It’s time to stack that coin. Financial Literacy Month is here.
What is Financial Literacy?
There are misconceptions that getting a job or having a large sum of money will make you financially literate. That is not the case.
As defined in Forbes magazine, “financial literacy is the understanding of money such as taxes, savings, bills, retirement, budgeting, and paying for school and investing.”
Like any other skill financial literacy must be learned and continuously practiced. Learning how to save and invest your money can not be taught overnight but takes long term planning and commitment.
Why is Financial Literacy Important?
Financial literacy is important because it helps us to manage and save our money. Most of us, especially persons of color, fail to learn this concept early on in lives and even as adults. Not being financially literate could put us in debt and expose us to other financial burdens. According to survey by Credit Karma, a personal finance company, “many Americans over 40 still has college debt”.
Even though money management is an essential skill many schools do not teach financial literacy. The arts, music, and sciences are beneficial subjects in various parts of our lives but financially literacy is just as important. If we don’t know how to spend our money wisely we can end up making poor financially decisions and put ourselves in debt. In an article written by John Kiernan, “2019’s Most and Least Financially Literate States”, he mentioned that in 2018 American credit card debt was more than one trillion dollars!!
The Epidemic of Financial Illiteracy
The Great Recession in 2007 showed how little we knew about money and saving. Leading up to the event many people took out bad loans and maxed out their credit cards to buy fancy houses and make other large purchases. Many of these purchases were based off impulses and were not safe investments. Subsequently, those financial decisions backfired when the house market crashed. After the recession there were more initiatives and programs designed to help people make better decisions with their money and investments.
Yet, even todar many persons here in the US lack financial literacy. According to a report by the National Financial Educators Council 1 of out 4 adults lose over $30, 000 due to lack of financial knowledge. These persons include minorities, persons of lower and even those of upper class. Many employed individuals who earn six figure income may live comfortably but will not be able to sustain themselves if they lose their job. For instance, during the federal shutdown earlier this year many Americans were just a couple of checks away from losing their homes. Fortunately, the shutdown was temporary and those jobs were recovered. Yet, even after the mishap many people continue to struggle with managing their personal finances.
How Can You Become Financially Literate?
In 2010 Former President Barack Obama announced April as Financially Literacy Month. During this month he urged us to learn better ways to manage our money and to teach our kids money management skills as well.
Today, there are many resources, programs, and counselors that can help you meet your financial goals. One person that can help you secure and invest in the bag is Lou Chatman, Financial Consultant. Young, smart, and credit savvy he can teach you several ways to help you become more financially literate. Below is the interview:
Let’s start with your story. How did you get started and what inspired you to start Lou Chatman Consulting?
I got started in April 2018 when I ran across a young woman by the name of Ameenah Rasheed on Instagram who was advertising Credit Repair. Then I knew I was ready to start my credit journey. But as most of us do, I kept procrastinating and pushing it off. After I prayed about it, I decided to reach out to her and get started. Interesting enough, I knew about credit and finances because I have a background in banking. In October 2018 I received my credit reports back from the 3 credit bureaus. I experienced an increase in my credit score and had several deletions. The opportunity was also presented to me to start a credit repair business that only required a small investment and commitment, me. What inspired me to embark on starting this business, was simply from my own personal struggles with credit and finances, I knew this was a major issue that nearly half of the world has. Also, I genuinely have a love for people and really enjoy helping people. In September 2018, Lou Chatman Consulting was born. Since being on this journey, I not only gained an amazing business partner, but a mentor, leader, and friend. This has also allowed me to connect with other entrepreneurs and partners across the world, and expand my network.
What has been the most challenging part of operating your business?
The most challenging part of operating my business would have to be running into people who aren’t ready. They aren’t ready because they are not willing to change and invest in themselves. When you tell yourself you want to do something, you must first be willing, and that’s what makes you ready.
There’s the stigma that in communities of color people lack knowledge about accumulating wealth. What’s your thought on this?
Yes, this is true. I think the reason why we face this issue is that most of us were taught to go to school, get a good job, and take care of our family. This is such a closed minded way of thinking, and it only sets us up for failure and not success. Most people feel that job security only exist for those who have a college degree and work for a reputable company. I hope that one day we can change this narrative and expose people to the possibility of going out and creating their own opportunities. Everyone has a goal to become something, yet most people don’t know what it takes to get there. People have to understand that the key to becoming wealthy is having multiple streams of income. Many of entrepreneurs and successful people to this day are invested in several businesses. We may only know them as an actress, model, doctor, lawyer etc., but they all one thing in common, investing.
Identity theft is a rapid growing crime and thieves are becoming trickier. What’s your advice to someone who becomes a victim of identity theft?
I agree, and nearly 9 million Americans have their identity stolen each year, with credit card fraud being the highest type of identity theft. My suggestion to someone who becomes a victim is to first ensure they file a police report, contact their banks and lenders, and the 3 major credit bureaus, so that they can add an alert to their account. This will require a business to contact you regarding all new accounts and verify them before it can be opened. Lastly, get identity theft protection, and that’s something I also provide.
Given the success of your company do you plan to open a physical location?
Haha, I don’t see that happening anytime soon. The beauty of being and entrepreneur and having a business as such, allows me the opportunity to have clients/business partners across the US. I think I enjoy not having the overhead cost and having the freedom to travel whenever or wherever I want. This could become a reality when I start investing in other businesses and might need a staff, so I’m not opposed to it.
For more information about Lou Chatman, you can go to louchatman.com