April is Financial Literacy Month: Test your Knowledge
The month of April has been given the very important designation of Financial Literacy Month. With money impacting our work, lifestyle, emotions, relationships, physical and mental health, you’d think it would rank very high in our subjects of necessary education and training in our public system. Unfortunately, when it comes to basic financial literacy, this is an area most of us need more support and educational resources. Here are the top 10 financial statistics in the US today.
Half of US adults lack basic financial literacy based on a survey by the World Economic Forum. Unfortunately, this number has not improved for over 8 years.
55% of people are not confident they can cover an unexpected expense.
Nearly 1 in 5 Americans say they couldn’t come up with $1,000 in cash within 24 hours to save a loved one’s life.
Half of students say school is not doing enough to teach them about financial literacy. Only 20 states have made financial literacy a mandatory part of their public school curricula.
According to the National Financial Educators Council, lack of financial literacy cost Americans a total of more than $243 billion in 2024.
90% of Americans say money causes them stress.
29.6% of our citizens live in poverty or are considered low-income households. This number is on the increase.
Money is the #1 topic of arguments with married couples.
Americans pay banking institutions $17-billion in overdrafts every year.
Americans pay $120-billion in credit card interest and fees every year.
After doing a little research on this topic, I wanted to provide a list of financial topics so you can assess your own personal financial literacy. I encourage you to highlight, circle, or underline any of the items below that you feel you could have a better understanding of and would like to learn more about.
Banking: Do you know what banks provide and how to best use your banking relationship to your advantage? Do you know the difference between paying and receiving interest and all the types of financial products and services a bank provides including FDIC coverage?
Budgeting: Do you know how to set up a budget or spending plan and use one on a monthly basis?
Credit cards: Do you know how to use credit cards to your advantage and never pay interest or fees?
Loans: Do you know how loans work and the different types of loans that are available to you? Do you know the difference between good and bad debt? Do you know that predatory lending exists and how to avoid it?
Credit score: Do you know what a credit score is, what your score is, and how to work on improving your credit score and why that’s important?
Credit report: Do you know that a credit report is different from your credit score and that it is important to review your credit report on an annual basis? Do you know how to access your free credit report?
Investing: Do you know the different types of investments available, how they work, the risks involved and that investing is the best way to grow your savings over an extended period of time?
Emergency savings: Do you know how much you should have in emergency savings and where this money should be stored?
Short-term savings: Do you know why it is important to have a savings account, what money should be held in a savings account vs. an investment account and why you should have a high-yield savings account (HYSA)?
Net worth: Do you know how to calculate your net worth, what are your assets vs. liabilities? Do you update it annually and set regular financial goals?
Legacy file: Do you have a file prepared in the event you should die or become incapacitated to make your own financial/medical decisions? Does your spouse or significant other also have this prepared? Have you discussed your legacy plan with your family or loved ones?
Real estate: Do you know how real estate can help to grow your net worth, why it is considered an investment, and how it can provide inflation-protected income and tax advantages?
Alternative investments: Do you know there is a list of new and alternative investments that can now be included in your diversified portfolio to produce wealth? Do you know the percentage of your portfolio that should include alternatives?
Insurance: Do you know the types of insurance available, how it works, and why you need it to protect yourself and your family from accidents, perils, financial ruin and other unfortunate circumstances?
Goal setting: Do you know how to set financial goals and why it is important to work with your spouse/partner on goals while measuring your success? Do you know how to set SMART goals?
Compound interest: Do you know how compounding interest works and why it helps to invest/save as early and as frequently as possible?
Taxes: Do you pay your taxes every year and know how to be as tax efficient as you can to hold onto your money within the scope of the law?
Retirement accounts: Do you have retirement accounts, regularly contribute and know exactly what your company offers in terms of this benefit?
College planning: If you are saving for your own education or for a loved one,do you know the types of accounts available and the advantages of utilizing them?
You Pay Yourself First: Do you understand this concept and know that if you are not saving for your future and paying yourself first, you are living paycheck to paycheck and not building wealth?
Employer Benefits: Do you know all the various benefits provided by your employer and take advantage of them to the fullest extent?
Social Security: Do you know what social security is, how it works, and why it is an important part of your retirement plan? Do you have an account set up to review your Social Security benefits?
So, how did you do?
This, of course, is not a complete list. However, it is the list of questions, concerns, and issues I deal with clients on a regular basis. If there are any topics you would like to discuss, reach out to me and schedule your free Q+A here.
Here are other resources you may find helpful:
mymoney.gov
smartaboutmoney.org
investopedia.com
nerdwallet.com
bankrate.com
Coursera or Udemy
Books
YouTube
I want you to be empowered and confident with your finances and financial literacy. I’m always here and available to answer questions and steer you in the right direction as my mission is to help women be confident and in control of their financial lives. Happy Financial Literacy Month!