By Paul Taffe
Each April, Financial Literacy Month offers an important opportunity to educate consumers on the fundamentals of personal finance – from how checking accounts and credit cards work to how to establish a basic household budget.
Financial literacy is a critical topic for all banks and financial institutions. It is part of what our colleagues do every day – help customers purchase a home, pay for college, plan for retirement and grow their businesses. We believe that well-informed citizens are critical to the overall health of our communities.
Federal Reserve Chairwoman Janet Yellen recently spoke about the importance of financial literacy training in creating strong household finances, which contribute to the growth and stability of our national economy. She said, “Whenever I am asked what policies and initiatives could do the most to spur economic growth and raise living standards, improving education is at the top of my list.”
All too often, individuals lack the financial skills to successfully manage their money – something with the potential to bury them in mountains of debt for years to come. Studies show that less financial knowledge leads to less financial stability over a lifetime.
The Retirement Confidence Survey, for example, shows that only 21 percent of workers expect to be able to afford a comfortable retirement based on their current contributions, and, on aggregate, fewer than half of workers are taking basic steps to prepare for retirement.
Our own research shows that many consumers have questions about the core financial challenges they face today, but many think they don’t have the ability to tap into the expertise they need. The good news: They’re not in it alone.
Banks can offer the kind of financial expertise these consumers desperately need, but don’t realize is available to them. We are in a unique position to help consumers better understand their finances. Financial advice on everything from saving for retirement to financing an education to even managing budgets is as close as the local bank branch.
There are also nonprofit organizations that can help. This year alone, our Citizens Helping Citizens Manage Money program will improve the financial education of more than 260,000 Americans by supporting financial literacy initiatives at 80 local community organizations, which includes $1.4 million in donations to nonprofit partners and volunteer outreach by Citizens Bank colleagues.
April is Financial Literacy Month, but our commitment to helping improve the financial skills of individuals and businesses across our bank’s footprint is year-round. We encourage consumers to improve their financial education by talking to their banker, visiting our website or contacting a local nonprofit that offers financial counseling.
We know that money doesn’t come with instructions, but believe that when consumers are educated, they have the confidence and knowledge to make informed financial decisions for themselves, their families and their futures.
Paul Taffe is New York president of Citizens Bank.