Financial literacy makes good cents
Do you understand basic financial concepts? Are you confident about every financial decision you make? If you had to take a quiz on financial literacy, would you pass? If you answered ‘no’, you’re not alone. In fact, in a recent survey, 40% of adults gave themselves a grade of C, D or F on their knowledge of personal finance.1
Financial literacy means having the knowledge, skills and confidence to make responsible financial decisions and it has never been more important. In today’s economy, fewer North Americans can rely on generous pension plans or government assistance for a comfortable retirement. As well, an increasingly complex financial environment, lower wages and higher expenses have shifted the burden of financial responsibility to the shoulders of individuals.
Governments around the world are responding to this reality with programs aimed to educate consumers and many of them are aimed at young people. Financial services providers are also stepping up to bolster the cause of financial literacy: “It’s never too early or too late to become more financially capable and every small step towards financial literacy helps,” says Tony Garcia, President and CEO of Foresters™. “At Foresters we believe that confidence and knowledge about financial matters can help improve family well-being for years to come.”
Foresters has created some educational resources to help you get started including an animated video, infographics, articles and a glossary. Foresters also provides its members with access to certified financial counselors to help members with money management through its unique Everyday Money member benefit 2. In addition, North Americans can find a wealth of online tools to help them become financially literate.
5 ways to improve your financial confidence
- Learn everything you can about your finances, including your mortgage terms, bank interest rates and credit score. A recent survey revealed that 60% of Americans have not reviewed their credit score in the past 12 months.3
- It doesn’t have to be complicated. Start with the simple things like contributing to savings plans, setting up educational savings accounts for your kids and protecting your family’s financial future with life insurance.
- Keep track of every penny you spend for a couple of months and look for ways to cut back and start saving. Even a small commitment to saving will make you feel better about your finances.
- Look ahead 10, 20 and 30 years. Imagine the life you want and what it will take to make that happen. The ability to afford a comfortable retirement is the most common financial worry among consumers4 but many aren’t saving for retirement.5
- Talk to your kids regularly about money, involve them in household budgeting, open bank accounts for them and encourage them to save for things they want.
Achieving financial literacy is not a means to an end; it’s a lifelong endeavor and your knowledge will need to evolve as the economy and your personal circumstances change. The key thing is becoming more informed.
1National Foundation for Credit Counseling: Financial Literacy Survey of US Adults, July 2013
2Foresters member benefits are non-contractual, subject to eligibility requirements and limitations and may be changed or cancelled without notice. Third parties administer Legal Link, Everyday Money and Foresters Competitive Scholarships.
3 National Foundation for Credit Counseling: Financial Literacy Survey of US Adults, July 2013
4LIMRA, 2014 Insurance Barometer Study
5The 2014 Consumer Financial Literacy Survey: Harris Poll on behalf of the National Foundation for Credit Counseling
411948I CAN/US (07/15)