Nearly everyone can use lessons in financial literacy, and Dan Iannicola Jr., deputy assistant secretary for the U.S. Treasury Department's financial education office, provided suggestions on how women accountants can educate their clients.
"The marketplace is increasing the number of choices," he said, speaking at the Joint National Conference, a three-day event coordinated by the American Woman's Society of CPAs and the American Society of Women Accountants. "[But] even though choices have increased, knowledge has stayed the same. Our choices have outpaced our knowledge."
Iannicola gave a brief overview of the key issues affecting financial literacy:
- General saving: In 2005 the U.S. personal savings rate was -0.5 percent. The reason for this, said Iannicola, was because people get more messages to consume than save. Instead of talking to people about budgeting, he offers people a way to develop a spending plan.
- Home ownership: Foreclosures have risen sharply in the U.S. due to people not knowing what they are signing and their lack of awareness of the complex process of purchasing a home.
- Retirement savings: Thirty-one percent of employees between the ages of 18 and 35 participate in their employer's retirement contribution plan, according to Iannicola. The reason? "Many young people do not see the advantage of saving for retirement," he said.
- Credit: Consumers with good credit ratings pay $250,000 less in interest payments over the course of their work life than people with bad credit, according to Iannicola.
- Consumer protection: Nearly 10 million people in the U.S. are victims of identity theft. Iannicola said the best way to prevent this is through better consumer knowledge.
- Investor protection: Forty percent of investors say they know what they need to know to make good decisions. Iannicola pointed out, however, that it's those with a little bit of investing experience - usually men - who are the ones most susceptible to scams or fraud, because they exhibit confidence and sometimes arrogance in their decision-making.
- Taxpayer rights: The Internal Revenue Service estimates that nearly 25 percent of people who qualify for a tax credit don't claim that credit because they aren't aware it's there.
- The unbanked: Iannicola said that nearly 10 percent of American families don't hold a transaction account at a depository institution. He blames this on a lack of trust in financial institutions, lack of knowledge and cultural differences.
- Multicultural populations: Minority populations tend to have lower rates of home ownership, as well as lower rates of financial services in general, Iannicola said. Language barriers often create challenges, he noted. As a result, his office is reaching out to African American, Asian American, Native American and Latino communities.
- Kindergarten through post-secondary financial education: Iannicola calls this "the big enchilada." High school seniors received an average score of 52 percent when tested on financial literacy in 2006. He points to a lack of parental support as a major reason, forcing young people to learn by trial and error.
For more information on the U.S. Treasury's financial literacy programs, go to
