The Crucial Leadership Skill Most Leaders Lack: Financial Literacy
Understanding money isn't just for finance teams—leaders who grasp financial literacy make smarter ... More decisions and drive long-term impact.
Leadership is often defined by emotional intelligence. Communication is praised as the cornerstone of building strong teams. Vision is seen as the spark that turns ideas into reality. However, one crucial element rarely gets the spotlight: financial literacy.
Understanding numbers or budgets isn't enough. Effective leaders must make strategic decisions and navigate economic uncertainty with confidence. But above all, they need to empower others to do the same. In short, if you want to lead, you need to understand money—not just for yourself, but for those who rely on your guidance.
Yet financial literacy shouldn't be reserved for leaders alone. Every team member benefits from understanding the financial mechanics behind their work—whether reading a budget or interpreting performance metrics. Financial knowledge builds a more informed and empowered culture when shared across an organization. The problem? Too few people have ever been taught these skills, and many feel overwhelmed just trying to figure out where to start.
'Financial literacy is a human right,' states Dasha Kennedy, author of Moving Beyond Broke. 'But it's been treated as optional instead of essential. And that has to change.'
Recent data confirms that financial literacy in the United States has reached its lowest recorded level. According to the 2024 TIAA Institute-GFLEC Personal Finance Index, U.S. adults correctly answered only 48% of basic financial questions on average, a decline that marks an all-time low since this survey began in 2017. The World Economic Forum, highlighting this study, also reported that U.S. financial literacy has been roughly flat at roughly 50% for several years 'with a 2% drop in the past two years', confirming the slide to a new low.
Meanwhile, economic decisions are growing more complex. Leaders are expected to make calls that impact entire teams and communities. That's where financial literacy becomes more than a personal tool; it becomes a leadership asset.
'Leadership is about helping others move forward,' Kennedy says. 'And you can't do that effectively if you're financially unstable or uninformed.'
She emphasizes that understanding money isn't just about budgets or spreadsheets—it's about confidence. It's about being able to handle setbacks, advocate for fair compensation and create opportunities not just for yourself but for those around you.
Dasha Kennedy, financial activist and founder of The Broke Black Girl, is reshaping how communities ... More approach money—one practical lesson at a time.
Advocates like Kennedy step in to fill this growing knowledge gap, translating complex finance into practical, relatable guidance.
As a single mother navigating financial hardship and limited resources, Kennedy realized that most personal finance advice didn't reflect her reality—or the reality of millions of others. So, she created The Broke Black Girl, a digital platform that now reaches almost half a million women with practical, culturally relevant financial education.
Kennedy offers practical strategies grounded in real-life experiences, making it easier for others to take control of their finances and build long-term stability. What sets her strategies apart is she doesn't shame. She empowers.
'People think improving your finances means making drastic changes,' she says. 'But real growth is about consistency. Even small steps count if you take them consistently.'
Kennedy continues, 'One of the biggest misconceptions is that knowledge alone can close the wealth gap. But access matters. Fair wages matter. Opportunities to build wealth matter.'
Financial literacy is a skill; like any skill, it can be developed with consistent effort and the right resources. Here's how leaders can level up their own knowledge and create a more financially confident team in the process:
Before guiding others, leaders must assess their own financial understanding.
You don't need to become a financial expert overnight. Begin with manageable habits:
Financial literacy shouldn't stop with leadership. Empower your team to understand the financial systems behind their work.
Break the taboo around talking about money at work. When people understand the 'why' behind financial decisions:
At its core, Kennedy's message is clear: financial literacy isn't reserved for economists or CFOs. It's for everyone and especially important for those who want to lead, whether in their homes, companies or communities.
'Start now. Start small. Just start,' Kennedy concludes. 'You don't have to know everything to begin. But you do have to begin if you want to lead.'
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