Financial literacy is the knowledge and ability to effectively make short and long term decisions about your money. These decisions include how to earn, invest, pay taxes and plan for retirement, which is pretty important stuff. Money brings comfort, security and well frankly, choice.
Most adults lack the basic knowledge to properly manage their finances and the financial decisions made in youth have a huge impact one’s available choices in the future. How would it be different if students were educated in financially literacy as part of their school curriculum? Imagine everyone armed with the knowledge to easily complete annual income taxes, invest in the stock market and take advantage of a 401K!
- 46% of Americans have less than $10,000 saved for retirement. Employment Benefit Research Institute.
- 41% of baby boomers expect their standard of living to decrease in retirement. Transamerica Center for Retirement Studies.
- In 2012, 56% of people in the US have no ‘rainy day funds’. FINRA Investor Education Foundation
- More than half of millennials (about 54%) say debt is their “biggest financial concern.” Wells Fargo Study
- 39% of millennials worry about their financial future “at least once a week.” Fidelity study
Ask anyone around you about interest rates, their investment portfolio or federal taxes and more often than not, you’ll be met with blank stares, confusion or shame. Talking about money can be scary, embarrassing and feel really uncomfortable, but knowledge is power. It’s never too early (or too late!) to learn about financial literacy, especially when 80% of Americans live paycheck to paycheck. Have you checked your credit score or tested yourself to see if you’d pass a financial literacy test? No one’s perfect but let’s strive to empower ourselves and our communities with financial prowess. Removing the mystery from money makes it less scary (sort of like the monster under the bed when we were kids).