When most people hear the word “literacy,” they think about it in terms of having the ability to read and write. And rightfully so. That is the classic definition of the word, and the topic receives a great deal of attention in the education world. The ability to read, write and comprehend subject matter is the foundation on which lifelong learning is built and sustained. Without it, a person’s opportunities in life are severely limited.
But literacy also means to have competence or knowledge in a specified area, and when it comes to the skills one can learn in life, few are more important than learning and understanding the basics of personal finance and establishing a strong foundation on which to make sound money decisions.
That’s why the Tennessee Bankers Association worked with the state legislature in 2019 to establish Tennessee Financial Literacy Week. Banks will be making presentations to classrooms, senior citizens centers and other groups and will be supporting organizations that help build financial literacy.
It is a topic that is near and dear to my heart. I have long been involved in efforts to improve financial literacy, not only in my work as a banker but also through my involvement in the Tennessee Financial Literacy Commission, which was established within the state treasury department.
As this year’s TBA chairman, I am extremely proud of the work banks across the state have done to help improve financial literacy in their communities. It is something banks do throughout the year as one of the many ways they give back to the cities and towns they serve. But for one week each year, the TBA and its member banks put a collective emphasis and spotlight on their efforts as a way of raising awareness about the need for continuing financial education.
Tennessee already has become one of only 23 states that require personal financial education as a requirement for high school graduation, and that is an acknowledgment of its importance. But all of us who have the ability and opportunity to reinforce good money-management skills need to join in.
That can start with teaching younger children the benefits of saving part of their allowances or gift money for something bigger down the road. Guidance can be given to teenagers on how to handle having paychecks for the first time. Young adults may need help learning about auto loans and credit, the importance of starting a 401(k), and saving up for a down-payment on their first homes. Seniors need to be alerted to the latest evolutions in scams, especially on the internet and text messages.
These are some of the obvious groups that can benefit from having a better understanding about money and finance, but the need for increased financial literacy is not limited to them. Even knowledgeable adults can feel overwhelmed when they face unfamiliar financial situations. And business owners, especially those just starting out, often find themselves outside of their areas of expertise when it comes to making smart financial decisions.
When it comes to your finances and protecting your hard-earned money, my advice is to look for ways to become more savvy, more strategic and more confident. Support efforts to improve financial literacy for those who need it. And don’t hesitate to ask for help. Your local bankers can be valuable resources, not only for you personally but also in preparing you to help others. Doing so may be one of the best investments you’ll ever make.
Chris Holmes, president and CEO of Nashville-based FirstBank, is chairman of the Tennessee Bankers Association.