If you can imagine going through life working and never knowing how to make responsible decisions with your money. At a certain point in your career you will want retire and just enjoy life. If you never learned how to budget, save, spend or invest you may not have that option. Yes! Financial Literacy is extremely important and creating these healthy money habits will provide comfort, security and open doors for your future. Currently Americans owe 800 billion in credit card debt (Financial Literacy and Education Commission | U.S. Department of the Treasury, 2020). Much of this debt would have been avoided with some basic Financial Literacy. To re-iterate YES it is very important.
Welcome to Financial Literacy Month
April is Financial Literacy Month and for the next 30 days the nation will focus on improving all Americans understanding and knowledge of financial literacy.
So lets quickly go over exactly:
What is Financial Literacy
Financial literacy is very easy to explain it basically just means that you are responsible with your money and you know how to maximize it usage.
Responsible as in you know how to:
- Budget- the foundation of all responsible decisions is knowing where your money is going.
- Save- Key to reaching goals set while creating budget (trips, large purchases,eating out etc)</em).
- Spend- Using money wisely and making sure your money is maximized.
- Invest- Setting money aside for future use but having it grow through returns and interest.
Sounds easy enough, but many of us have heard of all these words but never did any of these 4 steps. Remember that Financial Literacy is the language of money and that is one area you do not want to be illiterate in.
Why is Financial Literacy important
History of Financial Literacy month
The month of April being dedicated to Financial Literacy is relatively new. It has only been around since 2008, thanks to congress and President Bush. Although its origins run much deeper and are connected to Benjamin Franklin who wrote on finances and money quite often. Fitting that he graces our 100 dollar bill! Although Benjamin franklin has been deceased for well over 200 years his understanding of how money worked and how vital it was to be smart with it holds true today still. A few of his quotes that are thought provoking:
- "Remember that credit is money."- it's easy to swipe a credit card but that is real money that is being used and will be paid back with interest.
- "If you would know the value of money, try to borrow some."- This one can be difficult banks don't lend money for free. Interest will range depending on an individuals credit history.
- "Our necessities never equal our wants."- This one can be tough but its crucial to know the difference between a Need and a Want. There is no shame in rewarding yourself with a Want, just make sure all your Needs are taken care of first.
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