You make financial decisions every day and this includes small decisions such as grocery shopping to big ones such as getting a new car or applying for a new mortgage. While practice makes perfect in most cases, a Fortune Magazine report in 2016 notes that nearly 67% of Americans can’t pass a basic financial literacy test. This might not be you but the numbers are worrying since the lack of financial education in the country is affecting many lives.
Over 40% of Americans do not have enough cash stashed away for a $400 emergency, 43% can’t afford to pay their student loans, and 33% do not have retirement funds, according to Forbes in a 2018 report. This has been a major concern for the North American Securities Administrators Association for years. In a 2002 statement released by NASAA’s Denise Voigt Crawford, she said that America is in dire need of financial education.
Financial literacy and consumer rights
As a response to the financial literacy crisis, the government launched initiatives to help Americans understand basic finance but according to NASAA, many also need to brush up on consumer rights. The Fair Credit Billing Act, an act that protects consumers from credit card inaccuracies, is relatively unknown. The act is incredibly useful though because it has the power to stop you from paying inaccurate credit card bills until issues are corrected by your creditors. With credit card debt now in the millions, borrowers are encouraged to read up on the FCBA. Forbes notes that a good grasp of financial policies can help you take control of your finances. Knowledge about financial concepts, on the other hand, can help you make responsible and informed financial decisions.
Financial literacy to secure your future
Financial literacy involves understanding basic credit, debit, and checking transactions as well as understanding the financial landscape as a whole. This includes learning how to manage risks and learning how to set money aside for the future. With most financial decisions now on your shoulders, it is easy to get overwhelmed. Like others in the country, you are now solely responsible for planning your retirement and are also on your own when choosing investment products that are right for you and your goals. You also need to make financial decisions for your children to ensure their future.
Adapting to an ever-changing financial landscape can be daunting but if you take some time to brush up on your financial knowledge, you will be looking at a better future ahead.