Financial literacy is not the same as mathematical literacy. You don’t even need to know maths to be financially literate. It has become necessary for me to put that out there because of the scary staggering lack of financial literacy in our society.
Disturbing Financial Literacy Statistics
Let me show you the disturbing numbers before we get into the discussion.
- “Only 28% of Americans are considered “financially healthy,” according to a CFSI survey of more than 5,000 Americans.
- 56% of American adults have less than $10,000 saved for retirement when you combine the 33% who have nothing saved with the 23% who have a small amount saved. (TIME)
- Two-thirds of American adults can’t pass a basic financial literacy test. (Fortune)
- Nearly three in 10 adults (29%) are now saving more compared to one year ago, particularly Millennials (18-34) and young Gen Xers (35-44). (NFCC)
- 44% of Americans don’t have enough cash to cover a $400 emergency (Forbes)
- Nearly four out of every five U.S. workers live paycheck to paycheck (CareerBuilder)
- The majority of U.S. adults (61%) have had credit card debt in the past 12 months, and nearly two in five (38%) carry such debt from month-to-month. (NFCC)
Considering how uncomplicated financial literacy is, I find these stats disturbing. I want to do everything I can to educate as many people as possible about financial literacy, especially if you don’t have a job.
What is Financial Literacy?
Being financially literate means having the knowledge and understanding of how money works. To check the level of your financial literacy, you need to answer these questions:
- How do you make money?
- Do you know how the money eventually leaves your pocket?
- When the money leaves your pocket, where does it go, to an investment or an expense?
To be financially literate means understanding money and having the confidence to economically and effectively manage, save, and invest money for you and your loved ones. This may include other things like getting out of debts, budgeting, insurance, investments, credit cards & credit scores, mortgage, school, and retirement preparation and taxation.
Being financially literate is not overnight magic, mainly because most schools don’t have personal finance as part of their curriculum. Financial knowledge is also not hereditary. It’s something that needs to be learned, and it takes a deliberate process to attain financial literacy.
Unless you have the money to attend those expensive business schools and online classes, then how to become financially literate is purely in your hands. Trust me, it’s not as complicated as those eloquent speakers make it sound. You can modify your lack of financial knowledge.
How to Improve Your Financial Literacy
Reading just a book will not make you literate. It takes continuous education, practical experiences, and life lessons. I have listed some activities you can start doing to improve your financial literacy while out of a job.
Start Now, Start Here
Now that you know your financial knowledge can do with some boost, why not start now and start here. Start by developing interest in your money and other stuff that involves you, like credit cards, credit scores, taxes, real estate, insurance, social securities, benefits, and retirement. Become more curious and ask questions.
Start right here. Personal Finance Gold was set up expressly to help improve the financial literacy of readers. We have articles covering a wide range of financial topics using illustrations to help readers comprehend easily. You can keep yourself up to date by subscribing to our newsletter. Also, ensure you always check back for more informative content.
The fun way to achieve financial literacy quickly is to take on one topic at a time. Start with the topic that interests you the most, and dig a little deeper each time. Within a short while, you will be an expert on that topic.
Leverage on Government Resources
The U.S. government is working round the clock to ensure that its citizens have more financial education about personal finance. Congress has declared April “Financial Literacy Month” In addition to this, private and public sectors offer events and programs around the topic. Here is an example of the government’s effort to fight the scourge of financial illiteracy.
MyMoney.gov is dedicated to teaching the basics of financial instruction. You will find advice on topics like buying a home, balancing a checkbook, or investing in a 401(k).
Financial Literacy and Education Commission is affiliated with the U.S. Treasury Department. Its mission is to enhance financial literacy by coordinating efforts between the general public and private sectors.
You can take advantage of these types of efforts and get yourself educated. Key into these programs and know how to manage your money better. Stop letting the eloquent speaking guys dictate to you.
Books Will Help You
In your quest to become financially literate without a job, you need to make reading books a habit. There are books about any topic you chose to focus on. For beginners, you may consider less complex books written for “Dummies/Starters.”
Commit some hours per day to read about financial management, investment, and other related topics.
Listen to Radio Talk Shows
There are lots of locally-based radio chat shows that provide financial information. Listen and learn from callers’ inquiries and their financial challenges. It’s important to know that a few radio shows are in reality infomercials promoting products or services. Constantly double-check any financial information being provided.
Radio shows with top-notch financial content are:
- The Dave Ramsey Show
- Moneytalk with Bob Brinker
- Marketplace hosted by Kai Ryssdal
- The Clark Howard Show
Use Financial Management Tools
Handling your finances and cash does not need to be tedious or complicated. Due to the technology and the world wide web, there’s plenty of tools to help you be more skillful.
In addition to assisting you in organizing and visualizing your budget, you wind up learning a great deal too. A number of these programs have excellent teaching facilities or sites.
Listen to Financial Podcasts
A podcast is a great place to find educational, financial content that will help your quest for financial literacy. You can listen while in motion or doing other things. You can find the best financial podcast here.
Follow Your Teachers
When you find an expert who makes you understand financial terms better, use social media channels to follow them. That way, you can get the latest update about their activities.
Talk to an Expert
Connect with a financial expert and ask them all your basic and complex questions. Some may be able to give you a proper assessment on the spot; others may invite you to be part of a group or a class.
Register for a Financial Literacy Course
In addition to the books and every suggestion mention here, you may decide to step up your game by taking a class or course online. You can register for virtual and physical programs, like college courses, online business classes, or even adult education. A structured arrangement might be what you need.
A number of the courses are not free, but you are likely to find something free for a start if you search well. However, it is a good idea to spend money to learn how to manage money.
Benefits of Financial Literacy
If you are still wondering why is it essential to have financial literacy, here are a few benefits you may want to consider:
- It gives you control over your money. This control gives you the confidence to make crucial decisions for yourself and your family. It literarily puts your future in your palm.
- You can detect and avoid fraud easily. Individuals lose millions of hard-earned dollars to fraudsters every year because they could not identify signs of the most common scam.
- A better understanding of debt. When you become financially literate, you will know how best to manage your debt.
- Among others, things that will become clearer with better financial knowledge are; taxes, insurance, mortgages, and budgeting.
Financial literacy is for everyone. Even when you think you know it all, there’s always something new to learn in the world of finance. It’s a world that keeps changing, and you don’t want to be left behind. Don’t be left behind or be scared of the complexity. Take control of your figures.
If there’s any topic you would love to know more about, please let me know in the comment section. I’m always excited to read your comments.