In this installment, I’m excited to focus on Budget Buddies, a brilliant organization and strategic community partner of Acadian’s since 2018. Budget Buddies exists to provide financial literacy coaching and mentoring to women and girls living on the economic margins.
When we look at the data, we see the dire need for this provision. Women in Massachusetts earn on average 83% of a comparable man’s pay and the statistics get worse when we drill down into different racial and ethnic demographics. Black women earn 59 cents in the dollar, and Latina women 51 cents. In situations where a woman is the sole head of the household, this huge inequality can create a vicious poverty trap, with economic disadvantages often persisting across generations. 28.9% of female-headed households experience poverty.
The Covid pandemic has proved challenging for many people across the globe, but we have seen women being affected disproportionately. Women have been quicker to leave the workplace to take on additional childcare responsibilities during lockdown and as we recover from the pandemic, it is clear that women are slower to return to the workforce.
Part of the problem is the lack of access to basic financial education and planning that many female heads of household experience, leaving some lacking the tools to change their circumstances for the better, or to create a more proactive strategy for economic stability. A 2017 survey in Massachusetts, for example, found that only 3% of students in low-income communities achieved a strong performance in financial literacy.
Finance and economic concepts can be confusing to the uninitiated. George Bernard Shaw, the great Irish playwright, remarked that “all professions are conspiracies against the laity.” Finance is full of confusing jargon. As part of the investment management community, I am fortunate enough to understand most of it, but put me in a room with some particle physicists or plumbing engineers and I won’t have a clue. That might make for a socially awkward few minutes; the difference is that my ignorance will not affect my life chances.
Much of the difficulty is about confidence. This was neatly illustrated by a study by the TIAA Institute and the George Washington University. In their survey of financial knowledge, women answered 25% of all questions with “I don’t know.” All analysis suggests that results are worse with low-income groups and racial and ethnic minorities. Without a humane educational kick-start, this can lead to a downward spiral, in which those who are most vulnerable risk falling even further behind through a series of decisions that may or may not have had any viable alternatives—for example, taking on increasing debt, often in the most expensive way due to lack of options, pushing these women, and their families further into financial hardship.
This is where Budget Buddies comes in. This organization provides workshops and one-on-one coaching to build financial literacy, confidence, and security among low-income women and girls. The ethic is one of compassion and collaboration.
The Directors and the Executive Team together have many years’ experience in a variety of relevant areas: finance, education, psychology, and not-for-profit, to name just a few. We are very proud that one of our Acadian colleagues, Sean Spaulding, sits on the Board. Several of our female employees have served as financial coaches and we are delighted that Acadian’s Women’s Forum is providing opportunities for its members to get involved with the organisation in new and creative ways.
The programs are designed to equip the participants with a range of very practical skills, ranging from learning how to shop for healthy groceries on a budget; put cash aside for larger expenses; and protect against fraud and exploitation; to writing a resumé and even negotiating a pay raise.
The program results speak for themselves. A 2019 analysis of a four-year period showed that 69% of graduates pronounced themselves very confident of their money-managing abilities (up from 24% before the program); 69% typically budgeted (was 20%); 73% managed to put cash aside (was 27%); and 92% were paying their bills on time (was 59%).
Danielle Piskadlo, the Executive Director of Budget Buddies, is best placed to highlight the immense difference these programs can make for their female clients. "The women helping women model is powerful to see in action - not just coaches supporting participants in their financial wellness journey - but the women in each program coming together to lift each other up and support each other's financial goals. It gives such a sense of community and belonging."
What Budget Buddies does is genuinely life-changing stuff. They provide access to information and education that has previously been out of reach to their constituents, and they do it with professionalism and compassion. We at Acadian are massively proud to be associated with Budget Buddies, Danielle and all of her team, and look forward to continuing to partner with them and support the great work they do.