How Financially Literate are Your Employees?

April is Financial Literacy Month. Since its founding in 2004, many organizations have leveraged this time to further raise awareness amongst their employees and customers about the importance of financial literacy. 

As a company focused on employee financial wellness, the BrightPlan team is especially committed to Financial Literacy Month and its impact on employers and employees. In this blog post, we highlight three key facts about financial literacy in this country. 

Fact #1: Financially literate employees are healthier 

Stress has been coined the “health epidemic of the 21st century,” and it comes as no surprise that 73% of Americans rank money as their number one stressor. Although this trend is true across all generations, younger generations are more stressed out about their finances, with 82% of Gen Z and 81% of millennials reporting that they are stressed about money.  

Although 21 states required students to take a personal finance course to graduate high school in 2020, most Americans had to learn it on their own. Those who have invested in their financial literacy are not only wealthier than those who do not―they are also healthier physically and mentally. Financially literate employees have lower blood pressure, a healthier weight, lower blood sugar, and better mental health. Apples step aside―it is financial literacy that can help keep the doctors at bay.

Fact #2: Employees are willing to trade happy hours for financial education 

A survey about the state of financial literacy in America found that 63% of adults think schools should teach personal finance. 41% of respondents reported being self-taught, 37% learned from their parents, and 12% from teachers. 

Many understand the importance of financial literacy. The same survey found that 35% of respondents are willing to give up happy hours to receive financial education. 29% are willing to give up dating apps, and 12% are willing to give up their vacation days! How do your employees compare to the results of this survey?

Fact #3: Employees need the most help with setting financial goals, investing and building credit 

The National Financial Educators Council regularly administers a test that measures financial literacy. The three most commonly missed questions are around investing, goal setting, and credit building. Only 44% of respondents could calculate the amount of money earned on an investment with a 7% annual return. Only 46% could think of ways to start setting their financial goals, and only 46% could correctly answer how to start building their credit scores. All three questions cover concepts important to achieving a healthy financial life. How do your employees compare on these financial literacy topics?

According to the most recent S&P Global Finlit Survey, the U.S. ranks 14th in financial literacy, with 57% of adults considered financially literate. Although interest in financial well-being has escalated since the pandemic started, we still have a long way to go. Let’s celebrate this Financial Literacy Month by giving employees the gift of financial literacy―the gift that keeps on giving.