5 Reasons Inmates Should Be Taught Financial Literacy
5 Reasons Inmates Should Be Taught Financial Literacy
Prison education is a well-established factor in preventing relapses.
One of the areas in direst need of education is personal finance, as
many inmates are unprepared for the outside world upon release.
Unfortunately, due to lack of funding, there are few organized efforts
in this area beyond courses by volunteers such as The Ridge Project,
ACLU and even peer inmates. This may be a mistake, as there are several
reasons why inmates and society benefit from improved financial
literacy.
Reason 1: It Is an Essential Life Skill
Many inmates have never learned healthy money habits. At the same
time, it is those with low education and low income that most need the
skills to make money stretch while avoiding unnecessary fees and
penalties. All adults have to deal with the realities of personal
finance. You need basic budgeting skills to make sure all the bills get
paid so the lights stay on while still having food on the table at the
end of the month. Knowing how to balance a checkbook avoids overdraft fees
and unpaid bills. A poor credit rating makes insurance more expensive.
It is well established that education is the best guarantee against
criminal relapses. Having a basic grasp of money management is as
important for functioning in civil society as being able to read and
write.
Reason 2: Avoiding a Debt Quagmire
Inmates typically have poor credit ratings and/or spotty work
histories upon release, making them unattractive to regular creditors.
Meanwhile, predatory lenders are eager to extend lines of credit with
high interest rates and small monthly payments, effectively creating an
ever-increasing burden of debt. If unchecked, this downward spiral may
cause a return to criminal activities borne of financial desperation.
Teaching the true cost of compounding interest
and the impact of minimum payments would help inmates make informed
decisions when released. The steep penalty fees imposed for delinquent
accounts, overdrafts and collection fees are also examples of the kind
of unnecessary burdens that could be avoided with prison education.
Reason 3: Budgeting Teaches Responsibility
Many crimes are not planned but rather spur-of-the-moment actions
turned tragic mistakes because of poor impulse control. Budgeting
teaches long-term thinking and discipline. By foregoing an immediate
reward, a greater reward can be reaped in the future.
A strict budget also adds another layer of resistance to the
temptation of alcohol and substance abuse. These behaviors are not just
something to avoid; it makes the financial impact of spending the rent
money on alcohol or marijuana more tangible.
Budgeting can also help many inmates stay current on child support
payments; this is a common sore point that harms personal relations and
may cause feelings of despair and despondency.
Reason 4: Improved Employability
Almost all employers run at least some background checks on potential employees. A poor credit rating,
the usual result of bad money management skills, can be an immediate
disqualifier. A bad credit rating with high balances and delinquent
accounts gives the impression of unreliability, often ruling out the
applicant from any position involving cash transactions and the like.
A bad credit history may not be a huge obstacle to a minimum-wage
job, but an inmate who earned a college degree while serving his
sentence certainly does not need an additional disadvantage. He is
already competing with nonconvicts for qualified jobs; adding a poor
credit score just might close the door altogether. Budgeting skills
also enable him to afford the kind of clothing needed to convey a
professional image at work, bettering the odds of career advancement
down the road.
Reason 5: Future Home Ownership
Home ownership is another well-established factor for promoting
social stability. Adopting sound financial habits upon release helps
inmates build good track records with their banks, laying the groundwork
for approved mortgage applications in the future.
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