Starting with the class of 2027, my class, every public high school student in Connecticut has to pass a half credit course in personal financial management before they can graduate. It is a good law, and I say that as someone who once wrote a financial literacy curriculum so bad I had to throw it out after one class.
It was a slide deck about budgeting, built for kids in Bridgeport through a program I started called Bridges 2 Business, and it assumed everyone in the room had a checking account. Nobody did.
What most of them had was years of experience reading their parents’ bank statements and filling out insurance forms for them, and it took me about 20 minutes to figure out they understood how money moves through a poor household a lot better than I did. I rewrote the curriculum after that class and kept rewriting it, and it’s now 25 lessons taught by more than 30 volunteers to over 100 students at three schools.
The thing they taught me has a name. Economists call it the poverty premium, which is a polite way of saying it costs more to be poor. A family without a bank account pays a fee to cash a paycheck and pays again to buy a money order for rent. If they send money to relatives abroad, as a lot of Bridgeport families do, they’ve paid a 1% federal tax since January that applies only to transfers paid in cash or money orders, while transfers from a bank account are exempt.
Washington looked at the unbanked and decided they weren’t paying enough.
This is not a small group. The FDIC’s most recent survey found 9.5% of Hispanic households and 10.6% of Black households had no bank account, more than double the national rate, and the most common reason was that they couldn’t meet a minimum balance.
I used to think the fix was to tell people to open an account, which is roughly what my first slide said. I remember a father at a check-cashing counter in Bridgeport splitting his paycheck on a Friday, part for rent and part wired to his mother in Guatemala, and thinking he was making a mistake, and only later understanding that the counter was open when he got off work, didn’t ask for a minimum balance, didn’t hold his check for days, and spoke Spanish, which is more than I could say for the bank. So the mistake was mine, and it was the same mistake my slide deck made, which is assuming the expensive choice is an uninformed one.
So here’s my ask for the State Department of Education as schools build out the new course. Put a unit in it on the poverty premium, including how to find accounts certified by the national Bank On program, which have low monthly fees and no overdraft charges and are offered by several of the biggest banks in the country. The standard version of this course teaches credit scores and compound interest. Those matter, but a kid in Bridgeport who’s been managing a household’s cash since sixth grade needs to know what the cash is costing.
I don’t know whether a class fixes any of this. A student who learns what a minimum balance is still can’t make one appear, and some of the kids I teach will graduate knowing exactly how the poverty premium works and keep paying it anyway, because the counter is still the only thing open at 7 p.m. I haven’t figured out what to do about that part.
My first curriculum had a slide titled “Opening Your First Checking Account.” I still have it. It’s a very nice slide.
Marcos Cruz is a senior at Fairfield College Preparatory School in Fairfield and the founder of Bridges 2 Business, a financial literacy program for immigrant students in Bridgeport.