Financial literacy awareness programs are topics we address with regularity. Whether people realize it or not, strong financial literacy awareness programs are at the heart of the success of every 401k, 403b, and financial wellness effort. And rightly so. Many Americans are confused about managing their day-to-day finances because they simply fail to comprehend the industry jargon. Even more confusing is the confounding nomenclature that befuddles the plan participant of a retirement savings plan. Efforts to save for retirement can be thwarted when plan participants do not have access to financial literacy awareness programs. Many workers know they should be setting aside enough funds to sustain their lifestyle in their post-work years, and that they are ultimately responsible for much of their financial security in retirement, however, they may have absolutely no idea where to start. The lack of a financial literacy awareness program may be an even bigger obstacle to retirement security than we realize, and if employers are able to help employees obtain the knowledge they need to make informed financial decisions, we could empower them to be more fiscally fit today and tomorrow.
We know that financial literacy awareness programs have a major impact on people’s wealth. Obviously, the more they understand the basics of topics such as saving, investing, mortgage, credit cards, and debt, the better they can manage their way to financial security. However, we have some work to do to help boost financial literacy awareness programs in companies. A Gallup poll from 2014, cited in a recent articlefrom the credit repair firm Lexington Law, found that only one in three adults is “financially literate.” Not much has changed since then as evidenced by a CNBC article published in September 2017. The research presented in the article found that 94% of Americans failed a financial quiz that asked basic questions about money. Clearly, there’s a real need to help Americans to beef-up their financial literacy awareness programs on the fundamentals of finance.
One interesting finding from that Gallup poll is that Millennials know more about finance than we give them credit. Behind those age 65+ (who rank at 63%), Millennials (rank at 61%) as the second-highest percentage of respondents to correctly identify U.S. Treasury Bonds as the safest investment. That said, Gallup discovered 75% of Americans do not understand how bonds work. In addition, nearly half of Americans do not comprehend how financial markets work, or that bull markets are characterized by optimism.