Financial literacy is important in every community. At Synchrony, we’re proud to have colleagues who identify as part of Indigenous populations and share their family and cultural histories. Recently, we’ve heard that financial education is not traditionally passed down from one generation to the next. Why is this the case? The answer is complex, as there are many contributing factors.
Specifically in the American Indian and Alaska Native populations, 31% of youth live below the poverty line. And across all ages, the Native American population has the highest poverty rate of all ethnicities, at 25.4%. While not the overarching solution, one way to help improve this metric and empower Indigenous communities is to expand access to financial education.
Saving for the future is a learned skill as well as a mindset shift. By starting at a young age, children can begin to understand financial wellness. They can also have opportunities to put it into practice. As parents, you play an important role in helping ensure this happens.
Ultimately, a good relationship with finances is a key to building and sustaining strong, resilient Indigenous communities. Whether you’re living paycheck to paycheck or rolling in the dough, there are ways to build financial knowledge and prepare your family for a more stable future. By removing barriers to access to financial education and literacy, Indigenous communities can transcend systemic oppression and close the financial literacy gap. This includes understanding responsible ways to build credit, opening a savings account and learning how to build and manage a budget.
How does this work and where should you start? Let’s explore some tips and tools that can assist in building a stronger savings mindset, from the younger years on up.
1. Understand Your History and Build Forward
To build forward, start by looking behind you. It’s important to understand your cultural and familial history and their relationship to financial management.
- • How did your parents discuss finances with you when you were younger?
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- • What was your exposure to financial education?
Our employees who identify as Indigenous acknowledge that, broadly speaking, the lack of information and education on personal finances perpetuates a negative stigma, particularly around managing debt and using credit responsibly.
In the United States, Indigenous communities—as sovereign governments—are overseen by both federal laws and tribal affiliations. The unique oversight structure can complicate management, which can at times result in lack of access to a solid financial infrastructure and supports. One of our employees describes this as one reason why Indigenous communities are among the most underbanked populations in the nation. According to the Native CDFI Network, 86% of Native communities lack a single financial institution within their borders.
Economic opportunities for tribal nation communities can indeed be limited, and building a financial knowledge base may be avoided even though it’s essential to empowerment. As one of our employees put it, “You fear what you don’t understand.” In fact, he recalls very few conversations about personal fiscal management within his own family growing up. He began building financial literacy in his early 20s. It was his grandmother’s emphasis on putting a little money away at a time to build a financial nest egg for his family that helped him build savings—and generational wealth—for his family.
Learn More: Quiz: Which Savings Account is Best for You?
While conversations about saving and fiscal management may not be a norm in Indigenous communities, they aren’t completely nonexistent. Being aware of your community’s historical context and connection to finances can help jump-start a financial wellness journey for you and your family. As you start to build knowledge, you can slowly share it with your children and others in your family.
2. Be Empowered by Your Financial Journey—and Pass It Down
Understanding your finances is a great way to gain control to positively impact your family’s future. While a lack of financial literacy may be common within Indigenous communities, there are ways to seek assistance to develop your knowledge and build a strong financial foundation.
For example, the Totem app, founded by Amber Buker of the Choctaw Nation, is dedicated to building a trend of wealth generation in Indigenous communities. By including culturally relevant products and more, this fintech is one that some of our Indigenous-identifying employees have explored. The app offers access to tools and support for communities as they build stronger financial futures, all while being mindful of rich cultural history. With Totem, interchange fees are shared with the tribal government. The app also plugs in with tribal benefits programs, dramatically speeding up access to certain benefits.
Building for your financial future can vary, from diversifying your family’s financial portfolio to starting a small business within your community that can help build and generate wealth over the long term. Regardless of the path you choose, it’s always important to conduct your research while charting your course. Choose a path that best meets your needs. If that means turning a side hustle into a business, then give it a shot.
Being a small business owner can help you achieve your financial goals while investing in your community. But starting a small business within a tribal community can be expensive and difficult. For example, you must go through the tribal government rather than the state to obtain a business license. Additionally, you’ll have to adhere to federal laws once your business is in operation; you may have to connect with the Bureau of Indian Affairs to explore if any additional licenses are needed to conduct business.
3. Embrace Strategies for Saving Money
Ready to craft your financial plan? Consider these tips to help you and your family on the journey.
Build an emergency savings fund
In the event of a major life change or transition—or amid shifting economic conditions—an emergency fund can come in handy. If you haven’t yet explored this avenue, start small and build from there. For example, you can take a look at your finances, review your spending habits and work together as a family to save an initial $500 in 30 days. This can be achieved by setting either daily or weekly goals. Once you’ve hit the milestone, continue to grow your emergency fund over time.
Talk to your kids about money
It’s never too early to speak to your kids about money. Whether you’re taking a weekly trip to the grocery store together, assigning a routine allowance payment or even helping your older children learn how to create a budget, you can play a positive role in developing their relationship with money.
In their early grade school years, your kids will learn about dollars and cents. Incorporating that learning into games or tasks at home reinforces key life lessons related to money management and saving.
If you have older children, talk with them about the importance of budgeting once they’re living on their own. This can go a long way toward helping them think realistically about managing their own finances. For example, talking to them about their needs versus wants can help build financial knowledge that will serve them well in the future.
Explore today: Calculate Your Monthly Savings Goal
Consider building your legacy
Your older years open new chapters and present an opportunity for you to build a legacy. Not only does this benefit your immediate family, but it can also positively impact your broader community.
You’ll likely want to consider how to preserve and direct your estate to your family when the time comes. Discuss your estate plan with your children to prepare them for what’s to come. This includes assigning roles, dividing assets and carefully crafting how the future years will impact the continued growth and sustainability of your family. For some of our employees that identify as part of the Indigenous population, these conversations happen routinely. Older parents are making preparations and discussing their wishes for the future with their elder children to preserve the familial legacy.
4. Explore Resources that Can Help
Balancing a rich cultural history and building a strong financial foundation is possible in the Indigenous community. Take it one step at a time. With a proper understanding of your family’s financial history and tools that can help you build for tomorrow, you will be well equipped to set a solid path forward.
Take time to explore available savings products, such as certificates of deposit, high yield savings accounts and money market accounts—each can be part of your financial plan. Moving forward and learning together as a family can be both fun and rewarding. Building generational wealth starts with comprehensive conversations about the financial basics and can build from there with sound strategies, tips and tools.
Final Words
At Synchrony, we believe that being a knowledgeable consumer and saver are key ingredients to building financial literacy. By employing some of these tips and accessing the right tools, a culture of financial wellness is indeed possible.
Talia Stinson is a Content Specialist with Synchrony, and has a background in research, content strategy and management. She specializes in writing on financial, technology and wellness topics.
READ MORE: 40 Simple Ideas for How to Save Money Fast
Article Sources:
Information on Native Students
The Population of Poverty USA
Building Native Communities: Financial Empowerment for Teens & Young Adults
Q&A: Empowering U.S. Finance Literacy for Indigenous Communities
Native CDFIs: Stepping Up to Serve Indian Country through the Pandemic and Beyond
Totem
Ask a Fintech Founder: Amber Buker, Totem
What Is an Interchange Fee? Here’s Why They Are Required
Guide to Doing Business With Tribal Governments
Bureau of Indian Affairs
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