Financial Literacy Month: Help Others Take Control of Their Financial Future

Financial Literacy Month - Female Advisor pointing to computer screen and talking with two clients

April is Financial Literacy Month, so we thought it was important to reflect on why financial literacy matters so much. No matter where one exists within the wide spectrum of financial literacy, the month of April offers an opportunity for personal growth and introspection. Regular, intentional financial check-ins over the course of one’s life can go a long way towards setting oneself up for financial stability and a comfortable retirement. ‍

The need for financial education has never been greater. According to a study by FINRA, only 40% of Americans were able to correctly answer at least four of six basic questions regarding their personal finances. Furthermore, the Federal Reserve determined that one in three households would need to sell something or take out a loan to cover an unexpected $400 expense. These figures underscore the importance of achieving a base level of financial literacy to thrive in the current economy.

Financial advisors play a vital role in increasing financial literacy for their clients and communities. We’ve compiled some information on how you can be involved this month and resources that you can share with clients and prospects.

Origins of Financial Literacy Month

‍More than two decades ago, the National Endowment for Financial Education (NEFE) identified a deficiency in financial literacy among young American professionals. NEFE launched the first-ever Youth Financial Literacy Day in order to bring more attention to the financial knowledge disparity and attempt to remedy it.

In the year 2000, a non-profit known as the Jump$tart Coalition took the reins. They recognized that financial illiteracy is both widespread and deeply rooted in socioeconomic structures. In an article he authored about closing the wealth gap between various demographics, Fintech innovator Ryan Williams wrote, “financial literacy is a problem for all America, but it doesn’t impact all Americans equally.” Indeed, research reveals the acute disparities that exist across racial and socioeconomic lines, with financial literacy being lowest among Black and Hispanic Americans. This acknowledgement led Jump$tart to expand the holiday from a single day to an entire month, and it would thereafter be known as Financial Literacy Month.

The Jump$tart Coalition

Founded in 1995, Jump$tart is a nonprofit organization aimed at promoting and expanding financial literacy curriculum at American schools. Realizing that deficits in financial literacy carry over from generation to generation, they posited that getting into the public school system was paramount to breaking the cycle. Basic money management concepts should be introduced at a young age and then ramp up to the more complex topics like investing and family planning by high school.

‍The goal isn’t to train financial experts, but to establish a foundation of financial knowledge that will set more Americans up for success (or help them avoid self-sabotage) by the time they enter the workforce. Jump$tart is committed to empowering more families to self-advocate when it comes to their money. What does this mean? It comes down to equipping Americans with the skills necessary to tackle financial problems, protect their interests, and plan for the future.

Taking Part in Financial Literacy Month

The Jump$tart Coalition and other organizations (financial or otherwise) host special events, disseminate digital and written content, and visit schools throughout the month of April in order to promote financial literacy. Though many of these initiatives are oriented towards kids and teenagers, countless avenues exist for older Americans to get involved in Financial Literacy Month. Here are just a few opportunities:

Money Smart Week

This is a week-long virtual event that occurs each year from April 10 to April 17. This year’s iteration will feature daily live online presentations by industry leaders and regulators, along with a myriad of written and media resources that are available to attendees. With an emphasis on building smart money habits, topics will range from personal banking to managing student and housing loans.

Panelists this year include FINRA, the U.S. Department of Education, and the Internal Revenue Service, among others.

Council for Economic Education

The Council for Economic Education continues to support educators with the resources they need to positively impact the financial futures of students throughout the country. This includes offering professional development, providing teaching materials, and making educational content available in more schools.

There will be a renewed focus on women investors this year, with a pair of virtual events—the Women for Girls speaker series and Fearless Woman: Financial Literacy and Stock Market Participation.

Financial Beginnings

Founded in 2005 to address gaps in financial literacy among both young people and adults, Financial Beginnings has since established itself as a national leader in financial education. In addition to the many events it hosts annually from coast to coast, Financial Beginnings maintains a popular Youtube channel where individuals can go to learn about a wide range of topics. Among these are college financing, paying taxes, and different types of insurance products.

The Takeaway

Use this time to help your clients understand where they stand in terms of financial literacy. If you’re onboarding new clients, you can ensure they know the basics around risk management, tax planning, charitable giving, retirement, etc., and how your services can help them.

New complex investment products, increasingly convoluted tax regulations, and a general sense of distrust for financial institutions are among the factors that continue to act as barriers to entry for casual market participants. Financial Literacy Month can be the springboard that helps you foster deeper relationships with clients and prospects.

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