The Importance of Financial Literacy

1.    April is National Financial Literacy Month. What are some tips you would recommend for small business owners to stay on top of their businesses?

One of the best pieces of advice is not forgetting that as a small business owner and an employer, the health of your business is also tied to the health of your employees. As a result, encouraging your employees to be financially healthy is a way to help ensure the health of your business. Encouraging conversations and helping provide resources ensures that your employees have what they need to be secure in their financial health.

2.    What are some of the key barriers in the way of Americans getting a sound financial education?

Some of the key barriers are not around a lack of access to information, but rather knowing where to turn for good information. There exist many tools out there that have resources that teach the basics of personal finance. We must also note that another of the key barriers in the way of providing a sound financial education to Americans is that courses are not required to be taught in many states and schools.

As I noted prior, for a small business owner, I think it is important to know that there is a significant role you can play in providing resources to your employees. There is no shortage of high-quality, free resources available, and the benefit of doing so cannot be understated.

3.    Are there ways the private sector can help or does the government need to take on a larger role in teaching financial literacy?  

We at VISA, through our 20 years of providing free financial education programs, resources and tools to consumers, government, non-profits and our clients, have found that the most successful approach is one that involves both the public and the private sector. It is through public-private partnerships that the most effectual programs are developed and run. It takes a village for financial education to be successful and delivered.

4.    What groups are most affected by a lack of financial literacy, and what resources exist to help them?

Most clearly, everyone. Financial education and understanding how to manage your money and feeling empowered to do so, whether you have 1 dollar or 1 million dollars, is important to everyone. Security, safety and well-being are all closely linked to it, and it is universal.

In terms of resources, I would first tout our own resources. VISA’s free, purely educational programs like Practical Money Skills for Life, have a lot of high quality resources. There also exist many that are tailored towards community and class educators, such as the Jump$tart Coalition for Personal Financial Literacy and the CFPB.

5.    What role does VISA play in promoting financial literacy and inclusion?

Providing and championing financial education is part of VISAs DNA, because promoting economic growth is at the core of our business. Educated consumers are better consumers, and that is why we have been committed to financial education for 20 years. We also fundamentally believe that the most important tool is not a product, but rather knowledge. This is why we have been committed to creating free, impactful, quality educational programs through partnerships with clients, governments, consumers and educators.

6.    How is VISA going to celebrate Financial Literacy Month? 

We are convening in partnership with the Federal Reserve Bank of Chicago our 10th annual Financial Literacy Summit. This event brings together central bankers, senior financial services executives, educators, researchers and non-profit leaders from around the world to provide information regarding the best processes, opportunities and challenges in financial education and capability building.

7.    What are some simple lessons you can pass along to someone looking to be more aware of how they spend their money?

A couple of very basic but crucial things. Firstly, its never too early or too late to take control of your personal finances and work to change your behavior. Secondly, it truly is the basics that are the most important. Start with creating a budget and learning how to spend less than what you bring in. Once you do that, work to create an emergency or rainy day fund to provide stability. These basics are the most important and often what get folks into trouble most often.