April is Financial Literacy Month, and financial know-how is vitally important for Michigan's children, young adults, families, and senior citizens.
In addition, having a population of informed, financially-empowered individuals benefits our economy and has long-reaching impact on us all. In this episode, Treasurer Eubank's guest is Brian Rakovitis, director of Economic Inclusion at the Community Economic Development Association of Michigan (CEDAM) to tell us about his agency’s work on this important topic.
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April is Financial Literacy Month, and financial know-how is vitally important for Michigan's children, young adults, families, and senior citizens.
In addition, having a population of informed, financially-empowered individuals benefits our economy and has long-reaching impact on us all. In this episode, Treasurer Eubank's guest is Brian Rakovitis, director of Economic Inclusion at the Community Economic Development Association of Michigan (CEDAM) to tell us about his agency’s work on this important topic.
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Financial Empowerment for All Michiganders
Hosted by MI State Treasurer Rachael Eubanks, with guest Brian Rakovitis
Rachael Well, hello to our listeners! I'm Rachel Eubanks, and this is Treasury Talk. My podcast is generally focused on topics specifically related to your small business, but this month I'd like to talk about a topic I am passionate about that affects all Michiganders. April is Financial Literacy Month and financial know-how is personally important for our children or young adults, our families and our senior citizens.
In addition, having a population of informed, financially empowered individuals benefits our economy and has long reaching impact on us all. Today our guest is Brian Rakovitis, director of Economic Inclusion at the Community Economic Development Association of Michigan, otherwise known as CEDAM, to tell us about his agency's work on this important topic. Welcome, Brian!
Brian Thank you, Treasurer. So excited to be here.
Rachael You are such a perfect guest for this. I really appreciate you taking the time. So Brian, CEDAM may not roll off the tongue of everyone in Michigan. Please tell us a little bit about what the work is that CEDAM does and how it encourages financial literacy across our state.
Brian Yes. So CEDAM is a statewide membership organization and we were started 25 years ago to advance community economic development and really affordable housing issues. But over that time, we really expanded our mission to include a whole host of work, things like our community development fellowship, our policy advocacy work, economic inclusion, which I do and we'll be talking a little bit about today. And then our AmeriCorps program, to name a few.
Through economic inclusion and our other areas of work, I have to say, financial literacy is a very important factor to us. For example, our children savings account work that we do. These are post-secondary savings accounts that are started at birth or kindergarten, primarily kindergarten in Michigan, they’re community-led programs and they really work to ensure that students and really, young kindergarteners receive financial education throughout their K-12 experience. So it's a full elementary-on-up financial education, which has really been an important part of our work.
Another area is our AmeriCorps program, which brings financial education to youth, young adults, older adults, retirees, throughout Michigan. It really just sort of depends and they host workshops at local community centers, churches, schools, wherever people meet, to work on improving financial literacy. And funny enough, how I actually got my start to this work was through AmeriCorps.
So teaching financial literacy classes, and one of my favorite things that I did was a weekly partnership with Michigan Works to teach their clients financial literacy as they go through their employment training. Oh, and I'd be remiss not to mention our ‘Show Me the Money Day’ events which are community financial empowerment resource fairs that include budgeting, banking basics, home mortgage, couponing and so forth. You know, these events are actually occurring right now across Michigan.
Rachael Wow, that is a lot of work that you’ve got going on in a lot of different places. But you mentioned a term that I wanted to just see if we could expand on a little bit. You use the term ‘economic inclusion’. So can you explain a little bit more about what that is and maybe how your work kind of fits into economic inclusion?
Brian So you know, a lot of these terms are pretty interchangeable, but for us, we've really kind of defined economic inclusion as more focusing on systems-level changes, whereas when we think about financial empowerment, which is very important to us, that really focuses on the individual or the household level as sort of the area of change.
I think a really good example of what this looks like is the Earned Income Tax Credit, which at the state we recently expanded it to 30%, which is super exciting because it's a major issue of our Michigan Economic Impact Coalition, which focuses on free tax prep and credits. From an economic inclusion standpoint, this expansion is really thinking about how these available tax credits are there and how we can really maximize them to benefit folk’s ability to save, build assets, and really kind of advance up the economic ladder.
But from the financial empowerment standpoint, which is tied into this, we really think about, ‘OK, now that we've expanded this credit, what is our opportunity to connect folks with the knowledge, resources and ability to file for this credit to get it to really impact their individual household budget’.
So while they're interconnected, when we think about economic inclusion it's really thinking about ‘what is the policy behind economic systems’. What is behind different types of rules and regulations and how can we really expand them to make them more inclusive to all individuals – particularly low-to-moderate income folks who are living within Michigan, who are a major part of our economy, who really keep these the wheels turning but might not have access to all of the different opportunities, products and services just simply because the system hasn't been set up in a way that really focuses on them.
Rachael Yes, and I really appreciate you digging into that because we all know that words matter so much and we know what works best in terms of financial literacy and financial empowerment, the holistic approach that really brings in the full person and the full family. When we think about financial empowerment versus financial literacy, it's not just about the money and the abstract. It's about empowering people to become actively knowledgeable so they can make financial choices that change and improve the lives of their families.
Brian Yes and I completely agree with that and when we think about financial empowerment or economic inclusion on that spectrum, what is our ability as local organizations or nonprofits, governments, county governments, all the way up to the state and federal, to think about how are we really working with families to really make sure that they are getting all of the meaningful resources, but then also have, like you said, the knowledge, the skills, the ability to access and utilize them so they don't fall into traps like predatory lending products or refund advance loans from tax preparers that might not have done the best job on their tax return. Now they're in trouble because their refund amount isn't as much as they said.
So when we think about how these work together, they can't be divided; economic inclusion, financial power, that's why they're interchangeable, but they have to come together because we have to think about the system and the person who's going to utilize that system. Or that family.
Rachael Yes, absolutely. It’s really important that we begin educating people about finance and money management as early as possible. So I know it's been a few years now since we worked on the Financial Literacy Forum, which was really the catalyst for putting high school programs in place for students across the state of Michigan. What can you tell us about the program?
Brian I think there's definitely been a lot of interest in thinking about what that is K-12, but really that high school space around financial literacy. I know that there are definitely different things being put in place to really encourage financial education. I always think about it from the perspective of how I had the opportunity to really come into the financial empowerment space...
For me, it really started in fifth grade with my teacher, Mr. Meyers, who was actually my best friend's dad. So he would teach me during the week, and he would make me pancakes on a Saturday when I would sleep over. But he actually created an entire sort of fake banking simulation where we had to balance a checkbook and had deposit Meyer Mustang Bucks that we could earn through different things, like getting our little assignment notebooks signed by our parents. So he created this whole sort of system.
And really, I was quite fortunate to have had that happen because I'm not sure that some of my peers can balance a checkbook just simply because it's not really taught. And so you see, from the grassroots, a lot of folks are interested in moving into this education space and providing support to schools as opposed to throwing it onto the teachers.
I think we're, we're seeing a lot of successes in our children savings account work that I was talking about earlier. It really has that financial literacy component that starts in kindergarten as what is a dime, what is a penny and what do these things mean? And it really moves up to really complex financial decisions in the high school space, like taking out student loans. What does this mean? What does this impact going to be for you? How much are you going to make? And are you going to be able to pay back these loans -- and thinking about very complex financial decisions.
From a high school perspective, I think for the next step for this movement is getting everybody back together to say, we went through a rough time with the pandemic and we're kind of on the other side of this. But the financial landscape has changed with rising interest rates and all kinds of other things that are making things more difficult for folks. You know, what can we do to really reinforce our youth so that they're prepared when they come out of college or post-secondary training?
Rachael Well, this was all very interesting, Brian. Thank you so much for sharing the work of CEDAM and underscoring the importance of a financially informed population in Michigan's economy. So are there any words of wisdom you’d like to leave us with today?
Brian I think that, like the old saying ‘it takes a village’ it's one of those things where talking about finances can seem complex and overwhelming but the more that we normalize it, the more that we bring it up and think about what our financial futures look like, the better place that we're going to be. I think all this work is important and it's on organizations like CEDAM and others to think about the policies behind this, and it's up to our individual families to really connect in with these systems. So we want to make sure they're available, nonjudgmental and just there to support families wherever they're at in their financial lives.
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