"Financial Planning ... it's not always about money."

America Is Not Great When It Comes To Money. Here’s A Two-Pronged Approach To Fix That

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David M. Brenner, ChFC®, CLU®

D. M. Brenner, Inc.
Phone : (858) 345-1001
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There has been a steep decline in financial literacy in recent years in regard to more complex topics, including inflation, financial risk and mortgages rates. The nation has seemingly backtracked, as 8% fewer Americans surveyed by the FINRA Investor Education Foundation could correctly answer most questions on important financial topics in 2018 than in 2009 — 34% versus 42%, respectively.


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Specific segments of the population fared worse than others. The study showed a lower level of financial understanding among respondents who were Black, younger or had low incomes.

Why are the numbers getting worse? There may be many reasons, but some point to smaller school budgets in the years since the Great Recession, which has yielded lower math literacy among students.

The Gender Gap

The lack of financial literacy applies to both men and women, but on average, women score lower when answering financial literacy questions than men, the Federal Reserve found. Although it is not entirely understood why the gap in financial literacy exists, one factor may be the gender roles that have defined societal standards in dealing with finances. For example, historically in affluent households, the male partner in a marriage has more often been the one in charge of making financial decisions. With the financial responsibility on the shoulders of one spouse, the other may not feel the need to expand their knowledge of making, saving and investing money.

However, one study found that divorcees tend to gain more financial knowledge for each year they are divorced, closing the financial knowledge gap in 13.7 years. This leads me to believe that the lack of knowledge is simply a function of one spouse managing the finances, as the evidence shows that divorcees, whether they be women or men, are just as capable of gaining the financial literacy needed to manage their finances. This is good news because eight in 10 women will end up divorced or widowed, according to a 2018 report by UBS, meaning they’ll need to shoulder the responsibility for

A Two-Pronged Approach To Improving The Situation

  1. Teaching children from a young age about financial fundamentals is the first step. Financial education is ultimately the key to economic success for any individual. Bringing financial education into schools is a good start. In 2019, the U.S. Financial Literacy and Education Commission recommended that colleges require financial literacy courses as part of their curriculum, and this year, 25 states have introduced bills requiring personal finance education for high schoolers.
  2. Adult financial education is just as important, though. The financial industry is well-positioned to get involved in adult financial education by offering resources and advice. It is important to remember that everyone’s financial situation is different. What can we as finance professionals do to play a role in increasing financial education in our communities?
  • Get involved. Whether that is reaching out to schools or professional groups, find out how you can get involved to start educating those suffering from financial illiteracy. For example, I founded Savvy Ladies nearly 20 years ago. It is a nonprofit that champions women in taking control of their finances and achieving financial security and offers free financial education, support services and many education resources to advance women’s empowerment.
  • Educate your children, friends, family members and even your clients. As a financial professional, you can steer them to specific books or educational events.
  • Start a conversation. People can be afraid to speak up and bring up sensitive topics, so get the ball rolling yourself. To tie in with the first step above, remember that speaking about finances should start from a young age. 

By taking action to increase financial education at home and in our communities, we are supporting the closure of the financial education gap.

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David M. Brenner profile photo

David M. Brenner, ChFC®, CLU®

D. M. Brenner, Inc.
Phone : (858) 345-1001
Schedule a Meeting