Insights


Why Financial Literacy Would Have Been Lost on My Younger Self

Properly executed financial literacy, financial wellness - or whatever you want to call campaigns that aim to prevent people from making poor choices with their money - are a tremendous benefit. However, traditional programs can have difficulty attracting an audience. Back when I needed it the most in my 20s and 30s, there is not a snowball’s chance I would have engaged with such a program.

Why? Well, I had no desire to do anything but spend my money back then - it came and it went just as quickly! Thankfully, I worked at a retirement firm, so at least I did save for that. But financial literacy or wellness? That was the furthest thing from my mind. I was not financially “unwell,” and, even if I was, who wants to admit they need help? I was single, had a good job, and was having the most fun I had in my entire life! For me, the money would always be there, until, of course, it wasn’t (thanks to spending well beyond my means).

But do you know what might have resonated with me? Someone who tapped me on the shoulder and said the following:

“Hey there, I noticed that you like to have fun. But would you like to be financially independent someday and have all the fun you want? Don’t worry, I don’t want you to give up your lifestyle entirely, just make a few small changes that will have a HUGE positive impact on your future fun. First of all, you know all that stuff you need, like groceries, beer, etc.? I am going to introduce you to some programs that are easy to use and will help you save tons of money on all the stuff you buy anyway! All you have to do is promise that you’ll save every dollar of the money you “earn” from these programs - you didn’t have that money before in the first place, so it’s not like you’ll miss it! And about those trips to the casino, what if I told you that you can “win” far more than you likely will ever win at gambling by just taking what you gamble and investing it in a low-cost index mutual fund? Don’t believe me? Let’s start by taking half of what you gamble and investing in that fund. Gamble the other half and see which side is ahead in six months. If the investing is ahead, you stick with it, okay? And finally, do you have any junk in your house that you don’t use anymore? Let’s sell that, invest the profit and have even more funds for future fun!”

These suggestions, which were easy to implement, offered immediate results, and had minimal impact on my way of life, would certainly have piqued my attention more so than a traditional financial literacy or financial wellness program!

The lesson here for retirement plan sponsors? When establishing a financial wellness program to help people save for retirement, think outside the box to ensure that the program is simple and attractive to the individuals for which it is intended.

Do you think that there are a lot of people out there, who could benefit from financial wellness programs but are difficult to engage? What have you been doing to reach them? Let me know on Twitter or at info@cammackretirement.com.

Note: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.

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