Get Ready for Financial Literacy Month!
Many organizations are gearing up for Financial Literacy Month, the campaign dedicated in April each year to educating Americans about the need for sound money management.
As the U.S. prepares to take part in this important campaign, it is interesting to note that large numbers of American consumers do not have the knowledge associated with making sound financial decisions.
This lack of knowledge was noted in an annual survey released by the TIAA Institute and the Global Financial Literacy Excellence Center (GFLEC) at the George Washington University School of Business. In the second wave of the survey, U.S. adults answered, on average, only one-half of the 28 survey questions correctly.
The 2018 TIAA Institute-GFLEC Personal Finance Index (P-Fin Index) reveals that financial literacy is the lowest in the area of comprehending risk, with only 35 percent of questions on risk answered correctly, on average. Given the fact that risk and uncertainty are inherent in most financial decision-making processes, low knowledge levels on this topic carry implications for Americans’ overall financial well-being, the survey notes.
The P-Fin Index also found that financial literacy is significantly higher among men than women–with a share of 21 percent of men answering 75 percent of the P-Fin Index questions correctly, compared to a share of 12 percent of women.
“The annual P-Fin Index provides a deep understanding of the state of financial literacy among U.S. adults,” said Stephanie Bell-Rose, Head of the TIAA Institute. “Given the link between financial knowledge and financial outcomes, individuals would clearly benefit from increased financial literacy levels. This is particularly important in an ever-changing financial landscape.”
As a financial advisor, you can join the campaign by educating your prospects and clients about the need to raise their financial-literacy levels and take concrete steps in planning their financial future.
You can obtain information to help you achieve these goals by visiting several websites, including www.gflec.org, the website of the Global Financial Literacy Excellence Center (GFLEC).
Additional information on improving financial literacy is available at:
*http://www.choosetosave.org/–-Choose to Save is a public education and outreach program of the Employee Benefit Research Institute (EBRI) Fund, which is designed to raise awareness of the need to plan and save for long-term personal financial security.
* https://pfeef.org/2019/01/14/hard-financial-planning-lessons-learned-from-the-government-shutdown/. The Personal Finance Employee Education Fund’s
(PFEEF’s) mission is to provide support to organizations and their employees as they take charge of their financial well-being
*Federal Trade Commission Consumer Information–consumerftc.gov.
*Council for Economic Education
Join the campaign today and start making a difference in the lives of your clients and in the financial performance of your practice.