CPAs and financial literacy month

Posted on Monday, April 29, 2019 by Abby Draper

Room with desk and wide bookshelf along the back wall.

By Rebecca Kerr, OSCPA communications intern

April is National Financial Literacy Month, which is a time often greeted with disappointed head shakes rather than a celebration. As many are aware, overall financial literacy in the U.S. is sorely lacking among both teenagers and adults. Many students go through all stages of school from kindergarten through college without taking a single financial literacy or economics course and the consequences are great.

Some notable remarks pulled from an AICPA article titled “CPAs play a leading role in financial literacy,” include the following:

- “40% of all Americans can’t cover a $400 financial emergency without borrowing money or selling something.”

- The Great Recession “created a generation of Americans who are likely to be worse off financially than their parents.”

- “A recent AICPA survey found that the percent of Americans following a monthly budget has declined from 58% in 2015 to 39% in 2018.”

- “The percent of Americans putting less money on their credit card now compared to before the recession has decreased from 50% in 2015 all the way down to 30% last year.”

To help combat this widely held issue, James Schiavone, author of this AICPA article, recommended a couple different steps that can be taken by CPAs in particular. He suggested encouraging your clients to facilitate financial conversations early and frequently with their children, covering topics such as budgeting, saving and student loans.

Another tip he gave CPAs is to encourage clients who might be freshly in the workplace or have children who are to be aware of the possible financial employee benefits present through their employer and taking advantage of them.

Here are a couple more financial literacy statistics from U.S. News and the National Financial Educators Council in the spirit of National Literacy Month:

- “1 in 5 teenage students in the U.S. lacks basic financial literacy skills, according to the Program for International Student Assessment, or PISA.” (U.S. News)

- “54% of student loan holders didn’t attempt to figure out their future monthly payments before taking out their future monthly payments before taking out their loans, according to GFLEC.” (U.S. News)

- “Among adults responding to a national survey, 20% have been offered and have participated in financial education, according to the FINRA’s Financial Capability in the United States 2016 report.” (U.S. News)

- “Nationwide testing demonstrates that the average person lacks the basic financial knowledge he or she needs to make qualified financial decisions. The average adult taking our basic financial literacy test scores just under 71% while the average scores 61%.” (quote from Vince Shorb on the National Financial Educators Council website)

With these concerning statistics, people who are financially literate (like CPAs) must do their part to assist those who aren’t. As mentioned previously, encourage others to present the importance and how-tos of financial literacy or present it yourself. If we want to prevent young people from being swamped with debt well into adulthood, we need to act now.

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