Money

Financial Risk Understanding Remains a Critical Challenge Across All Generations

In 2025, the TIAA Institute-GFLEC Personal Finance Index revealed a significant knowledge gap in understanding financial risk among U.S. adults, with only 36% answering questions correctly. This marks the lowest score across all eight categories surveyed and shows a decline since 2017. Every generation, from Gen Z to the Silent Generation, struggles with grasping risk, which affects decision-making in insurance, debt management, savings, and retirement planning. The consequences of this misunderstanding are substantial, leading to financial fragility, increased debt constraints, and limited emergency preparedness. Despite its importance, comprehension of risk does not improve significantly with age, indicating a systemic lack of education rather than a lack of experience.

Rising Financial Vulnerability Due to Risk Misunderstanding

In the current financial landscape, understanding risk remains elusive for many Americans. According to recent data released in early 2025, less than half of U.S. adults truly grasp how risk impacts their financial decisions. The study, conducted by the TIAA Institute and GFLEC, found that only 36% of adults could correctly answer basic questions related to financial risk—a troubling statistic that underscores a widespread issue affecting people regardless of age or income level. Gen Z scored the lowest at 32%, followed closely by millennials at 36%, Gen X at 37%, and boomers at 38%. Even the most experienced group, the Silent Generation, only reached 39% accuracy. These findings suggest that the challenge of understanding risk is persistent and pervasive, impacting individuals throughout their financial journey.

Educating for a More Secure Financial Future

The implications of poor risk literacy extend beyond personal investment choices. They manifest in everyday financial behaviors—such as skipping essential insurance coverage, purchasing unnecessary warranties, or taking on high-interest debt without a repayment strategy. The ripple effects include heightened financial stress, reduced flexibility in handling emergencies, and an overall inability to build long-term wealth. Alarmingly, the P-Fin Index also found that those with low financial knowledge are twice as likely to face debt constraints and three times more likely to be financially fragile. With a quarter of adults expecting their financial situation to worsen in the coming year, improving risk comprehension has never been more urgent.

Towards Better Financial Decision-Making

As a journalist observing the evolving financial landscape, it’s clear that the problem of risk misunderstanding isn’t simply due to inexperience—it stems from a lack of accessible education and practical tools. While other financial skills like saving and borrowing show slight improvement over time, risk comprehension remains stagnant across generations. This suggests that traditional learning through life experience isn’t enough. What’s needed now is a shift toward more effective financial education strategies that simplify complex concepts and integrate them into daily decision-making. By fostering awareness of trade-offs, encouraging scenario planning, and promoting smart protective measures, individuals can begin to navigate uncertainty with greater confidence and clarity.

Michigan's Top Election Official Faces Scrutiny Over Campaign Finance System Delays

On Tuesday, Michigan Secretary of State Jocelyn Benson faced a rigorous questioning session before the House Oversight Committee, led by Republican lawmakers. The focus was on ongoing technical issues with the state’s newly launched online campaign finance reporting system. Since its rollout earlier this year, the platform has experienced significant glitches, making it challenging for political figures and lobbyists to submit financial disclosures and for citizens to access them. Despite efforts to address these shortcomings, concerns remain about transparency and accountability. During a virtual press briefing on Friday, Benson outlined several corrective measures being implemented, including revised project oversight protocols and a restructured approval process.

The hearing marked one of the first major appearances by Benson before the Oversight Committee since Republicans regained control of the U.S. House earlier in the year. Lawmakers pressed her on the decision-making process behind selecting Tyler Technologies as the vendor for the new system, particularly after the firm acquired the company responsible for the previous reporting infrastructure. This acquisition raised eyebrows, especially considering that only one other company submitted a bid, which was ultimately rejected as unqualified. The committee also scrutinized why the department moved forward with launching the system despite known flaws.

Benson acknowledged that while she wasn’t directly involved in every detail of the contract negotiations, her office maintained confidence in Tyler Technologies’ ability to deliver a functional product under a fixed-cost agreement. She emphasized that if the final product doesn’t meet expectations, the vendor remains obligated to fulfill its commitments without additional payments from the state. A partial refund of $166,000 was announced during the hearing, tied to periods when the system was down or partially nonfunctional. This compensation had been previously hinted at but had not yet been quantified until the session.

One of the most contentious moments came when committee chair Rep. Jay DeBoyer questioned whether Benson should have been more directly involved in vetting Tyler Technologies given the nearly $10 million investment. He also asked why the older system couldn’t have remained operational during the transition. A representative from Tyler Technologies admitted that technically, it could have, though all parties maintained that the current system is an improvement despite its current bugs. In fact, some of the same performance lags seen in the outdated version were still present in the new interface, prompting criticism that little had truly changed.

Benson took responsibility for the system’s shortcomings, insisting that modernizing the infrastructure was essential, even if the process has been rocky. She praised her team’s dedication and highlighted ongoing collaboration with both the Department of Technology, Management and Budget and Tyler Technologies to resolve outstanding issues. Meanwhile, Democratic members of the committee expressed frustration over limited opportunities to ask questions, suggesting that the hearing was disproportionately controlled by the GOP majority. The discussion also briefly veered into a separate controversy involving Benson’s gubernatorial campaign announcement, which Attorney General Dana Nessel ruled violated campaign finance law. Benson accepted responsibility for the infraction, affirming that she is open to future cooperation with oversight bodies.

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Driving Ocean Sustainability: A New Era for Finance and Conservation

The global ocean, a cornerstone of climate regulation, economic activity, and ecological diversity, is gaining unprecedented attention from the financial sector. Recent developments at the third UN Ocean Conference (UNOC3) highlighted a surge in initiatives aimed at bridging the gap between environmental protection and investment. From innovative funding models to international treaties addressing marine biodiversity and plastic pollution, momentum is building to reshape how financial institutions engage with ocean-related opportunities and risks.

At the heart of these advancements is the Ocean Investment Protocol, introduced during the Blue Economy and Finance Forum. This framework offers a strategic guide for scaling sustainable investments in ocean-based industries. Designed to align with Sustainable Development Goal 14, it provides actionable steps for financial actors, policymakers, and business leaders to transition toward a more responsible blue economy. Parallel to this, One Ocean Finance was unveiled as a groundbreaking public-private initiative aimed at unlocking billions for sustainable marine development. By leveraging underused capital through a flexible and targeted platform, the mechanism seeks to simultaneously transform industries, restore ocean health, and enhance resilience in coastal regions.

International agreements such as the BBNJ Agreement and the Global Plastics Treaty are also reshaping the financial landscape. With significant progress made on ratifications, the BBNJ Agreement promises to strengthen conservation efforts and introduce new investment avenues in marine science and sustainable practices. Meanwhile, the evolving plastics treaty is prompting early engagement from financial institutions, encouraging proactive adjustments to compliance and sustainability strategies. Additionally, marine biodiversity credits emerged as a promising tool, enabling private sector contributions to conservation through measurable and tradable outcomes.

As ocean health becomes increasingly intertwined with financial decision-making, the path forward demands collaboration, innovation, and foresight. The growing alignment between environmental stewardship and economic opportunity signals a shift toward a future where finance plays a pivotal role in safeguarding our planet’s most vital ecosystems. By embracing these changes, the financial sector not only mitigates risk but also champions a healthier, more resilient world for generations to come.

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