Financial Literacy: Take Control of Your Money

April is a busy month – it’s Jazz Appreciation Month, National Humor Month and Sports Eye Safety Month.

It’s also National Financial Literacy Month, made so by Congress in 2004 “to raise public awareness about the importance of financial education in the United States and the serious consequences that may be associated with a lack of understanding about personal finances.”

Financial Literacy Month comes at a time when, unfortunately, many Americans have shaky financial literacy. For instance, according to FINRA’s most recent financial literacy survey (conducted every three years), less than half of people knew that mutual funds are generally less risky than individual stocks, while just over a quarter knew that bond prices tend to fall when interest rates rise.

The results of this lack of financial knowledge are apparent. According to a Federal Reserve study in 2015, nearly half of all households (47%) said they couldn’t cover an emergency expense costing $400 without having to sell valuables or borrow money. The Fed study also found that 44% of people with credit cards admit to carrying a balance on their card each month. And more than three in 10 adults have absolutely no retirement savings.

“When it comes to taking control of your finances, knowledge truly is power,” said Joe Correnti, senior vice president of brokerage product at Scottrade. “While everyone has different financial circumstances, many of Americans’ financial woes could be alleviated with better financial knowledge.”

We understand that financial planning is more fun for some people than others. Still, here are some basic things you may want to do to help get you in the right financial state of mind.

  • Portfolio review:  It’s important to periodically check up on your portfolio to ensure that your holdings are in line with your long-term financial goals, your time horizon and your risk tolerance. If you need some help, consider a Scottrade portfolio review.
  • Check your credit: Each of the three major credit reporting agencies (Equifax, Experian and TransUnion) allows you to review your credit report for free once a year. Seeing your report will give you a picture of how your current financial situation affects your ability to borrow money.
  • Read up on financial topics: MyMoney.gov, set up by the Federal Financial Literacy and Education Commission, provides helpful information on financial topics such as borrowing money, maintaining a budget and safeguarding your financial assets.
  • Communicate with loved ones: Make financial discussions a regular part of your family discussions. And it doesn’t have to be boring. Talk with your kids about the importance of budgeting, and how saving money can help them buy things they really want. Or talk with your spouse about both of your financial priorities. Although the topic of money is often touchy, active communication may help prevent financial problems in the future.

What will you focus on during National Financial Literacy Month?

Next Step: You can check out Scottrade’s Knowledge Center to Learn the Basics about investing and the stock market. 

The information and content provided is for informational and/or educational purposes only. The information presented or discussed is not, and should not be considered, a recommendation or an offer of, or solicitation of an offer by, Scottrade or its affiliates to buy, sell or hold any security or other financial product, or an endorsement or affirmation of any specific investment strategy. You are fully responsible for your investment decisions. Your choice to engage in a particular investment or investment strategy should be based solely on your own research and evaluation of the risks involved, your financial circumstances, and your investment objectives. Scottrade, Inc. and its affiliates are not offering or providing, and will not offer or provide, any advice, opinion or recommendation of the suitability, value or profitability of any particular investment or investment strategy.

More Articles & Insights

Compounding: How Savings and Time Can Add Up

Compounding offers the opportunity to help you build wealth, or, if you’re not careful, can lead to significant financial problems.

Scottrade Survey: Millennials Make Investing a Regular Thing

Millennials invest money more regularly than older generations, according to Scottrade’s 2016 American Investor Report.

7 Small Tweaks That Can Help Bring Big Savings

As you consider your long-term financial goals, don’t forget to consider the impact of even small purchases you make today.