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Financial Literacy

April 26, 2023

Financial Literacy

By: Site Owner

Published: April 26, 2023

Author: Karen Schaeffer, CFP®

Happy Financial Literacy Month! We may have started the month with April Fool’s Day but there’s nothing foolish about having the skills to make smart money decisions. Sadly, according to various surveys and studies, it appears that most Americans do not possess a strong level of financial literacy. FINRA Investor Education Foundation found that only 34% of Americans could correctly answer at least four out of five basic financial literacy questions. 

Similarly, a survey by the National Foundation for Credit Counseling found that 41% of adults in the United States gave themselves a grade of C, D or F when it came to their knowledge of personal finance. This is bad news for all of us.

Good news, we can turn this around.  The basic tenants of financial literacy include:

  • Tracking and managing personal spending,
  • Using debt responsibly,
  • Saving and investment basics, and
  • Managing risk with cost effective insurance. 

Whether you’re trying to improve your own skills or those of a family member or friend, great resources are just a quick internet search away. More and more people are using apps to monitor their cash flow.  

Check out this link for a review of several popular apps to get you started.  

https://www.nerdwallet.com/article/finance/best-budget-apps.

Of course, a simple spreadsheet of your own making can work as well, and there are lots of books, blogs, and podcasts to coach you along. Just be sure someone is qualified to give you advice before you actually follow it. 

There are four keys to using debt responsibly: Only borrow what you need, take time to compare your options, understand the contract, and make your payments on time. And, of course, pay all credit card bills in full every month. Know someone struggling with debt? Encourage them to contact the National Federation for Credit Counseling www.nfcc.org to get help from certified credit counselors. 

One of my favorite websites for saving and investment basics is www.investor.gov. In addition to great how-to-get-started information, the site includes easy to use calculators, great information on how to spot and avoid scams, and a monthly financial literacy quiz to build your investment knowledge. 

Finally, financially literate people off load some of the life’s unpredictable risks to insurances companies. At a minimum, we all need to know enough about life, health, disability, property/casualty insurance and liability in order to purchase an appropriate policy for a reasonable price, making changes as our needs change. 

Improving financial literacy can transform individuals, families, communities and even the country. Here’s to celebrating financial literacy month by either improving or sharing your money skills and getting closer to a financial secure future for all. 

Karen Schaeffer, CFP® is the Managing Member and Co-founder of Schaeffer Financial LLC, a financial consulting firm in suburban Washington, D.C. She has been advising clients for over thirty-five years and has developed a diverse client base including professional women, Foreign Service Officers, foreign nationals, and Federal government employees. She has been presenting seminars for NITP for over 25 years.

This newsletter is designed to provide information on the subjects covered. NITP, Inc. takes great care to insure the accuracy and quality of these materials which are provided without any expressed or implied warranty, including, but not limited to, their fitness for a particular purpose. They are also provided with the understanding that neither the author nor the publisher is engaged in rendering legal, accounting, financial planning or other professional service. If additional assistance is required, the services of a competent professional should be sought.

This entry was posted in News on April 26, 2023 by Site Owner.

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