A call to action: Strengthening our communities through financial literacy
April marks National Financial Literacy Month, a time designated by US legislators in 2003 to raise awareness about the importance of financial literacy and practical education in this realm. It serves as a crucial reminder of the significance of understanding and managing our finances to improve our standard of living.
So, let’s talk. A topic such as this can be challenging for some to discuss. No one likes the idea of being embarrassed about their financial situation. In an article written 13 years ago for Sattiewhite Training Productions, Inc., titled “Financial Health for the Financial Professional,” we discussed five fundamental money management essentials: understanding your money personality, the importance of budgeting and planning, controlled spending, living within your means, and the benefits of long-term financial planning. These principles remain as relevant today as they were then. Despite the passage of time, financial literacy remains a challenge for many. Recent studies indicate alarming statistics: one in four Americans cannot gather $400 in case of an emergency, financial disagreements contribute to a significant portion of divorces, and a staggering 78% of the workforce lives paycheck to paycheck. Moreover, only 16% of Millennials demonstrate basic financial literacy.
Regardless of the stimulus funds received and the national savings rate reaching $2.1 trillion, a large portion of Americans are finding it hard to survive in this higher-rate environment. Financial problems span across generations and income ranges. Many people live in a financially vulnerable position. We have seen this as delinquencies and charge-offs have increased. We are living in times where affordability is almost non-existent. The American dream is a concept that anyone, regardless of background, can achieve success and affluence through hard work, dedication, and opportunity. Over the last 50 years, the dollar buys much less now than it did. For instance, 45% of Millennials live at home with an average salary of $47,034. They cannot afford a house due to the lack of affordability. To overcome this, financial literacy is needed to aid us in navigating the higher economic environment. It is never too late to learn more about managing your finances. With Gen Z and Alpha on the horizon, the need for financial education has never been more critical. National Financial Literacy Month serves as a poignant reminder of the importance of financial literacy and education as we navigate the complexities of the modern economy.
As a credit union professional, financial counselor, and mother, I am deeply committed to promoting financial wellness. The current situation calls for the active involvement of credit unions. This is our moment to make a real difference in the financial lives of our members and the communities we serve. Understanding our members’ needs and delivering on them is our core mission. We were founded on the principle of providing financial access to those in need. I urge my fellow credit union professionals to join me in this mission, to educate more, and to provide the tools that will empower our members to improve their financial positions.
