On Leadership: Why Financial Literacy Is Important To Businesses (And All Iowans)
At our company’s recent annual 401 (k) training meeting, a young team member raised her hand for more information, saying she was “trying to learn to be an adult.” I laughed but applauded her because managing finances is an essential skill for everyone. During Financial Literacy Month in April, it’s a good time for businesses to think about how to support the financial health of their employees – and this year it’s more important than ever.
The pandemic has exacerbated the financial vulnerability and stress of Iowa residents. Sadly, even before the pandemic, the majority of Americans weren’t planning for their financial future. Today, financial fragility has increased across the country and Iowa is no exception. A recent United Ways of Iowa / UNI study on the impact of COVID on Iowa residents found that the pandemic had unevenly affected families in Iowa and highlighted the financial vulnerability of many households. from Iowa.
While many Iowans now live on the edge, even Iowans with means lack basic financial skills or knowledge, according to reports from the Financial Sector Regulatory Authority. Gaps in financial literacy and preparedness are even more pronounced for women and people from marginalized communities.
Why is financial literacy important for businesses? If Iowa is to have a strong workforce and economy, financial literacy is essential and employers have an important role to play. A 2021 study by John Hancock indicates that financial stress is “a priority” for 64% of employees and 86% of employees turn to their employers for financial information or wellness programs; more than half of workers said that if they had better financial education, they could save more for retirement.
I asked several local leaders in the financial services industry: “Why is financial literacy so important to Iowa and the Iowans?”
Bailey Davis, Head of Investments, BTC Financial Services: Financial literacy begins by helping people better understand how credit, debt, and savings all impact their financial situation. But the long-term impacts are much greater. By placing more emphasis on financial literacy, we can break down socio-economic barriers, build generational wealth, and help future generations succeed.
Kenia Calderón Cerón, Vice President / Director of Bilingual Business Development, GreenState Credit Union: Financial literacy is key to ending predatory lending practices in Iowa. Unbanked and underbanked communities are prone to predatory practices from payday lenders and check cashing businesses. We can combat these harmful practices by equipping the people of Iowa with the knowledge and resources necessary to ensure their financial well-being.
Brittany Heard, Senior Advisor, Foster Group: Understanding your financial situation is the first step towards achieving your financial goals. Few people know their monthly income versus expenses, which is important in the process of financial literacy. With this understanding, you can begin to achieve the greatest financial life goals. important to you.
Deniz Franke, Private Wealth Advisor, Franke Miller Group, Private Wealth Consulting Firm of Ameriprise Financial Services Inc .: Financial literacy is of critical importance, especially for women and underrepresented communities in Iowa. One of the keys to success is to educate the younger generations well from an early age. It is essential that employers and advisors help ensure that future generations have a working and comfortable knowledge of the basics of finance, the meaning of money, and the pros and cons of debt.
Jo Christine Miles, Director, Core Foundation and Core Community Relations: Financial literacy is important because it is liberating and promotes the well-being of individuals, families and communities. Financial literacy helps us make informed and effective decisions about our money, freeing us from the stress of poor financial management. Without stress and other negative emotions that accompany it, we are free to devote our resources – time and treasure – to productive efforts that support our families and communities.
Financial literacy is important to all people in Iowa so that we can lead productive lives. More than ever, business leaders can play a vital role in financial education to help team members plan for today and tomorrow.