Jaime Leverston is CEO of Cabin 8 Mining.
Currently, financial literacy among the population is alarmingly low – and trends suggest that the next generation could be even worse off in terms of their financial acumen and confidence.
Recent research by Ipsos for Money Matters showed that rightly so less than two-thirds of Americans (64%) are financially literate. And in one study financial literacy (download required) from the TIAA Institute and the Global Financial Literacy Excellence Center at George Washington University, 37% of Gen Z respondents were able to correctly answer 25% or less of the financial literacy questions. The emergence of new asset classes, such as digital currencies, is driving greater understanding of the cloud.
Individuals who lack financial literacy may make poor financial decisions, such as taking on high-interest debt or not saving for retirement. These decisions can have long-term consequences, such as economic hardship and bankruptcy. Closing this gap is also important for business leaders and employers. It is a critical step towards fostering financial stability and success for individuals and society – and financially literate team members and employees can, in turn, become the foundation for resilient and financially healthy organizations.
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The plea for business involvement
Successful business leaders and founders are particularly well positioned to help close these knowledge gaps. From budgeting and payroll to risk management and fundraising, they have an authentic perspective on the importance of financial literacy for future success. This credibility makes them ideal for teaching and connecting with young people.
Unlock innovation and empower entrepreneurs
By increasing the financial literacy of the next generation, business leaders and founders can unlock new talent and innovation and help more people start, fund and sustainably run businesses.
Financial literacy means having the economic confidence to understand how to finance a business, research venture capital backing, manage cash flow, and build sustainable businesses. By providing the necessary risk management skills and market knowledge to develop entrepreneurship and realize business opportunities, this financial foundation could lead to the next generation of new businesses and technologies. Shark Tank investor and entrepreneur Mark Cuban has advocated for increased financial literacy and education for the next generation of entrepreneurs – but you don’t have to be a billionaire or best-selling author to make a real and profound positive impact on the next-generation financial literacy gap in your community or industry. Here’s how you and your team can make a difference.
Invest in financial education programs
One of the most effective ways business leaders can help increase financial literacy is by investing in financial education programs. This may include partnering with schools, community organizations, or other educational institutions to provide funding, resources, or in-house expertise for after-school programs, financial literacy workshops, or online courses.
Offer financial education resources and tools
Business leaders can also offer resources and tools to help young people learn about personal finance. This could include creating educational materials such as brochures or online tutorials, sponsoring learning events, or creating access to and driving engagement with financial planning tools such as budgeting apps or investment calculators. By providing and supporting the distribution of these resources, business leaders can empower young people to take control of their finances and make informed decisions by meeting them where they are.
Provide mentorship and guidance
Business leaders can also mentor and mentor young people interested in learning about personal or business finance. Be a speaker, volunteer as a mentor for a financial education program or accelerator, or offer advice and support to young people starting or running a business.
Bring financial education to the workplace
Employers can also provide employees with access to financial education and tools. This may include offering financial education workshops or seminars to employees, or integrating financial education into the company’s onboarding or professional development programs.
By incorporating future financial education into the workplace, business leaders and founders can also create knowledge ambassadors who can pass that knowledge on to siblings, children or friends. For example, our team offers an employee tool that aims to make our employees more financially skilled.
Take advantage of the network effect
Business leaders and startup founders have vital ecosystems and communities in which to participate to support the above programs and leverage the network effect. Likewise, they can use their social media platforms and other marketing channels to promote financial literacy initiatives and raise awareness about the importance of financial education.
Investing in the next generation of financial literacy is a smart business move for leaders and founders as it can help build a strong pipeline of financially savvy employees and customers.
Closing the financial literacy gap in the next generation is critical to fostering financial stability and success for individuals and society. Business leaders and founders can play a critical role in this by investing in financial education programs, partnering with educational and community organizations, and prioritizing financial literacy in their businesses and leadership practices. This way they can have a positive and lasting impact on the next generation.
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Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.