At our company’s recent annual 401(k) education meeting, a young team member raised her hand for more information, saying she was “trying to learn to be an adult.” I chuckled but applauded her because managing finances is a critical skill for everyone. During Financial Literacy Month in April, it’s a good time for businesses to consider how to support employees’ financial health -- and this year it is more important than ever.

The pandemic has exacerbated Iowans’ financial vulnerability and stress. Unfortunately, even before the pandemic the majority of Americans were not planning ahead for the financial future. Now financial fragility has increased nationwide, and Iowa is no exception. A recent United Ways of Iowa/UNI study about COVID’s impact on Iowans found the pandemic has unevenly affected Iowa families and highlighted the financial vulnerability of many Iowa households.

While many Iowans are now living on the edge, even Iowans with means lack basic financial skills or knowledge, according to Financial Industry Regulatory Authority reporting. Gaps in financial literacy and readiness are even more pronounced for women and individuals from marginalized communities. 

Why does financial literacy matter to businesses? If Iowa is to have a strong workforce and economy, financial literacy is key and employers have an important role to play. A 2021 John Hancock study indicated financial stress is “top of mind’ for 64% of employees and 86% of employees turn to their employers for financial information or wellness programs; more than half of workers reported that if they had more financial education, they would be able to save more for retirement.

I asked several local leaders in the financial services industry: “Why is financial literacy so important to Iowa and Iowans?” 

Bailey Davis, investment officer, BTC Financial Services: Financial literacy begins with helping people better understand how credit, debt and saving all impact their financial situation. But the long-term impacts are far greater. By placing more emphasis on financial literacy, we can break down socioeconomic barriers, create generational wealth and help future generations be successful.

Kenia Calderón Cerón, vice president/bilingual business development director, GreenState Credit Union: Financial literacy is crucial to ending predatory lending practices in Iowa. Unbanked and underbanked communities are subject to predatory practices from payday lenders and check cashing businesses. We can combat these harmful practices by equipping Iowans with the knowledge and resources needed to achieve their financial well-being.

Brittany Heard, lead adviser, Foster Group: Understanding your financial situation is the first step toward achieving your financial goals. Not many people know their monthly income versus expenses, which is important in the financial literacy process. Armed with this understanding, you can start to achieve the financial life goals most important to you.

Deniz Franke, private wealth adviser, Franke Miller Group, a private wealth advisory practice of Ameriprise Financial Services Inc.: Financial literacy is critically important, especially for women and underrepresented communities in Iowa. One of the keys to success is appropriately educating younger generations starting at an early age. It is vital for employers and advisers to help ensure future generations have a comfortable, working knowledge of the basics of finance, the meaning of money, and the pros and cons of debt.

Jo Christine Miles, director, Principal Foundation and Principal Community Relations: Financial literacy is important because it is liberating and promotes well-being for individuals, families and communities. Financial literacy helps us make informed, effective decisions regarding our money, which in turn frees us from the stress that mismanaged finances causes. Without stress, and other accompanying negative emotions, we are free to dedicate our resources – time and treasure – toward productive efforts that support our families and communities.

Financial literacy is important for all Iowans so we can live productive lives. Now more than ever, business leaders can play a vital part in providing financial education to help  team members plan for today, and tomorrow.