Making the most of Financial Literacy Month

April is Financial Literacy Month, a time when the spotlight is on enhancing the financial-literacy skills of American consumers.

Several surveys have highlighted Americans’ low level of financial literacy, presenting a compelling case for agents and advisors to help their clients and prospects enhance their level of financial literacy. For example, according to the National Financial Educators Council, lack of financial literacy and not knowing how to manage personal finances carried a high cost in 2024.

Agents and advisors can use this opportunity to reach out to their clients and prospects and share the financial education and advice they need to move closer toward their financial goals.

The NFEC conducted a survey that asked American adults to estimate how much money they had lost during the year due to a lack of financial knowledge. The single-question survey asked U.S. residents: “During the past year (2024), about how much money do you think you lost because you lacked knowledge about personal finances?” A total of 1,200 people responded to the survey between December 26th and December 30th, 2024.

Among those respondents, the estimated average amount of money that their lack of knowledge about personal finances cost people was $1,015 last year.

“If we generalize the results to represent all of the approximately 240 million adults who live in the U.S., lack of financial literacy cost Americans a total of more than $243 billion in 2024,” the survey said.

AmeriSave survey highlights

A survey by AmeriSave shared the following highlights:

• One-third of respondents reported that credit card debt is their biggest source of financial stress, with 1 in 10 respondents owing more than $15,000.
• More than 31% of respondents make over $1,000 per month on credit card payments—putting a strain on their budgets.
• Over half (52.9%) of those surveyed prioritize paying off debt with the highest interest rates, suggesting high financial literacy around debt reduction.
• Despite this, the AmeriSave survey found that homeowners’ lack of understanding about the best debt management strategies ranked as a top three concern.

Financial literacy and retirement fluency

Yet another study is the TIAA Institute-GFLEC Personal Finance Index (P-Fin Index), which annually assesses financial literacy among U.S. adults and examines the relationship between financial literacy and financial well-being. In addition to measuring overall financial literacy, the P-Fin Index provides an analysis of personal finance knowledge across eight areas in which individuals routinely function. For the first time, the 2024 P-Fin Index also assessed basic retirement fluency, i.e., knowledge that promotes financial well-being in retirement.

According to the Index:

• U.S. adults correctly answered only 48% of the 28 index questions in 2024, on average. This figure has hovered around the 50% mark since the inaugural 2017 survey. Comprehending risk has consistently been the area of lowest functional knowledge. On average, only 35% of these questions were answered correctly in 2024.
• Compared to consumers with a very high level of financial literacy, those with a very low level are twice as likely to be debt-constrained, three and one-half times more likely to be financially fragile, four times more likely to lack one month of emergency savings, three times more likely to be not at all confident in their retirement income prospects, and three times more likely to spend 10-plus hours per week on personal finance issues.

Five questions were used to gauge retirement fluency: knowledge of Social Security benefits, Medicare coverage of healthcare expenses, employment-based retirement savings, ensuring lifetime income, and life expectancy in retirement. Respondents, on average, correctly answered two out of the five questions. Greater financial literacy generally translates into greater financial well-being, and lower financial literacy is generally associated with lower financial well-being, the survey said.

Why financial literacy is important

According to the Marketing Team at AmeriSave, financial literacy is important for American consumers because it equips them with the knowledge they need to make informed decisions when managing and reducing debt. The AmeriSave survey reveals that while 45% of respondents aim to become completely debt-free, and 39% are focused on eliminating high-interest debt, many still struggle with knowing how or where to start. “Knowing the solutions and strategies available to reduce debt can help Americans take meaningful steps toward improving their financial well-being,” the Marketing Team said.

Improving the level of client financial literacy

As advisors take steps to help their clients improve their financial literacy, and ultimately their financial well-being during Financial Literacy Month and beyond, what are some of the steps they can take?

Financial Literacy Month is a great effort on the part of the industry to elevate conversations around money, and to help more Americans make the right financial decisions for themselves, said Brian Haney, CEO of The Haney Company. “For anyone in the financial industry, regardless of the type of practice they run, it’s an opportunity for us to encourage more meaningful money conversations,” he said.

“Money is still ranked as one of the top stressors in the country, and my hope is that financial professionals and advisors of all types will embrace this time and create meaningful content and dialogue to help move more Americans forward,” Haney added.

“Let’s be fearless in asking the hard questions, or discussing the provocative topics, not for shock value, but to demystify some the aura of confusion that surrounds finances. I think advisors should consider building a content and engagement campaign around 1-2 topics they feel the most strongly about, especially ones that seem to trip people up the most, and use that information as not just a marketing campaign, but to improve the larger narrative about money and the professionals in the business of providing help and advice. How can we help more people move the needle financially?”

© Entire contents copyright 2025 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.