Financial Literacy and the Future

For some people, financial literacy may seem as though it's an obvious route to take in your basic education. After all, one thing we all need to understand is money, and how it works. Money and your finances are a part of modern survival, and the youth of the United States could be taught the basics early on in their lives. This, in turn, could have an impact on the future of the country as a whole.

As it currently stands, according to a study by FINRA, almost two-thirds of Americans cannot calculate interest payments correctly. About 33% said they would not even know how to try and calculate it at all. 

That is a disturbing state of affairs. The fact that so many Americans could not even begin to contemplate how to work out their payments means they have loans that, in essence, they have no idea about. They get a bill and just accept that it’s correct because they would have no way of checking. Getting yourself financially literate and educated is something that you owe yourself and your family.

For many adults in modern America, finances can be a confusing subject. If that is the case, then how is it affecting America’s youth? Are they on track to change this and be smarter with their money than the previous generation? 

While there can definitely be a debate about whether education in school about finances will increase financial well-being or not, a study funded by the FINRA Investor Education Foundation concluded that if a rigorous financial education program were implemented carefully, it could improve not only the credit scores of young adults but also could also lower the probability of delinquency in the same demographic.   

Learning financial basics sooner rather than later is essential for the next generation of Americans as they enter adulthood and the working world, so they can get ahead and not end up in debt without the knowledge of how to deal with it.  According to data from GFLEC, 54% of student loan holders did not even attempt to figure out how much their repayments would be every month before taking out their loans.

Being financially literate is not something to be taken lightly, as it affects so much of our lives. Not understanding your student loan and the repayments required over time could have a devastating effect on your future.

Learn as much as you can about how finances work in a practical sense, and your life could be easier to navigate and probably less stressful and more fun.
 

IMPORTANT DISCLOSURES

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. 

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC