6 ways to improve financial literacy and strengthen your financial future
April is National Financial Literacy Month. What started with the National endowment for financial education As Youth Financial Literacy Day in 2000, evolved into a month-long celebration for people of all ages to learn about their finances and improve their finances.
Financial literacy is essential for understanding how to save, earn, borrow, invest, and protect your money wisely. It is also essential for developing short- and long-term financial habits and skills that lead to general well-being. However, a recent study conducted by the U.S. Financial Literacy and Education Commission found that only one-third of adults could answer at least four of five financial literacy questions on fundamental concepts such as mortgages, interest rates, inflation and risk.
Why is this important? As the study notes, financial education is the key to unlocking the foundations for economic opportunity. Doing this takes a working knowledge of basic financial concepts and the motivation to learn more as your finances become more complex over time. But where do you start and how do you take time in addition to your other obligations and responsibilities?
Hit the books (and videos, blogs and podcasts)
There’s no shortage of information on managing your finances, from books on topics such as managing debt and building good credit, to saving for retirement and planning for your inheritance. The one I’m happy to shamelessly plug in (because it’s really so good) was written by my colleague Jamie hopkins, where it tackles common misconceptions, assumptions and behavioral biases that often prevent people from building strong and flexible retirement plans. In his book, Rewirement: Rewire Your Retirement Thinking!, Hopkins notes that financial literacy is a big barrier preventing people from having a more secure retirement. According to him, “The lack of understanding of how finances change in retirement, combined with a sense of overconfidence based on years of successful savings leading up to retirement, leads to problems with capital. T. “
In addition to books, there is also no shortage of videos, blogs, podcasts, webinars, and websites that you can consume on your schedule from your desktop to your mobile devices. However, sorting through all the information (and misinformation) available on the internet can be daunting. You want to make sure that the information you consume comes from sources that provide objective and unbiased information and advice.
Below are six resources to check out, whether you want to brush up on a single topic or improve your financial literacy in multiple areas:
- Finance at Khan Academy offers short, engaging videos on just about any financial or economic topic you can think of for free.
- If you would like to take an online course, Study.com lists a number of free online courses on their website, including non-credit financial education courses from higher education institutions including the State of Utah, Yale, Purdue, MIT, and more. .
- Investopedia is a good resource, whether you want to learn more about basic investing terms, such as asset allocation and diversification, or want to delve into more complex topics, such as measuring value intrinsic to an action. They even offer investing tutorials to help users understand key terms and concepts.
- MyMoney.gov is the federal government website that serves as a one-stop-shop for federal financial literacy and education programs, grants, and other information. MyMoney.gov is available in English and Spanish and offers a wide variety of articles, consumer guides, calculators, spreadsheets, and checklists on a wide range of money management topics.
- Do not forget your employer. In addition to offering pension education tools and resources, a growing number of companies and organizations are offering financial wellness programs. These programs typically include educational materials and resources on topics like debt management, building emergency savings, applying for a mortgage, college planning, and more. Many also offer access to financial advice and coaching.
- Finally, consider working with a financial coach or independent wealth advisor. An experienced financial advisor can answer your questions, whether you are looking for information on day-to-day money management issues or advice on complex matters relating to your business or your personal finances and investments.
Regardless of how you choose to access information, improving financial literacy should be a lifelong endeavor. Remember that empowerment in any discipline is rooted in knowledge and understanding. The more you understand your finances, the better decisions you will make at every stage of life.
To start your quest for knowledge, visit us at Wealth Carson, where you will find a wide range of insightful resources and tools, including our educational blog, videos, eBooks, calculators, quizzes and more.