Broadcast Retirement Network’s Jeffrey Snyder discusses the most recent financial literacy survey conducted by The SPARK Institute with Snezana Zlatar and Tim Rouse.
Jeffrey Snyder, Broadcast Retirement Network
Tim Rouse, Snezana Zlatar, always a pleasure to talk to you both. Thanks for joining us this morning.
Snezana Zlatar, Redwood Consulting, LLC
Thanks for having us, Jeff.
Jeffrey Snyder, Broadcast Retirement Network
Good morning. Yep. And I know this is a very important topic, financial literacy.
SPARK has really taken the lead, as far as I can tell, in the retirement industries, Tim. Financial literacy is important, but why is it important for SPARK and its members?
Snezana Zlatar, Redwood Consulting, LLC
Great question, Jeff. So we’re going on our fourth year in April with the establishment of our Financial Literacy Committee. And most of our members, a lot of our members, have had programs in financial literacy for many years.
And what we did was we brought those members together to see if we couldn’t get sort of a force multiplier or economies of scale out of all the work that they’re doing. And why is it important? Well, it’s important for a couple reasons.
One is if the American workforce is already prepared with a basis in financial literacy when they come into the workforce, then we’re in a better position to help them save. And also, it’s easier to build on a good foundation of financial literacy than it is to correct bad habits that were established prior to them coming into the workforce.
Jeffrey Snyder, Broadcast Retirement Network
Yeah, that makes a lot of sense. I mean, Snezana, I learned a lot of bad habits in general, really hard to change. My wife often argues with me about some of my bad habits.
But Tim makes a really good point. Establishing good financial literacy principles early will make a difference.
Tim Rouse, The SPARK Institute
Absolutely, Jeff. I would say that financial literacy really has proven to be the foundation for individuals’ prosperity and financial success later in life and retirement and that is dignified and lived according to one’s wishes. So to that end, we are focusing very much on understanding what young people know about personal finances.
And we recently released findings from our third annual study with Corporate Insight. We surveyed nearly 3,000 high school students, college students, and recent hires about financial and retirement literacy. And one of the most important findings is that the household in which you grow up shapes your financial future more than anything else for young people.
Namely, students from college-educated or higher-income families have consistently showed through this survey much stronger financial knowledge, much healthier savings habits, and greater confidence. At the same time, young people from lower-income households or families that don’t have college degrees reported higher financial stress, lower savings rate, less access to formal financial education. So in other words, kids from lower-income households often don’t receive the same foundation and they enter adulthood already behind when it comes to that financial knowledge.
So it’s important to say that this gap is not about the ability of these young people. It’s about access or lack thereof to credible sources of financial information that can really help them increase not only the knowledge but also their confidence in making sound financial decisions. Yeah.
Jeffrey Snyder, Broadcast Retirement Network
I mean, anecdotally, it’s logical. It makes a lot of sense. Are we making progress, though?
I know there are many states that have enacted financial literacy curricula. I think I’m using that word correctly. Curricula in high schools.
Are we making enough progress or is it still going slow and we need to do a better job?
Tim Rouse, The SPARK Institute
Well, I think as an industry, together with our plan sponsors, employers, we certainly have still a lot more work to do, continue to support this expanded personal finance education in high schools and in colleges. But really, the good news is that at this point in time, 40 states have introduced personal finance courses either as a standalone course or as a component of another economics course, which is a great sign. Again, some of those legislations at the state level will be enacted over the next couple of years.
So we believe that we’ll see those results in the near future.
Jeffrey Snyder, Broadcast Retirement Network
Yeah. I mean, honestly, from my own personal opinion, not sparks, I don’t see why this wouldn’t be something in all 50 states and the other territories. But hey, that’s just me.
I guess it just takes a little bit of time. Tim, financial literacy, obviously, an important part of the curriculum today in school, people learning. You see it in the results.
This has caught the attention of the U.S. Treasury Department. Want to talk a little bit about an upcoming event that you have, you and Snezana and Spark will be hosting?
Snezana Zlatar, Redwood Consulting, LLC
Well, thanks, Jeff. Yes. So last year, the work that Snezana and her committee did and the results that were published in a press release caught the eye of Secretary Scott Besant, and his team had reached out to say that it’s actually a very high priority on the Secretary’s list.
He actually has it on his website. Financial literacy is being a major focus for him personally. And he has expressed his own personal experience growing up.
And so we’re thrilled that the Secretary has reached out. And we’re looking at an event to kick off financial literacy month, which is April. So just prior to that, we will have an event.
The Secretary has indicated that he will participate in the kickoff event. So we’re thrilled to have that voice help broadcast out to the American public our focus on financial literacy.
Jeffrey Snyder, Broadcast Retirement Network
Yeah. Snezana, I mean, it always helps to have it. I mean, Tim is a heavy hitter, and a lot of the Spark members are heavy hitters, but the Treasury Secretary, that’s a heavy hitter.
So it helps to have this, in all seriousness, this megaphone blasting it out. I’m so glad that he is so passionate about financial literacy. Yeah, we’re thrilled.
Snezana, do you want to comment on that? I’m sorry.
Tim Rouse, The SPARK Institute
Yeah, no, absolutely. I would just say that there is so much room for still for this public-private partnership in this space to move things forward. And it’s great to have the support from the Treasury Department and the Secretary of Treasury as well.
And we are looking forward to this event that will engage our members as well as members of congressional leadership and so forth. So more to come on that front.
Jeffrey Snyder, Broadcast Retirement Network
Yeah, absolutely. I mean, look, you got to be a lifetime learner in everything you do. Financial literacy, even for us older, mature folks, we still need to remember some of the things.
If you haven’t bought a house in a while or a car, there are things maybe you need to remember that maybe you didn’t. So learning, it goes on for a lifetime. Tim, Snezana, always great to see you.
Great work as always. And look, we look forward to having you back on the program again very soon.
Snezana Zlatar, Redwood Consulting, LLC
Thanks, Jeff. We’re always thrilled to be here. Thank you.
Jeffrey Snyder, Broadcast Retirement Network
Thank you, Jeff.