Financial literacy – knowledge is power
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Article by
Kendra Erkamaa, CEO & Financial Advisor Triangle Financial Services, Inc.

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Unfortunately, financial literacy rates have dropped nationally since the Great Recession of the late 2000s. According to the Financial Industry Regulatory Authority (FINRA) Capability Study (, which shares financial literacy ratings by state, Iowa scores near the national average for spending and savings habits. For example, only 46 percent of Iowans reported having a “rainy day fund” in 2018 compared to the 49 percent national average. A rainy day fund includes a savings of at least three months’ worth of money to cover expenses in case of an emergency.

Investopedia defines financial literacy as “the education and understanding of various financial areas, including topics related to managing personal finance, money and investing.” This includes managing personal financial affairs and making appropriate decisions about investments, insurance, real estate, college tuition, budgeting, retirement and tax planning.

Why is financial literacy important? Financial health is a catalyst for stability, security and peace of mind. And when you feel safe and secure, your mental focus is better able to shift from surviving to thriving.

In a broader sense, financial literacy is important to the health and stability of our communities, economy and country. The more households with improved financial literacy, the better we are able to care for ourselves and those around us.

Keys to increasing financial literacy:

  • Know your numbers. Starting with your income and expenses, you need to know how much you earn and your monthly expenses so you can wisely determine how much you can save each time you earn.
  • Make savings/wealth building a necessary fixed expense. It’s simple – spend less than you earn. Automatically designate an amount to save from each paycheck before you spend any of it.
  • Start (and retain) a “rainy day” fund. This fund is separate from savings. Your rainy day fund would ideally include approximately 6-12 months of savings to cover monthly expenses if you are unable to work. Saving for a rainy day, plus a regular savings habit, will provide you with some resiliency and ease of mind.
  • Know your limitations. Ask for financial literacy help when you need it. As with learning to read, becoming proficient in financial knowledge can take time. Learn as you go and ask for professional support when you are not sure. That’s what we’re here for!
  • Practice makes perfect – or at least better! Habits don’t get established in a day. Start practicing healthy money habits and be intentional in continuing to grow them every day.

In September, dozens of local organizations will meet for the second time at the Collaboration for Economic Inclusion and Financial Capability Forum. These groups are exploring ways to increase financial literacy in Iowa, and the Triangle Financial team is proud to be participating.

If you’re curious about your own financial literacy, check out our Facebook page or website for a financial literacy test. As always, cheers to your financial health and wealth from the Triangle Financial team!

Kendra Erkamaa, CEO & Financial Advisor

Triangle Financial Services, Inc.

Securities and Advisory Services offered through Harbour Investments, Inc.