Taking Charge of your Finances through Financial Literacy

While many of us are working harder to pay down debt, stick to a budget, and boost our savings, a better strategy would be start on the path to financial health earlier – before we got ourselves into a right mess. According to government data, consumer debt in the U.S. totals out at an alarming $11.19 trillion. The average U.S. household owes more than $15,000 on credit cards and more than $30,000 in student loans.

There’s a definite link between how financially knowledgeable people are and the kinds of choices they make. People who are not financially literate may be less likely to invest wisely and save for the future, and may also be more likely to use high-cost borrowing options (such as payday loans and check cashing centers), get in trouble with credit cards, or experience a foreclosure or bankruptcy.

Classes and online resources are available to help improve financial literacy, regardless of whether you’re an adult looking to improve your outlook or a high-schooler or college student eager to flex your financial independence.

Back to Basics: Financial Literacy in Schools

Ideally, people learn financial literacy when they are young, establishing responsible financial behavior and good habits early. According to U.S. News and World Report, only 13 states make taking a personal finance course a high school graduation requirement. However, there are many organizations working to teach financial literacy to students:

  • Take Charge America Institute. This nationally recognized organization develops financial education programs and policies for all ages, so students can learn to manage their finances with more skill and confidence. For example, one TCAI initiative profiled on National Public Radio conducted summer classes that instructed teachers on how to incorporate financial literacy education into their high school classrooms.
  • JumpStart is a national coalition of organizations that works to improve financial literacy among youth from pre-kindergarten through college age. The organization provides classroom teachers with resources and information to improve their own financial literacy and teach it in school. It also establishes curriculum standards for financial literacy and runs national initiatives such as “Financial Literacy Month.”
  • The Actuarial Foundation. This organization provides a financial literacy program called “Building Your Future” for high school and community/junior college teachers. The program includes four books, a Teacher’s Guide, handouts, answer keys, tools for instruction and assessment, and other resources to help instructors provide financial literacy education in the classroom. The program is aligned with the National Council of Teachers of Mathematics and JumpStart. Teachers can get the materials free for a limited time through the Website.
  • Generation Money. This collaboration between the Consumer Federation of America and Channel One News incorporates broadcast news features, public service announcements, student profiles, money math lessons aligned with Common Core standards, classroom discussion guides, videos, Web-based learning, and other components. It teaches financial concepts such as compound interest, budgeting, credit, debt, and investing to middle and high school students.

Financial Literacy Resources in Your Community

Before you make a major money decision, such as buying a house, getting a credit card, taking out a loan, starting a family, or paying down debt, it makes sense to brush up on your own financial skills. If you’re no longer a student, you can still go “back to school” for financial education.

  • Start with your bank. Many financial institutions and lenders offer financial literacy resources you can access online, through a local branch, through printed materials, or at a local community center. For example, U.S. Bank offers the Financial Genius program that provides financial education to children, adults, and small businesses, while Capital One offers the MoneyWise program for consumers and nonprofit organizations. Your local bank may have in-person classes or seminars you can attend.
  • Use local government resources. Visit the website for your city, county, or state government, or contact your local Chamber of Commerce. Many list classes and other resources that can help you improve your financial literacy, get credit counseling, or access other financial resources. For example, the City of Houston’s Bank on Houston site lists several community centers offering financial literacy education, as does the Massachusetts Financial Education Collaborative. You can also check with the Department of Housing and Urban Development, Small Business Administration, and Economic Development Administration offices in your state.
  • Find a community resource. Particularly in underserved neighborhoods where people may be in greater need of financial literacy education, organizations work to provide classes and counseling. Operation HOPE is one such national organization that provides financial literacy resources to inner cities. Your faith-based organization, bank, credit union, or local community center may be able to put you in touch with a local resource.
  • Visit a credit counselor. If you need to get educated on reducing debt or dealing with bankruptcy or foreclosure, a reputable credit counseling organization can help. The National Foundation for Credit Counselors can help you locate one. Credit counselors also provide financial literacy education and tools, such as calculators, budget worksheets, videos, podcasts, and classes. Always check to make sure that they are a certified credit counselor.

DIY Financial Literacy

If you don’t have time to take a financial literacy course, there are plenty of helpful resources available online. The Simple Dollar is a great place to start learning about credit, debt, and money management. If you want to delve deeper, there are various non-profit and government resources at your fingertips, including:

  • MyMoney.gov, the U.S. Department of Treasury’s portal for teaching all aspects of personal finance, from buying a home and balancing your checkbook to credit and saving for retirement.
  • My Starting Point, a web-based program offered through the Community Financial Education Foundation that identifies your personal financial wellness and recommends a customized learning path that is unique to your needs and helps you understand the basic financial principles that best apply to you.
  • The PBS program Your Life, Your Money provides quizzes, calculators, a financial terms glossary, and links to financial literacy websites.
  • FDIC Money Smart is an instructor-led curriculum for various ages available on CD-ROM, computer-based instruction, MP3, and download, depending on the program you choose. You can learn at your own pace, according to your individual needs.
  • USA.gov is a portal providing government information. In its “personal finance” section, you’ll find information about credit and debt, homeownership, money management, retirement, and estate planning.

Whatever age you are and whatever learning method you choose, don’t overlook the importance of financial education and literacy. Take steps today to improve your financial know-how, and take the guesswork out of borrowing, saving, spending, and investing so you can live a lifetime of financial security.

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