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It has become increasingly difficult for Americans to manage their finances. Without financial literacy education, there seems to be no end in sight to the lack of good financial habits. Online purchases and the transition to a cashless society make it very easy to become overloaded with debt.
Financially literate consumers should be able to navigate these strange times and successfully save for retirement. The Board of Governors of the US Federal Reserve System US Household Economic Wellbeing Report in 2019 states that many Americans are unprepared for retirement. A quarter of non-retired people surveyed said they had no retirement savings and fewer than four in 10 people who have not yet retired believe their retirement money will last as long as their retirement. Studies show that Americans who maintain their retirement funds have little confidence in their ability to make the right financial decisions necessary to achieve a successful retirement fund.
The solution is simple, but time consuming
With everything that is happening in the world, our financial life is becoming much more difficult. With the rise of NFTs, cryptocurrency and fractional stock trading, it is becoming increasingly difficult to navigate this financial matrix. Americans who are unsure of their financial future should read books on finance and even enroll in online courses to better educate themselves on the financial steps to take. Finding a good, licensed financial manager or insurance agent is also a very smart move. Sometimes in life you need to take a step back and re-evaluate your situation so that you can make better decisions about your future.
5 ways you can become financially literate
Being financially literate means having the knowledge and confidence to efficiently and effectively manage, save and invest money for you and your family. This can include everything from getting out of debt, budgeting, insurance, investments, real estate, college, and retirement planning. Fortunately, it’s never too late to increase your financial literacy — and there are several ways you can do it without spending hundreds of dollars on courses or seminars. By following these five tips, you will be well on your way to becoming financially literate.
Developing a budget is a critical step for financial literacy. It can help you spot any gaps in your spending and identify areas where you’re overspending. Budgeting not only helps you see where your money is going, but it also keeps you on track to save money. Start tracking all your expenses so you can see if there are places where you can cut back and cut costs.
Related: Financial Literacy Isn’t Taught in Schools: Here’s How It Can Be Learned
The stock market has historically yielded an average of 8% per year and is a great way for financially literate people to grow their money over time. If you are unfamiliar with investing, it may be worth talking to a financial advisor who can explain how it works, help you select a portfolio that is right for your goals and that suits your level of risk tolerance.
3. Get an education
This term is used interchangeably with financial literacy when it comes to achieving your long-term financial goals. It means knowing how you save and invest, what you spend and why you save. After all, being financially literate is an important first step in acquiring wealth. Start by educating yourself on topics like budgeting and planning for school or retirement.
Related: 5 Ways to Build Your Child’s Financial Literacy
4. Learn from mistakes
Do you have a history of mismanagement of your finances? If so, you’re not alone; Many people experience financial problems at some point in their lives. It’s never too late to take control of your money, but being financially literate means having a realistic understanding of where your money is going and knowing how to change things if they don’t work for you.
Financial literacy is a must for anyone hoping to understand their money, and we all need a little help from time to time. If you feel confused about your financial situation, know that you are not alone. We’ve all felt like our money was lost in translation at some point – but don’t worry, there are plenty of online resources that can help.
Related: Investing in Our Youth: The Financial Literacy Movement
Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.