“My dad worked every day of his life. We were not rich, but there was one thing he would always tell us that sticks with me to this day: ‘Don’t spend every dollar you have. Save your money because you never know when there might be an emergency, and you will need it.’” – Frederick O. Hardeman

According to a recent study by the Financial Industry Regulation Authority (FINRA), two-thirds of Americans cannot pass a financial literacy test.

Such tasks as devising a budget, computing interest on a loan, maintaining a savings account, understanding how investments and the stock market work, balancing a checking account each month, and planning for some unforeseen financial crisis all remain beyond the reach of most adults in this country.

A deficiency in financial literacy among certain demographics tend to be  higher, namely, African Americans, women, Hispanics and millennials. Even after a decade of surviving the 2008 fiscal crash, a higher percentage of these groups are still worse off than they have ever been.

According to Frederick O. Hardeman, vice-president and Commercial Relationship Manager at Regions Bank, historic indicators and patterns of handling money play a part in how spending decisions are made.

“As a people, we have not been taught any principles of financial literacy,” he said. “Our parents and then, their parents before them, did not have a monthly budget or income to invest in the stock market. Everything was spent toward survival and obtaining the bare necessities: food, clothing, and shelter. That lack of financial literacy was passed down and has now evolved into the haphazard, impulsive spending we see in our community today.”

Systematically, Hardeman said, minorities have been victimized by lower wages, higher unemployment, and a stigma that characterizes spending as “buying what you want and begging for what you need.”

“In many cases, unfortunately, this is what happens. Although most black families are working people, many exacerbate their financial plight by mismanagement of resources and neglecting to save. There is no money put back for a rainy day.

“My dad worked every day of his life. We were not rich, but there was one thing he would always tell us that sticks with me to this day: ‘Don’t spend every dollar you have. Save your money because you never know when there might be an emergency, and you will need it.’”

FINRA found that African Americans, women and other minorities tend to lack investments, adequate revenue to start businesses, and truly understand the concept of “disposable income.”

Simply put, disposable income is the amount of money left after all obligations have been met. It may be spent or saved at discretion. Because saving money is not the option generally chosen by individuals in lower-income brackets, a real financial crisis cannot be adequately met. Monthly obligations fall behind, credit scores are affected, and other means of generating money, such as use of pay-day and car-title loan transactions are used.

Research shows that 40 percent of African Americans and 35 percent of Latinos patronize these lenders, as opposed to only 21 percent of both whites and Asians.

“We see this all the time,” Hardeman said. “Black families, even those who have their own businesses, turn to predatory lenders because traditional lenders, such as banks, won’t lend them money. When money is unnecessarily spent on $200 sneakers, costly hair appointments and other personal splurging, and impulse buying, many people are financially unstable.

“How they spend their money is how they have always spent their money. People simply say, ‘I’ll have more money when I get my check in two weeks.’ But living this way puts people at risk for a financial catastrophe. Many are one health crisis or injury away from losing every thing because there is no safety net. No savings, no resources from which to draw from in the case of some unforeseen emergency.”

Even if families have traveled so far down that road, and the financial outlook is deficient, there are some steps that anyone can begin to take that will improve that outlook in as little as two years, Hardeman said.

“People with menial jobs that don’t pay very much can buy homes, cars, and other assets by practicing healthy principles of saving and spending,” he said. “That home or vehicle may not be as grandiose or as extravagant as someone else’s, but they will be assets owned. This is the beginning of wealth-building and leaving something behind for our children.

10 rules to change anyone’s ability to financially improve a situation:

1) reate a workable budget that covers all monthly obligations first. Put the rest of the money in a savings account. Spend sparingly and only use the money for absolute necessities

2) f possible, look for a second job, part-time, that will provide additional income to pay off debts, credit cards, and bring any current delinquencies up to date. Work for as long as is reasonable to eliminate debt and continue building a cash reserve in savings.

3) et your sights on home owning, rather than long-term renting. A home can be passed down as an asset to your children. Some credit repair may be needed. Obtain a copy of your credit record from all three credit bureaus. Items that remain on your record over seven years old can be taken off. A call or letter can get those removed. Your local bank professional can help with this process.

4) on’t create any more unnecessary debt. If another vehicle is needed, pay cash for it. Spend a few thousand dollars now. Find the best bargain you can on a good, solid mode of transportation, and an additional monthly obligation has been averted.

5) wear off using predatory lenders for cash. That’s what the savings is for. If you want to take a family vacation, or look at starting a business, plan for additional expenditures. Seek the help of a financial professional. Don’t set out to start a business without the benefit of good advice.

6) on’t live beyond your means. If you can only afford a home mortgage of $700, don’t purchase one costing $1,300 a month. That will catch up to you quickly. Build up to the home you want.

7) void lavish, careless holiday spending. Use neither savings nor credit cards to purchase expensive electronics and other items that will blow the budget for the next 12 months. This includes birthdays as well. Plan for additional purchases. Save separately and earmark a set amount for that purpose.

8) f a retirement plan of some kind is available on the job, take advantage of it. Also, set aside a certain percentage of savings to invest in bank products or stocks, again, seeking the advice of a trusted professional.

9) void spending a significant amount of money on lottery tickets and other high-risk endeavors. Make sure that kind of recreation spending is highly controlled and seldom.

10) ay 10 percent on income, the tithe, to a church or charity, according to your faith. The principle of sowing and reaping works. Many large corporations have a non-profit foundation that gives away money because they experience increase in profits. They are not religious, per se, but they employ the principle because the principle works.

Hardeman admits that when advising families and business owners about improving their financial standing, there is great skepticism about the last one.

“I promise, when people get serious about practicing all 10 of those principles, they literally change the future for themselves and their children. Some actually laugh at the last one, but I’m telling you, there is great reward in giving.

“If people don’t practice any faith, I just tell them, ‘Don’t factor God in or a Higher Power. Call it whatever. Call it the universe. The universe returns giving back to a person in greater measure.’ It’s really true.”