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Breaking the Barrier: Part 4 - Are You Financially Literate?


We want to conclude our Breaking the Barrier Series by engaging our readers with a simple question: 

                                              How Financially Literate are You?

I'm sure all of us in the U.S. think we're financially literate. But what does that really mean?

The fact is, we all could use more financial education. Statistics and facts on this topic don't lie. 

1) 44% of Americans don’t have enough cash to cover a $400 emergency.
2) 43% of student loan borrowers are not making payments.
3) 38% of U.S. households have credit card debt.
4) 33% of American adults have $0 saved for retirement.


Can you include yourself and your family in one or several of these statistics? 

The Global Financial Literacy Excellence Center's mission is to study and provide insights on how we all can reduce global financial illiteracy. In doing so, they created the "Big Three"—which have now been used in more than twenty countries to measure financial knowledge. In comparing the results of these findings, it is clear that global financial literacy is still a problem, with it peaking at middle age and with women consistently scoring lower than men. 

Take the Big Three yourself and gauge your family's financial literacy:

1) Suppose you had $100 in a savings account and the interest rate was 2% per year. After five years, how much do you think you would have in the account if you left the money to grow?

 More than $102**

 Exactly $102

 Less than $102

 Do not know

 Refuse to answer


Answer: More than $102. 

2) Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After one year, how much would you be able to buy with the money in this account?

 More than today

 Exactly the same

 Less than today**

 Do not know

 Refuse to answer


Answer: Less than today. 

3) Please tell me whether this statement is true or false. “Buying a single company’s stock usually provides a safer return than a stock mutual fund.”

 True

 False**

 Do not know

 Refuse to answer


Answer: False.

How do we solve it? That's a complex question, with complex answers. The short answer is that we are all responsible for our financial literacy, but we need organizations worldwide—who are tasked with financial literacy as part of their mission—to continue to make it a priority in all their programs. 

See how the World Council, through one of its programs, is working toward reducing financial illiteracy. 

Take a deeper dive into the global issues contributing to financial illiteracy to find out who is primarily affected and the steps we can all take to change it for the good of our communities, our families and ourselves.

Two key reports detail global findings on financial illiteracy and another provides solutions on how to solve it. (Hint: Financial Education)

Financial Literacy Around the World

Financial Literacy and the Need for Financial Education: Evidence & Implications

Credit unions worldwide are a catalyst for financial inclusion, with financial literacy and education being a key tactic to achieving inclusion fully around the world. Ask yourself this: 

Is my credit union doing enough to provide financial education to our members, our community?

Mike Reuter is the Executive Director of the Worldwide Foundation for Credit Unions, the 501c3 charitable nonprofit that supports the World Council of Credit Unions in its mission of providing financial inclusion to millions worldwide by offering tools and engagement experiences to credit unions looking to do “Global Good” through the credit union movement. Connect with Mike at mreuter@woccu.org.



Author: Mike Reuter
World Council of Credit Unions
E-mail: mreuter@woccu.org
Phone: 608-395-2047


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