The Societal Benefits of Financial Literacy

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While it’s good for people themselves to be financially literate—to know how to earn and manage money—society itself needs widespread financial literacy among the people in it. Even though hundreds, if not thousands, of organizations in the U.S. advocate for individual financial literacy training, we don’t necessarily recognize the global benefit of it.

Even the founders of the United States saw the influence of money wasn’t just a personal thing but had a profound effect on society.

John Adams wrote a letter to Thomas Jefferson about it in 1787.

“All the perplexities, confusions and distresses in America,” Adams wrote, “arise not from the defects of their constitution or confederation … not from a want of honor or virtue, so much as from downright ignorance of the nature of coin, credit and circulation.”

Adams’s statement shows the gravity of the situation in a culture that was on a path of financial demise. He recognized our country needed to head in a different direction and put a focus on ongoing personal education about money.

So when we talk about financial literacy for people, we should also talk about the following ways literacy benefits society as a whole.

1. Financial stability soothes marital stress and decreases divorce rates.

Financial tension hurts marriages. When couples lack financial education, they more easily fall into disagreements about how money is spent. Nor are they happy if they cannot even communicate about financial matters with each other because they lack the vocabulary to do so.

Money disagreements, in fact, are often listed among the top reasons for divorce, along with sexual infidelity and poor communication. Couples often blame each other for poor financial management, and a vicious cycle starts where neither spouse takes responsibility for improving the situation.

In search of solutions to this problem, of course, couples can talk through the money issues, seek out the advice of a professional advisor/counselor or attend finance classes. The financial health of a marriage can be improved if couples can better understand and respect each other’s unique financial values. It might help them to use tools like the National Endowment for Financial Education’s “LifeValues Quiz.”

2. Financial education helps a society because it helps people meet their basic needs.

Read the rest of the article at Financial Advisor Magazine

By | 2019-10-07T05:48:46-05:00 October 5th, 2019|Categories: Financial Literacy|Tags: , , , |Comments Off on The Societal Benefits of Financial Literacy