You already know that financial illiteracy is a growing and widespread problem in the United States.

A 2017 survey conducted by Stash, a digital investment firm, concluded that Americans are confused and uninformed about basic financial concepts. The Stash survey builds on a 2015 FINRA Financial Investor Education Foundation study that gave two-thirds of America failing grades on its national Financial Capability Test.

Stash constructed a short quiz assessing knowledge of basic financial concepts like interest rates, investment and compounding interest. The answers reveal that we are no better off than we were two years ago. Stash surveyed its users and the general population, compiling 27,000 responses. Here are some of the more startling takeaways:

  • 16% of people prefer a higher (vs. lower) interest rate on their loans
  • 38% of those surveyed don't know how compounding interest works
  • 40% of people don't understand how inflation works
  • 41% of people don't understand diversification and its advantages

Educating the Next Generation

When asked how financial illiteracy might be remedied, experts often point to financial advisors. But if Americans lack a fundamental understanding of financial terms, they need financial education before they are ready to seek the help of a financial advisor. That's where financial institutions can come in.

Content marketing is a perfect vehicle for providing financial education. By publishing keyword-rich, value-added content that educates your audience on financial principles you accomplish many goals simultaneously.

  • Help foster financial literacy and wellness within your target markets
  • Establish yourself as trusted resource for financial expertise
  • Leverage search engine marketing and social media to drive readers to your content
  • Guide existing and potential clients to conversion by using content to position your products and services

Financial institutions will need to keep pace with the unique needs of the youngest generation – who are no better informed than their elders, but bring a different set of expectations when it comes to content.

A graduate student at the University of Illinois judged that only 22 percent of study participants (aged 18-24) were financially stable. Those who attained “stability” had better financial planning and management skills, had accounts at mainstream banks and steered clear of costly financial services such as payday lenders.

What differentiated the financially precarious participants from their peers was that they had less financial socialization, defined by the researchers as formal or informal learning about financial concepts and responsible money-management.

What we also know is that financial learning has the greatest impact when it happens close to the time of decision-making. The longer the time-lapse from educational intervention to the financial decision becomes, you begin to see diminishing returns. So, while parents and schools can certainly help educate our youngest generation, banks and credit unions have the unique opportunity to influence smart financial behavior through promoting financial literacy.

3 Ways to Reach Gen Z

Real People, Real Talk

Gen Z has grown-up learning from peers and influencers on YouTube. They trust real people, maybe even over institutions. While it’s important to deliver accurate financial education, there’s no reason it can’t be delivered by an actual person telling their actual story. A real college graduate explaining their struggle to repay college debt might have more impact than an article full of stats. For the best of both worlds, intersperse storytelling with factual information in a video.

Understand and Reflect Gen Z Values

Generation Z trusts and interacts with brands that share their values: sustainability, equal representation, rebellion and humor. Some of these – rebellion and humor – might feel at odds with financial education. Challenge your preconceived ideas of learning and imagine what a funny and irreverent approach might be. Is saving actually an act of rebellion in a throw-away society? Winning approaches will be bold, creative and values-based.

Digital Digital Digital

Generation Z does not know a world without the internet or mobile devices. They are true digital natives and demand digitally native experiences. What does that look like, exactly? User experience (UX) is hugely important. Gen Z never had to wait for a modem to dial up, or a page to load or use a Blackberry. They grew up using best-in-class digital platforms on fast, efficient and user-friendly devices. So ensure your education has a mobile-first design and slick usability. These users are also social savvy, community minded and culturally diverse. Provide experiences that allow for sharing, interaction and customization.

Need help translating financial education for a unique audience? Bluespire can help with that. Reach out to [email protected] for help.