Financial pitfalls have lifelong consequences and education is your defense.

Every April, the United States observes Financial Literacy Month, a time dedicated to raising public awareness about the importance of financial education. At its core, financial literacy is the ability to understand and effectively use various financial skills, including personal financial management, budgeting and investing. 

This annual spotlight is more than just a campaign — it’s a national call to action to empower individuals and families with the tools to make informed, responsible financial decisions.

In a world of growing economic complexity, rising debt levels and expanding digital financial tools, financial literacy is not just helpful — it’s essential. From navigating student loans and managing credit cards to saving for retirement and understanding insurance, financial knowledge is a foundational life skill.

Alarming statistics highlight the need 

Despite the clear importance of financial literacy, studies show that many Americans are struggling:

• Only 57% of U.S. adults are considered financially literate, according to the S&P Global FinLit Survey.
• A National Financial Educators Council survey revealed that the average American lost $1,506 due to lack of personal finance knowledge — totaling more than $436 billion nationally.
• Nearly two-thirds of adults cannot pass a basic financial literacy quiz, according to the Financial Industry Regulatory Authority.
• 73% of Gen Zers say they feel unprepared to manage their finances after graduating, based on a 2022 TIAA Institute-GFLEC survey.

These numbers paint a stark picture: a significant portion of the population lacks the financial knowledge needed to navigate daily life and plan for the future. Financial Literacy Month exists to confront this challenge head-on.

Why April? A history of promoting smart money habits

The origins of Financial Literacy Month trace back to 2000, when it was first recognized as Youth Financial Literacy Day by the National Endowment for Financial Education. Over the years, its scope broadened, and in 2004, the U.S. Senate officially recognized April as Financial Literacy Month.

April also is tax season, a time when money is on everyone’s mind, making it a perfect opportunity to reflect on financial behaviors and set new goals. Government agencies, nonprofits, schools and financial institutions all roll out initiatives during the month to educate communities, from free webinars and workshops to social media campaigns and classroom lessons.

Key focus areas: Budgeting, saving, debt, investing

• Budgeting: Creating and sticking to a budget is one of the most important financial habits. Yet, a 2023 survey by Debt.com found that only 32% of Americans maintain a household budget. Without one, it’s easy to lose track of spending and fall into debt.
• Saving: According to the Federal Reserve, 37% of Americans cannot cover a $400 emergency expense without borrowing or selling something. Financial literacy helps instill the importance of building an emergency fund and setting long-term savings goals.
• Debt Management: Credit card debt in the U.S. reached a record $1.13 trillion in early 2024, based on Federal Reserve Bank of New York data. Understanding interest rates, credit scores, and repayment strategies is vital to avoid long-term financial stress.
• Investing: While investing can be key to building wealth, it’s often misunderstood. A Gallup poll found that only 58% of Americans own stocks, a number that’s been slowly rising since the 2008 recession. Financial education helps demystify investing and encourages smart, informed decisions. 

Financial literacy in schools: A growing movement

There’s growing momentum to introduce financial education earlier. As of 2024, 25 states mandate a personal finance course for high school graduation, according to Next Gen Personal Finance. This movement is crucial, as financial habits formed early can last a lifetime.

However, adults need ongoing education too – especially as they face new life stages like marriage, buying a home, raising children or retiring. Employers are increasingly recognizing this, with many offering workplace financial wellness programs to support their teams.

What to do this month

Financial Literacy Month is a great time to take small steps toward a healthier financial future. Here are a few ways to start:

• Take a free online financial literacy quiz to assess your knowledge.
• Download a budgeting app and track your spending for 30 days.
• Attend a local workshop or online webinar focused on debt reduction or investing.
• Teach a young person in your life about money basics.

Empowerment through knowledge

Financial literacy isn’t about having all the answers – it’s about knowing where to start and seeking the right tools and information. In a world where financial pitfalls can have lifelong consequences, education is the most powerful defense. Financial Literacy Month serves as a reminder that it’s never too late – or too early – to start your journey toward financial empowerment.

This April, let’s commit to learning, sharing, and growing our financial knowledge – for ourselves and for the next generation.

This information should not be construed by any client or prospective client as the rendering of personalized investment advice.  For more information, visit BushWealth.com for our full disclosures.

Aaron Taylor is with Bush Wealth Management.