The Importance of Financial Literacy

Imagine driving a car without knowing how to operate it or understanding the basic rules of the road. Now, consider another equally alarming scenario — one that is all too real: many Americans are making financial decisions without basic knowledge of things like investing, budgeting, and credit.

In fact, according to a survey on financial literacy conducted by the TIAA Institute, the average respondent could only answer about half of the questions on common financial matters.¹ To make matters worse, another recent survey from the Census Bureau revealed that almost 40% of Americans find it difficult to cover their household expenses.²

It has been said that knowledge is power, and if that’s true, then too many Americans lack the power to control their financial futures. Financial wellness doesn’t happen by chance; it starts with education.

One of the primary obstacles to improving financial literacy is what’s known as the “Lake Wobegon effect” — or the belief that we are all above average, including our knowledge of how to manage our money effectively. Unfortunately, this assumption discourages many individuals from learning and adapting to the ever-changing financial landscape.

The more informed you are, the more informed your financial decisions may become. Thankfully, there are numerous resources available to you and we encourage you to consult with your financial and tax professionals to address your goals, questions, or concerns so that you feel empowered when making financial decisions.

If you’re not sure how to get started, reach out to a member of our team today who can help you put a plan in place and provide you with some peace of mind as we begin a new year.

¹TIAAInstitute.org, 2022
²Census.gov, 2023