missing a payment even by a day — how much your interest can go up overnight and put people into really detrimental situations at 18 or 19 years old. Again, we want to have financially educated young people who won’t be spending their adult life paying off a credit card that they opened when they were 18 or 19,” Leonard said.
Major Life Decisions
Where does one turn for straight-forward, unbiased information about obtaining a car loan, buying a first home, or refinancing a mortgage? NAFSA’s tool on Major Life Decisions offers a great introduction to what might seem like a big step in life.
Leonard said: “Often when we search for answers online, where most of us go for information — because of ad words and how savvy all the digital marketers have gotten, we are so frequently getting ads that may not necessarily be providing us with a base of information, which is what we want.”
This playlist delivers quick and easy information, and handy calculators allow visitors to enter exact numbers to better inform their financial decisions. “This is about: Am I going to be comfortable paying this monthly amount for 30 years? Having some hard numbers in front of you is really helpful. Much like our other tools, this allows people to then go to their financial institution with informed questions, specific questions, thus making them a more informed consumer, and that’s ultimately what we want,” Leonard said.
Looking Into the Future
NAFSA’s Looking Into the Future playlist goes in-depth across topics. Visitors have the option to click on subject matters of personal interest — from planning for retirement, to managing your investments and collecting social security, to much more. These areas are often topics people want to avoid. They might be seen as taboo, or people don’t want to admit they’ll get older.
“The fact of the matter is, we’re living longer, we’re working longer, and people are needing more and more money saved in order to comfortably retire,” Leonard emphasized.
She continued: “This is a place they can go on their own, look at the information, and then basically dig deeper if they want to, having some of the terminology and understanding some of the initial nomenclature. …I think this is about helping folks be mindful of the kinds of things they will need to consider at some point in their life.”
After all, financial logistics are confusing. “Let’s face it. You would really have to be a professional in one of these settings to understand all of this. We want to give people a place where they can take the information in on their own time, at their own pace, in their own home, and not feel completely overwhelmed by it,” Leonard said.
The calculators are a great resource to reference throughout one’s journey. Visitors can continue to plug in their numbers and adjust one’s lifestyle in accordance with a raise or new financial obligation.
Protecting Our Elders
Sometimes, the need to care-take can feel “all of a sudden,” but it really shouldn’t be that way, because aging is inevitable. Rather, planning to hire a caregiver or become a caregiver can look like an active decision. This module provides frank conversations you need to ask family members. For instance, elder fraud is something people need to talk to their grandparent or parent or loved one about, although that can be a difficult conversation.
When hiring and saving for a caregiver, it’s important to find someone that meets your specific needs. When becoming a caregiver, it’s critical to understand legal caregiver roles and how to plan ahead.
“I think, especially in Native American, Indian Country communities, family and taking care of elders are a huge deal and engraved in the culture. Planning for that, not only mentally and physically but also financially, with your support group, and deciding how you’re going to proceed with that, is extremely important,” Leonard emphasized.
Youth Financial Toolkit
The Youth Financial Toolkit help young Native people navigate the murky waters of banking basics, credit, saving for higher education and more. Developing good financial habits during youth is vital to long-term financial health.
It’s important to recognize that it’s never too early or too late to begin growing or repairing one’s relationship to one’s finances. “If you ask any financial expert, they’re always going to say, ‘start now,’” Leonard said. “The banking basics is one of my favorites, and also saving for higher education, because many people, their parents aren’t going to pay for college. They need to think about how much they can save, how much they can take out in loans, and how they’re going to use that credit and those basics wisely going forward. As we mentioned, the decisions you make while you’re young can have a long-lasting impact on your finances and your credit. Just going over these can make a big impact on the future,” Leonard said.
Learn more about NAFSA’s Financial Literacy Program at nafsa.everfi-next.net.
Digital Financial Literacy Program
NAFSA launched its Digital Financial Literacy Program in September. Through this program, we provide financial literacy modules with easy-to-understand information to help people better understand their finances and make more informed decisions. To complement this program, NAFSA is offering tips, information, and news related to financial literacy in blog posts.
Here is one blog post by NAFSA that delivers guidance on how to use credit cards wisely: Credit cards are a great financial tool for people and offer many freedoms. While using a credit card, it is important to be aware of the potential risks and benefits. Every time you use your credit card to make a purchase, you essentially borrow the money from your credit card company. Typically you must pay the company back, partially or entirely, the following month.
- Building Credit – Using and paying off the balance on your credit card will build your credit history and help improve your credit score.
- Convenience – You can purchase an item and pay for an item later or over time.
- Protection – Many credit cards provide protection plans from fraudulent purchases if your card is stolen or compromised.
- Diminished Credit – Missed payments or late bills can severely damage your credit history.
- Interest – If you carry a balance on your credit card past the due date, you could pay interest on the amount borrowed.
- Too Easy – The ease of purchasing could lead to increased impulse-buying and irresponsible purchases.
Paying the Minimum – As NAFSA has mentioned, a perk of having a credit card is the ability to purchase bigger ticket items and pay for them over time. Many people only pay the minimum balance on their credit card, or some amount lower than the total, to eventually pay back the full balance when they are able. While paying the minimum can be convenient, it’s smart to consider the total cost of your purchase if you pay over time. Credit card companies can charge high interest rates which only compound with time.