6 Ways to Improve Your Community's Financial Literacy

The American College of Financial Services
July 19, 2017

How big of a problem is consumer financial illiteracy? Statistics like the ones below show just how much Americans don’t know about managing money.

  • According to USA Today, the average consumer with a credit score of 700 had six open credit card accounts with balances equal to 15 percent of their total available credit, whereas consumers with credit scores over 800 had account balances equal to only 4 percent of their available credit.6 Ways to Improve Your Community’s Financial Literacy
  • The American College of Financial Services observed a 74 percent failure rate on its recent retirement financial literacy survey, data that reveals too few Americans understand important financial issues relating to retirement.
  • A 2016 NerdWallet study showed the average household has credit card debt, mortgage debt, auto loans, and student debts adding up to about $136,000. Of even greater concern –  many use credit to regularly cover medical and housing costs because it’s the only way to make ends meet.

As public awareness of the financial illiteracy problem grows, so has interest in addressing the issue.

Some organizations – particularly financial services organizations – have adopted financial literacy as their special cause and dedicate significant resources to developing programs that effectively teach Americans of all ages how to save, spend, and invest wisely.

Concerned financial advisors can also play a pivotal role in improving financial literacy. Many invest appreciable effort into working for positive change in their communities by volunteering for literacy initiatives. Giving time to an important cause helps those in need and can be personally rewarding. 

If you are interested in working to promote financial literacy in your community, here are six ways to contribute:

1) Support existing initiatives

Every April is National Financial Literacy Month, when numerous financial planning-themed events open to the public are held nationwide. Why not take part by holding an event to support the cause in your community? Learn more about National Financial Literacy Month and how to get involved here. National Estate Planning Awareness week is another national initiative. The good news is there’s still time to organize an event for the 2017 observance from October 16 - 22. Contact the National Association of Estate Planners & Councils for more information about estate planning initiatives in your local area.

2) Take part in a community event

Many municipalities and Chambers of Commerce organize events where members of the business community are invited to promote their business by renting a table and sharing information. If this type of event is in your calendar, why not add a financial literacy component to your presentation. It may even be appropriate to share a table with colleagues in related professions, like lawyers and accountants whose work complements yours, and offer short, pro bono consultations.

3) Teach a financial planning workshop

In keeping with their mission of serving their communities, libraries, community colleges, adult education programs, and recreation centers offer continuing education classes in practical topics. These groups seek qualified instructors and will greatly appreciate an advisor’s expertise. Tailor classes to the interests and life stages of the community. A talk on “saving for college” makes sense for an area dominated by young families. In an area where there is a large population of older residents, “funding retirement income” would be more appropriate. Workshop materials that can be customized for your audience can be found here.

4) Promote financial literacy on your website, blogs, and social media

Share financial literacy themed content with your online connections. It’s easy to find content by following the financial literacy initiatives of well-regarded groups such as the American Institute of CPAs’ 360 Degrees of Financial Literacy online, which has royalty-free resources for public use. The Feed the Pig website is another meant for sharing. This site’s excellence has been recognized by federal legislators and policymakers. Make sure to add financial literacy-related subjects weekly – your contacts will begin to look forward to your posts.

5) Become a pro bono financial advisor

In 2001, the Financial Planning Association (FPA) started Pro Bono Services to provide free financial planning services to underserved individuals and families. Working through a local chapter of the FPA, advisors can provide counseling, advising, and financial planning services to deserving members of the public who seek to improve their financial stability.

6) Contribute financially to organizations promoting financial literacy

Sometimes, family and work commitments make it impossible to volunteer. If that’s the case, make an impact by donating to a nonprofit organization that teaches consumers to manage money. The YMCA and the United Way are two well-known nonprofits that fund financial literacy programs helping underserved families around the United States. Learn more about what the United Way is doing in your community and find out how to contribute.

Financial illiteracy places pressure on households, hinders community growth, and eventually has implications for state and federal governments. Advisors are uniquely prepared and positioned to help community members with limited financial knowledge to learn, grow, and become better equipped to attain financial security.