Financial Literacy & Fraud Education
Celebrating National Financial Capability Month
April is National Financial Capability Month. Established in 2004, it was formerly known as National Financial Literacy Month. According to MyCreditUnion.gov, the movement evolved to focus on financial literacy and ensure Americans can access unbiased and trustworthy financial education and understand financial services and products. This observance also includes raising awareness of consumer protection laws as well as consumer education, helping Americans recognize, avoid, and report frauds and scams.
All Americans must form some level of financial literacy to have and maintain a fiscally healthy household. They say that knowledge is power. One example is those with a great understanding of finance tend to grow the strength of their financial household and build wealth. They often need help finding financial institutions that will work with them and give them more favorable interest rates.
A low level of financial literacy can lead to hefty amounts of debt, low credit scores, and a lack of options and opportunities. Individuals with low credit scores are charged higher fees and percentage rates because financial institutions perceive them to be at a higher risk. Additionally, fewer institutions are willing to work with those people. The higher costs can make it difficult for those with heavy debt to climb the financial ladder.
April is an excellent time to stop and assess your financial status. It falls at the end of the primary tax season but is still early in the year. Many Americans find that they are not where they want to be financially for their age, yet they don’t know how to take the next steps forward.
Let’s explore why so many of us find finances intimidating. Most parents guide their children into adulthood successfully. However, for one reason or another, financial literacy and fraud education seem to be subjects that many parents neglect to discuss as a family. This instruction gap leaves a large percentage of young adults financially flailing until they find their footing.
Parents, I want to encourage you to teach your children basic money skills. They can start learning how to save by opening a Youth Savings Account. In doing so, they will gain a solid foundation to build upon when they become adults.
At FSU Credit Union, we understand that for most people, it is outside of their comfort zone to step into the world of finance. However, money touches every part of our lives. That is why having a solid foundation of financial fundamentals is necessary. A basic understanding will empower you to make wise decisions, avoid fiscal hazards, and ultimately insulate you from some of life’s hardships. Once you grasp the little things, you will find that it is not so intimidating.
If you need more financial knowledge, there are many free resources you can take advantage of to increase your understanding. One place to start is with FSUCU’s financial tips page or the youth financial fitness page for the younger reader. Here you can find definitions, tips, and links to other sources of economic information. Also, there are many books and podcasts that can be found on the subject. It is important to note that listening to good advisors is crucial for financial success.
If you’re in the camp of those who have some understanding of personal finance but could bolster your knowledge with more information, perhaps you could benefit from getting help from a financial planner. FSU Credit Union can point you in the right direction. We have a relationship with Private Wealth Management & Consulting, LLC to guide our members with Retirement Planning, Investments, Tax Management, and more. Visit our Financial Planning page to learn more.
In honor of National Financial Capability Month, I challenge you to take a moment every day of April to learn something you did not know before from the world of finance. It can be as simple as picking up a new daily tip on protecting yourself and avoiding fraud. If you accept the challenge, you will end the month more educated and better off than you started. It is a simple way to start tackling a big, hairy subject.
Wherever you land on the spectrum of personal finance knowledge, you or someone you know certainly can benefit from furthering your fiscal education. No matter how old you are, do not be embarrassed by what you don’t know. Take steps to change it. Accepting the challenge to learn something new each day of April is a small but positive action. You may be surprised at how much you know in a short time.