When it comes to your finances, how ‘literate’ do you feel? If you’re like most Americans today, probably not at all. Financial literacy is the catch-all term that describes educating oneself about finances and financial preparedness. Although financial literacy is considered a large part of ‘adulting’ financial education classes are taught in high school. The downside is, it is only taught in a mere 21 states.
Falling into financial straits can happen to anyone at any time; and being overwhelmed in debt can lead to personal bankruptcy.
If you want to know just how critical financial literacy is to your future, continue reading to learn exactly what it is and tips for improving your financial literacy.
What is financial literacy?
Financial literacy is the future, your future. The truth is, Americans aren’t saving enough for retirement. The truth is, millions of Americans are filing bankruptcy every year. The truth is, we need better financial literacy. Financial literacy classes are actually a requirement for some high school graduation, but some is still not enough. Financial literacy usually requires understanding three things: compound interest, inflation, and risk diversification. However answering these questions usually comes with success rates that are below average.
Tips to improve your financial literacy
The only way to improve your financial literacy is to start now. Investing, estate planning, social security, and credit cards are all a part of everyday life. The more you know about financial literacy now, the better you’ll be in the future.
Learn the basics
When it comes to ‘the basics’, there’s only one basic principle; create a budget. (And maintain it). Many people avoid budgeting because they think they’re not good with math or numbers, but in this 21st century, budgeting apps are just as easy to use as Facebook. So, do yourself the biggest favor and know where your money is going.
Know your resources
In this situation, the government is on your side. Better financial literacy for you means a better society for them. In fact, the government has even deemed April, ‘Financial Literacy Month’. There are websites, courses, and various other government funded opportunities to improve your financial literacy.
Beware of the credit-debt trap
If you don’t know already, the ‘trap’ is that everyone knows about credit, but not enough people know about debt. Credit is easier to lose than it is to gain, and then before you know it, you’re in massive debt. Become knowledgeable about debt before you acquire too much credit. This can be the difference between financial literacy that lasts you a lifetime or doesn’t.
Also beware of identity theft
Identity theft and financial literacy walk hand in hand. In this digital day and age, with endless passwords, and information available at the click of a button, your identity can be easily taken away and therefore impact your finances, without you even knowing. And the worst part is? There’s no delete button; even if some financial mistakes are a result of identity theft, they’re still permanent. So, do your best to keep your identity, and your finances, all yours.
Although being financially literate helps you be in control of your finances, there are things that can happen that are out of our control and can affect your finances quickly. If you are in financial straits and need debt relief to get your finances back on track, Hines Law Offices can help. We specialize in Chapter 7 and Chapter 13 bankruptcy and have been representing personal bankruptcy clients throughout Massachusetts for over 13 years.
You will find the bankruptcy lawyers at our Bankruptcy Firm, compassionate and skilled at understanding the realities common to debt relief. We provide clear and practical advice so that our clients capture the best the legal system can offer. Call us today for a Free case evaluation!