Celebrate Financial Literacy Month

| April 05, 2018
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April isn’t just the first full month of spring … it’s also Financial Literacy Month! The United States Senate first proclaimed April as Financial Literacy Month back in 2004, in order to promote good financial habits and the importance of financial education.

How important is financial education?

In 2002, Alan Greenspan, then chairman of the Fed, said in prepared testimony before the U.S. Senate Committee on Banking:

“… Education can play a critical role by equipping consumers with the knowledge required to make wise decisions when choosing among the myriad of financial products and providers. In addition, comprehensive education can help provide individuals with the financial knowledge necessary to create household budgets, initiate savings plans, manage debt, and make strategic investment decisions for their retirement or children’s education. Having these basic financial planning skills can help families to meet their near-term obligations and to maximize their longer-term financial wellbeing. While data available to measure the efficacy of financial education are not plentiful, the limited research is encouraging.1

When you come right down to it, financial education is all about making good financial decisions and avoiding bad ones. Since the recession of 2008, making good financial decisions is more important than ever. It doesn’t matter who you are, where you live, or how much money you make. Nowadays, people just can’t afford to make bad financial decisions anymore.  

Furthermore, the benefits to making good decisions are substantial. According to the Financial Educators Council, “Research shows that individuals that have taken a personal finance education course have higher savings rates, higher net worth, and make larger contributions to their 401(k) plans.”2 Add all that up, and it means financially literate people have less debt, a better retirement, and more money to live life the way they want to.

April isn’t just the first full month of spring … it’s also Financial Literacy Month! The United States Senate first proclaimed April as Financial Literacy Month back in 2004, in order to promote good financial habits and the importance of financial education.

How important is financial education?

In 2002, Alan Greenspan, then chairman of the Fed, said in prepared testimony before the U.S. Senate Committee on Banking:

“… Education can play a critical role by equipping consumers with the knowledge required to make wise decisions when choosing among the myriad of financial products and providers. In addition, comprehensive education can help provide individuals with the financial knowledge necessary to create household budgets, initiate savings plans, manage debt, and make strategic investment decisions for their retirement or children’s education. Having these basic financial planning skills can help families to meet their near-term obligations and to maximize their longer-term financial wellbeing. While data available to measure the efficacy of financial education are not plentiful, the limited research is encouraging.1

When you come right down to it, financial education is all about making good financial decisions and avoiding bad ones. Since the recession of 2008, making good financial decisions is more important than ever. It doesn’t matter who you are, where you live, or how much money you make. Nowadays, people just can’t afford to make bad financial decisions anymore.  

Furthermore, the benefits to making good decisions are substantial. According to the Financial Educators Council, “Research shows that individuals that have taken a personal finance education course have higher savings rates, higher net worth, and make larger contributions to their 401(k) plans.”2 Add all that up, and it means financially literate people have less debt, a better retirement, and more money to live life the way they want to.

There’s no better way to spend the month of April then to take a little bit of time learning more about your own finances. I’ve sent you information on many of these topics in the past, and I’ll continue to do so in the future. But if you ever have any questions, don’t hesitate to let me know. I’d be happy to sit down and talk with you.

In the meantime, never discount the value of a good education—especially when the topic is your own money.

Happy Financial Literacy Month!

Stay Ahead Of The Curve,

Gary Scheer, RFC, CSA

Retirement Financial Advisors, LLC

Sources:

1Greenspan, Alan. 2002. “Prepared Statement.” Hearings on the State of Financial Literacy and Education in America. U.S. Senate Committee on Banking, Housing, and Urban Affairs, February 6.

2Shorb, Vince, “Financial Literacy and the Revival of the American Dream,” National Financial Educators Council, accessed March 29, 2013. 

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