Buying a Home: Financial Literacy Then and Now

As I came to the Home Buying Financial Literacy event with the branded company truck, wearing branded company apparel, bring out branded marketing material I notice few cars were here. I wondered if I was at the right location for the wonderful Financial Literacy event. From my understanding the town of Landover and Largo planned a financial literacy workshop in associating with UCAP. UCAP is United Communities Against Poverty, Inc. (UCAP) which is a successful non profit organization with vast connections and proven track record. Freddie Mac representatives have even tapped the UCAP staffers to host Financial Literacy workshops during MAC week. Freddie Mac requested UCAP Financial Literacy expertise in spite of having a system in place to do the same thing. This choice shows the credibility of UCAP's organization and Financial Literacy facilitators.

So why was nobody here for Financial Literacy

The irony is that often times, those whom need the most help with financial literacy want it the least. I do not judge those with challenges. Lord knows I have my own challenges and struggles. But home ownership is a blessed opportunity. Many people need to go to Financial Literacy workshops to qualify for home purchases. This financial literary workshop was free and would qualify many people to move forward in the NSP (neighborhood stabilization process). The NSP program is such that you can qualify for up to $20,000 to buy your home in Prince George's county. To keep it simple, this Financial Literacy workshop was a free class that helped you get up to $20,000. Yet, as I walked in the room only the Home Buying Financial Literacy facilitators were there.

Financial Literacy is important to anyone that plans to move forward successfully in home buying process. It is imperative that through Financial Literacy we do not repeat the same mistakes of the past. Through Financial Literacy, we can embower ourselves, our community, and our children to accomplish more. Through proper home buying efforts and Financial Literacy we can leave behind estates instead of funeral expenses.

Nobody came to this home buying financial literacy event because we did not give them valid enough reason to see the value. Many new home buyers I am sure just did not know. The powers that be promoted the Financial Literacy Workshop on the internet and through a few other avenues. I knew about the event based upon attending a meeting with the UCAP Financial Literacy staff.

What is Financial Literacy?

To get back to the basics, Financial Literacy is the ability to disseminate through all the finacial data in our lives and process it into useable nuggets of information. The Treasury Department has much information to help us get a better understanding of our money. Yet we do not have many that even consider the value of Financial Literacy.

One of the financial literacy facilitator at the event stated the economy has been challenged because people don't understand budgeting. She continued that she had been frugal all her life. She was reading a book called "When Credit is Due" by Paula Strassels. This financial literacy book stated that to be in good financial condition you need to have a ratio of no greater than 20% (without your mortgage). This ratio shocked her. Even the Financial Literacy expert stated that she did her calculation was at 19%. She became nervous because she felt as a financial literacy expert she should be no where near borderline. My thought was the fact that after 30 year of home ownership, and a sluggish economy her ratios were excellent. The fact that she even read that book at this time is a testament to her Financial Literacy growth.

What did I learn from the workshop?

I obtained from the Financial Literacy workshop facilitators, that things are not always as bad as they seem. I learned that there was a time where people paid, 12-15% interest rates on their 1st trust mortgage. People where happy to get those rates and even more happy to have a home. I learned that while we have seen financial challenges, there is still more to come. I learned that doctors, lawyers, and other professionals with very big incomes and even bigger mortgages are in many cases coming up to balloon payments. I am not aware of any programs out there to help them. I was informed that if you plan right, budget properly you can grow wiser and wealthier with a proper financial literacy plan.