In Context: Understanding Racial Trauma's Impact on Financial Literacy

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We stand by our belief that if financial education isn’t working for everyone, it isn’t working at all. Chloe McKenzie’s most recent piece as NEFE’s visiting scholar details the ways in which financial education, if left unchecked and unexamined, can exacerbate financial trauma for those who are oppressed by current structures within our financial systems. As champions of effective financial education, we invite leaders within our field to listen to and consider the all-too-common experiences that Chloe details. Her voice – one among many who have been ignored or unheard – deserves our attention. We cannot fully evolve into a field that truly serves all people on their paths toward financial well-being without the inclusion of diverse perspectives and the fortitude to act upon what is shared.

We understand that this paper may feel provocative to some. However, sitting with the discomfort that this scholarship, thought leadership and research evokes is necessary to support women’s and BIPOC’s financial well-being. We will continue to push for nuanced approaches to financial education: those that situate peoples’ experiences of systemic racism and trauma in context, and those that integrate culturally sensitive teaching. Without these efforts, we risk further inflicting financial trauma and pushing away economically vulnerable populations who need both educational and wider systemic support.

In recent years, NEFE’s Personal Finance Ecosystem has been a way for us to contextualize financial education within a broader financial landscape. The framework consistently illustrates our common refrain that financial education is not – nor should it be – the only solution to improving financial well-being. From a practice standpoint, we must consider how financial trauma impacts the financial well-being of individuals and communities and press toward holistic solutions that recognize systemic harm and the many barriers that exist to reaching populations that have been marginalized for too long.

We see it as our responsibility to raise the visibility of these issues, work toward a greater understanding of them, and amplify strong solutions. We know others in the field are also contributing to this national conversation. For example, the Aspen Institute is working toward inclusive wealth-building solutions. Additionally, FinEd50, a consortium comprised of the Council for Economic Education, VISA, the National Association of State Treasurers, and NEFE, is focused on providing equitable access to resources and culturally responsive financial education curricula. And, we continue to prioritize research initiatives that examine and improve the scales, measures, datasets and research design used within our field to improve the visibility of underrepresented populations and gain insights into systemic inequality that can be obscured without disaggregated data.


The financial education field must continue to invest in research that explores how to close access and outcomes gaps for communities of color and must advocate for changes that support the entire ecosystem of financial well-being.


Financial education policies and mandates should be designed with strong measures of evaluation to ensure they work for all populations. For educators, counselors and other practitioners, a better understanding of financial trauma can support learners socially and emotionally, leading to more effective learning experiences. NEFE is amplifying voices like Chloe’s to build a better understanding of the limitations and shortcomings of the financial education field so that we collectively can work toward better solutions.

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