Jaime Leverston is CEO of Hut 8 Mining.
Currently, financial literacy rates across the population are frighteningly low—and trends suggest the next generation could be even worse off in their financial understanding and confidence.
Recent research from Ipsos for Money Matters found that just under two-thirds of Americans (64%) are financially literate. And in a financial literacy study (download required) by the TIAA Institute and the Global Financial Literacy Excellence Center at George Washington University, 37% of Gen Z respondents could answer 25% or fewer of the financial literacy questions correctly. The emergence of new asset classes, like digital currencies, further cloud comprehension.
Individuals who lack financial literacy may make poor financial decisions, such as taking on high-interest debt or not saving for retirement. These decisions can have long-term consequences, such as economic hardship and bankruptcy. For business leaders and employers, closing this gap matters as well. It’s a critical step toward promoting financial stability and success for individuals and society—and financially astute team members and employees, in turn, can become the foundation for resilient and financially sound organizations.
The Case For Business Engagement
Successful business leaders and founders are especially well positioned to help close these knowledge gaps. From budgeting and payroll to risk management and fundraising, they have an authentic perspective on the importance of financial literacy for future success. This credibility makes them ideal for educating and connecting with young people.
Unlock Innovation And Empower Entrepreneurs
By increasing the financial literacy of the next generation, business leaders and founders can unlock new talent pipelines and innovation and help more people be able to start, fund and sustainably run businesses.
Financial literacy means having the economic confidence to understand how to finance a business, explore venture capital support, manage cash flow, and build sustainable businesses. By supplying the necessary risk management skills and market knowledge to develop entrepreneurship and realize business opportunities, this financial foundation could lead to the next generation of new companies and technologies. Shark Tank investor and entrepreneur Mark Cuban has advocated for increased financial literacy and education for the next generation of entrepreneurs—but you do not have to be a billionaire or best-selling author to make a real and profound positive impact on the financial literacy gap for the next generation in your community or industry. Here’s how you and your team can make a difference.
Investing In Financial Education Programs
One of the most effective ways business leaders can help grow financial literacy is by investing in financial education programs. This could involve partnering with schools, community organizations or other educational institutions to supply funding, resources or in-house expertise for after-school programs, financial literacy workshops or online courses.
Offer Financial Education Resources And Tools
Business leaders can also offer resources and tools to help young people learn about personal finance. These could include creating educational materials such as brochures or online tutorials, sponsoring learning events, or creating access and encouraging engagement with financial planning tools like budgeting apps or investment calculators. By providing and supporting the distribution of these resources, business leaders can empower young people to take control of their finances and make informed decisions by meeting them where they are.
Provide Mentorship And Guidance
Business leaders can also mentor and guide young people interested in learning about personal or business finance. Be a speaker, volunteer as a mentor for a financial education program or accelerator, or offer advice and support to young people starting or running businesses.
Bring Financial Education Into The Workplace
Employers can also offer employees access to financial education and tools. This could involve offering employees financial education workshops or seminars or integrating financial education into the company’s onboarding or professional development programs.
By incorporating future financial education into the workplace, business leaders and founders can also create knowledge ambassadors who can pass that knowledge on to siblings, kids or friends. For instance, our team offers a tool for employees that is geared toward educating our employees to become more financially astute.
Leverage The Network Effect
Business leaders and startup founders have vital ecosystems and communities that they can engage in to support the above programs and use the network effect. Similarly, they can use their social media platforms and other marketing channels to promote financial literacy initiatives and raise awareness about the importance of financial education.
Investing in the next generation’s financial literacy is a smart business move for leaders and founders, as it can help build a strong pipeline of financially savvy employees and customers.
Closing the financial literacy gap in the next generation is critical to promoting financial stability and success for individuals and society. Business leaders and founders can play a vital role in this effort by investing in financial education programs, partnering with educational institutions and community organizations, and prioritizing financial literacy in their businesses and leadership practices. In doing so, they can make a positive and lasting impact on the next generation.
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