Let's be honest; many of us lack basic financial literacy skills. Don't think that a true statement? Consider the overwhelming data to back it up. The average personal debt (exclusive of home mortgages and among those with some debt) exceeds $38,000.
According to Northwestern Mutual's 2018 Planning & Progress Study, here are some more frightening stats on the state of financial literacy.
- Americans are twice as likely to have accumulated $5,000-$25,000 in debt (33%) rather than personal savings (17%)
- Two in 10 people allocate a staggering 50%-100% of their income towards debt repayment.
- 1 in 10 (13%) Americans say they will be in debt for the rest of their lives
- Credit card debt tied mortgages as the leading source of debt, at 25%. Educational loans (6%; 28% for Millennials ages 18 – 24) and car loans (7%) rounded out the top three.
We're a mess when it comes to managing our money. It doesn't have to be that way. There are many steps that you can take to improve your financial literacy skills and raise your financial IQ. Now is the best time to start. Waiting to increase your knowledge of money will only delay your ability to dump debt and increase wealth.
Here are several different ways to can begin to increase your financial knowledge.
Financial Literacy Resources
Talk With Freinds
Money doesn't have to be a taboo topic. Falling into this trap often causes us not to increase our knowledge of money because we are not having conversations or hearing other points of view on it. Do you know of a friend who is financial literate? Who's a success with their money? Swallow your pride and ask them how they are doing it. People are more than willing to share their success stories and to help.
Heading back to class is another great way to up your financial literacy skills. Training doesn't have to be a long term commitment, either. Many local library or community college offers continuing education classes on money topics. A quick google search and you should be able to find several different class options that range from a singles session to multiple and cost no money or as little as $50 for the course.
Blogs are another great source of information to boost your financial literacy skills. Many personal finance blogs cater to the various niches in the category. Find one that fits your needs. If you are in debt, a site like Debt Discipline might help, if you're a woman, a blog like Woman Who Money might be a good fit, or looking for general information, the blog Vital Dollar might be for you.
Mainstream Web Sites
If the personal style of a blog isn't for you, consider a mainstream site to bolster your financial literacy aptitude, sites like Yahoo Finance, Kiplinger, or Bankrate. These sites are just a few examples of the mainstream sites that cover a wide variety of topics including, mortgages, banking, credit cards, loans, investing, personal finance, etc.
Books are another great way to increase your financial IQ. Audiobooks can listen too on your daily commute or a long road trip. Just like personal finance blogs, there are many different niches of books to chose from. If you are looking to get into the mind of a millionaire, The Millionaire Next Door is a great read. If you are looking to dump debt, a book like Dave Ramsey's The Total Money Makeover is a must-read. If you are looking for a general refresh to increase for financial literacy expertise Ramit Sethi’s I Will Teach You To Be Rich is a strong contender.
Podcasts are another tool that you can use to expand your financial literacy command. A Podcast can be listened to in the car, streamed from any computer or smartphone, and are great to listen to when completing chores around the house. The Planet Money and Freakonomics podcast are two good chooses to begin with.
The good news is there are hundreds of money, investing, and personal finance podcasts to pick from with a quick search in your favorite browser. So grab your headsets and get listening.
Maybe even after taking in all the above resources, you still need a little more motivation to hone your financial literacy know-how. Then you may want to consider a coach.
Shannon McLay is the founder of the Financial Gym, and her goal is to help anyone in need. You can visit her Financial Gym location in New York City, or her team can meet with you virtually to get your finances on the right track.
The Financial Gym offers a free 20-minute consultation call, so you have nothing to lose.
Teach Your Kids Financial Literacy
Now once you have master one or many of the categories above and feel confident that you have elevated your financial literacy moxie, it's time to teach your children the same.
Increasing your child's financial IQ will give them a head start once they begin their financial lives. Have money conversations with them, so they are not afraid to talk and ask questions about money. Included them in budget discussions, let them know how much money you make, what the mortgage or rent cost, the electric bill, etc. They will feel empowered to being involved.
Try talking with them about topics they are interested in and included a money component. Most kids like talking about smartphones or video games. Speak about the initial cost, re-occurring charges, and how much someone might have to work to pay for these types of purchases.
If all else fails and you believe you need help in this area. Some resources can help The Family Money School is a tremendous video-driven course that offers everything a parent needs to teach their kids about money.
It's never too late to start increasing your personal finance knowledge. Each April in the United States is Financial Literacy Month. But, you don't need to wait until then to educate yourself about money. Start today. Your money, family and stress level will all thank you.
Brian is a dad, husband, and an IT professional by trade. A Personal Finance Blogger since 2013 who, with his family, has successfully paid off over $100K worth of consumer debt. I want my three children to handle money better than I ever did at a young age. I have been teaching them as much as I can for the last 10 years. My goal is to continue to champion the financial literacy message and then why I created the “How To Rock Your Money” book. To help teenagers navigate their financial futures. I hope my family’s story of paying off over $100,000 worth of debt will inspire and motivate you to take control of your money. He blogs at BrianBrandow.com