by Kyle Taylor
If one rite of passage to adulthood is racking up a bunch of debt, I was an overachiever. Before I even turned 30, I was staring down more than $50,000 in student and credit card debt — with no idea how to dig out of it.
A little education in managing my own finances would have saved me a lot of pain — and money — but American families on the whole are sorely lacking in that knowledge, referred to as financial literacy.
Financial literacy is knowing the importance of a good credit score and how it can save you thousands of dollars over your lifetime. Financial literacy is keeping a monthly budget so you have enough money to pay your bills and have some fun. Financial literacy is understanding the critical importance of saving — for emergencies, for big purchases, for retirement.
Daunting as these topics can be, every family and community should be discussing them.
April is Financial Literacy Month, and The Penny Hoarder recently released a survey measuring Americans’ financial literacy. The results show that families who don’t have these conversations suffer financially.
According to the survey of more than 1,500 adults:
* 18% of those who talked about money management at home report household income of less than $50,000. But among those who didn’t talk about money, 31% earn less than $50,000.
* 17% of those who discussed finances growing up have no savings at all. That figure balloons to 40% among those who had no early financial literacy.
* 33% of those who discussed finances growing up do not keep a budget. That rises to 54% among those who did not talk about money.
Given those consequences of poor financial literacy, we need to help families escape that fate.
Here’s how you can help:
- Support programs that help families in need, like United Way Suncoast’s financial stability initiatives.
- Talk more openly about money in conversations with family, friends, colleagues and others. Do your part to make this topic less taboo.
- Take opportunities to talk to kids in your life, in the grocery store checkout or on a bank errand, about smart money choices.
- Boost your financial know-how by reading up on topics like how to save money, including budget strategies and goal setting. There also are hundreds of financial literacy programs run by nonprofit and educational groups throughout the country that are based on the FDIC’s MoneySmart program.
— Kyle Taylor is the founder and CEO of The Penny Hoarder, a popular website on ways to make, save and manage your money.