MONEY // Financial Literacy
Financial Literacy the first step to Financial FreedoM
by Dianna Donahue - 04.01.2023
makeup by Amari B. Studios
& photography by Chuck Wilson for The W Agency
April is Financial Literacy Month, a designated time for financial institutions and representatives to share knowledge and engage in conversations focused on money and finances. It encompasses a wide range of financial topics, including saving, budgeting, credit, habits, and decision-making, that can impact a person’s financial health immediately and in the future. The designated audience excludes no one – children, teenagers, and adults; and beginners, novices, and experts in managing money. However, a good financial literacy session should include resources to support individuals with their goals.
Shamim Okolloh, Vice President, Community Outreach Officer for Encore Bank, shared some financial literacy tips with URBANE Magazine, and we are passing this wealth of information on to you! But first, a little about Shamim.
She was born and raised in Nairobi, Kenya, and is the proud mother of Liam and Ella. At 19, Okolloh moved to the United States to further her education at Spelman College. She acquired an Environmental Science degree from the legendary historically Black college and received a full scholarship from the University of Arkansas Clinton School of Public Service shortly after. Although she knew nobody in Arkansas, she was motivated to extend her education. So Okolloh packed her three suitcases and moved to Little Rock from Atlanta to acquire her Master’s degree in 2010.
She spent a decade in the non-profit sector, working globally with Heifer International and locally with Arkansas Foodbank on food insecurities. Then, at 40 years old, she moved to the corporate world and eventually became the Vice President, Community Outreach Officer for Encore Bank. Her time in each sector has given her insight into the common disconnects relating to people properly understanding money, wealth, and financial freedom. Not only does Okolloh advocate for people to understand it, but also to acquire and retain it. Here are a few of her tips that you can use to start, improve, and continue your financial health journey.
Shamim Okolloh, Vice President, Community Outreach Officer for Encore Bank, shared some financial literacy tips with URBANE Magazine, and we are passing this wealth of information on to you! But first, a little about Shamim.
She was born and raised in Nairobi, Kenya, and is the proud mother of Liam and Ella. At 19, Okolloh moved to the United States to further her education at Spelman College. She acquired an Environmental Science degree from the legendary historically Black college and received a full scholarship from the University of Arkansas Clinton School of Public Service shortly after. Although she knew nobody in Arkansas, she was motivated to extend her education. So Okolloh packed her three suitcases and moved to Little Rock from Atlanta to acquire her Master’s degree in 2010.
She spent a decade in the non-profit sector, working globally with Heifer International and locally with Arkansas Foodbank on food insecurities. Then, at 40 years old, she moved to the corporate world and eventually became the Vice President, Community Outreach Officer for Encore Bank. Her time in each sector has given her insight into the common disconnects relating to people properly understanding money, wealth, and financial freedom. Not only does Okolloh advocate for people to understand it, but also to acquire and retain it. Here are a few of her tips that you can use to start, improve, and continue your financial health journey.
“I was on WIC in 2014 – it was an embarrassing point of my life. How did I go from attending Spelman College to being on welfare? Almost a decade later, I am a better parent and banker because of my journey. I wake up each day excited to work alongside my teammates at Encore Bank to serve my clients and community.”
Q&a
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What is a common myth about credit in the Black community?
In my experience working with members of the Black community who have less-than-ideal credit, I have found that many feel overwhelmed by the barriers to accessing credit and unaware of the financial institutions’ approval requirements because there is a lack of guidance available on how to become lender ready. And I get it. I’ve been there. It was not too long ago that I was a first-time homebuyer feeling overwhelmed with all the obstacles and financial terms I had never heard before. But it doesn’t have to be that way. I was fortunate to find someone who helped guide me through the process, and now I want to be that person for others. In my role as a community outreach officer at Encore Bank, I am passionate about providing people with the knowledge they need to become lender ready. When it comes to assisting my business clients, I've discovered that many business owners believe that the path to accessing capital for their business is all about working to improve their business credit score, but lenders are actually more concerned with the cash flow and operations of the business. Why should a person care about their credit score? Credit scores determine your purchasing power and indicate if and how you repay the money you borrow. When you are ready to apply for a loan or a line of credit, the lender will want to see how you’ve handled what you’ve had prior. What is the difference between good credit and bad credit? I like to think of it as having high, middle, and low credit scores, and you can always work towards being in a range that is ideal for you. Your credit score is fluid over time and can be either maintained or improved depending on your financial goals. The better your credit score and credit profile (also known as your credit report), the more likely you are to get better interest rates on your purchases. In the long run, this saves you money. So, while you can finance a car with any credit score, the higher your credit score, the less you'll have to pay for the car over time. |
How does a person improve their credit quickly? Are there any shortcuts?
Improving your credit score does not happen overnight and usually requires time and consistent effort. Simply pay the debt. Pay it on time and make extra payments above the minimum. There are no shortcuts. Can a person’s credit score still remain low even if they pay their bills and debts on time and regularly? Yes, credit scores are impacted by more than just on-time payments. Your credit score is based on a number of factors including the length of your credit history, number of opened accounts and types of credit accounts. For example, when I began my journey to homeownership my score was 536 because I had no credit cards or loans, like a car note. So I opened a secured credit card to build up my score, and it took about 15 months to get it up to 640. Credit building can be a slow process, but it is worth it in the end. What factors do lenders consider when approving or denying a loan? It depends on your goal. Are you wanting to purchase a home or refinance your home? Are you needing a line of credit for your small business? Are you wanting to buy a commercial property to move from renting a salon suite to owning your own? Whatever the goal, I would advise talking to a banker. Once your banker knows what you’re wanting to achieve, the banker can work with you to discuss your options, which product is right for you and what’s required for you to obtain that loan. How can a person get their credit report? You can request a free credit report at www.AnnualCreditReport.com. Should a person save for emergencies? If so, how much? Many experts recommend you should save at least 3 to 6 months’ worth of living expenses. While on my financial wellness journey, I followed Dave Ramsey’s “Baby Steps” method. First, I saved $1,000 for emergencies, and once I had that, I put any extra into paying down consumer debt. |
HOMEOWNERSHIP
“One thing I would like to see more of in the Black community is families having wills, life insurance, and establishing a trust – if assets (aka a house) and resources are available. If we are going to work hard to buy a home, we must make sure our next of kin can inherit it without a headache. This passes wealth on to the next generation!”
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One of Shamim’s many hats is helping people purchase homes – many for the first time. Not only she had a front-row seat to a smooth homebuying process and the joyous reward of getting the keys to a home at the end, but she has also witnessed the opposite. As the interest and pursuit of homeownership increases, Shamim desires to educate people before their homebuying process, so they are as prepared as possible. This potentially alleviates disappointments and delays in the journey.
We asked Shamim to share her homebuying experience and her suggestions for closing on a house and getting those keys. Homeownership is one of the best vehicles for building wealth. This is because, over time, as you pay down your home’s mortgage, it becomes an asset and will increase in value, creating equity. For first-time homebuyers, the process is very intimidating and overwhelming. There are so many moving parts; the biggest hurdle for most is finding out if they qualify for a home loan. I advise finding a bank and banker you can establish a relationship with. They will be your trusted adviser to guide you through what will more than likely be the biggest purchase you make (this is a good suggestion for your business, too). My Black banker peers in Little Rock and I work hard to be trusted partners to our clients and collectively want to see that racial wealth gap shrink. |
We go to schools to talk to your children about finances. We understand that representation matters. We know that there is financial trauma. We understand the barriers to accessing capital because we hear about it through family, friends, or our own lived experiences.
The first step that I took on my homebuying journey was attending a first-time homebuyer's class that was offered. It outlined basic qualifications needed like:
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