April is Financial Literacy Month

As a member of your community, you have the opportunity to advocate for students in your state to have improved access to personal finance education. Use your experience or position in the community to advocate on this critical piece of legislation. 

What is Financial Literacy Month? 

Financial Literacy Month is a nationwide, collaborative endeavor marked by a variety of activities and events across the country and throughout the month of April. It’s when the financial literacy community celebrates achievements in improving the financial literacy of all Americans, especially our nations’ youth. 

Why Is Financial Education Important?

Today, two thirds of American adults cannot pass a basic financial literacy test; nearly half can’t cover a minor emergency, and a third have no money saved for retirement. This means that much of the US population may be at serious economic risk now or later in their lives. Providing all Americans with financial education in grade school, the workplace, and communities will help improve economic security for everyone. This leads to many important and lasting benefits:

• Improved financial wellness for everyone, now and in the future. Children are capable of learning about money management from a very young age, and financial literacy can prepare them for everything from saving up for a gaming console to saving up for college. Later, it helps adults manage budgets, build savings, establish good credit, and invest funds wisely so they can make major purchases and life plans. Financial education lets people retire comfortably and provide for loved ones’ futures.
• Increased likelihood that young people will attend college. Children whose parents create college savings accounts are three times more likely to go to college and four times more likely to graduate. Given that most high-quality jobs today require a bachelor’s degree, it’s essential that parents and caregivers open and contribute to these accounts as early as possible in their children’s lives. Ensuring that children are financially literate at a young age will also help them avoid student debt problems.
• Reduced wealth gaps for improved social and economic justice. Providing high-quality financial education in schools and communities leads to better money management for historically disadvantaged groups who need it most. 
• Increased financial independence. People who understand how to manage their finances are less likely to rely on loans from family members and high-interest predatory lenders. Financial education makes people less susceptible to scams and risky investments, and it offers more resources in difficult times. Being financially stable and independent reduces stress, and it sets a good example for everyone around an economically stable individual.
• Healthier, more prosperous communities. When every individual is financially educated and able to manage wealth effectively, the communities they live in benefit as well. A more educated local workforce leads to food security, home purchases, fewer neighborhood foreclosures, the launch and success of more small businesses, and lower crime rates. The more communities thrive, the more they attract outside businesses and homeowners that will continue to boost their economic health.
• Is an essential tool during an economic crisis. In a 2020 survey, 88% of Americans said they suffered increased financial stress because of the pandemic. Layoffs, reduced work hours, hospitalizations, childcare needs, and more led to significant pocketbook strain. Financial literacy education offers tools that help individuals and businesses become more resilient during and after economic crises.

Until financial wellness becomes part of standard school and workplace education in the US, communities are in immediate need of financial education initiatives and programs. 

Test yourself or family members with a free quiz on basic financial knowledge.

Basic Financial Knowledge Quiz
 

10 tips for Financial Literacy Month:

1. Create a budget: Start by calculating your monthly income and expenses. Use this information to create a budget that works for you.
2. Track your spending: Keep track of every dollar you spend to help you stick to your budget.
3. Smart debt: If possible, avoid taking on debt. If you must take on debt, be aware of interest rates, and make sure payments fit into your budget.
4. Save for emergencies: Set aside some money each month in case of emergencies.
5. Save for the future: Start saving for retirement as early as possible to give your money time to grow.
6. Live within your means: Try to live within your means by avoiding unnecessary expenses and making smart purchasing decisions.
7. Plan for big expenses: Whether it's a down payment on a house or a new car, plan ahead for big expenses by saving up and making informed decisions about financing options.
8. Be mindful of credit: Behaviors that lead to carrying monthly balances and spending more than you otherwise would with cash or a debit card can lead to more financial problems than avoiding using credit altogether. 
9. Educate yourself: Learn about personal finance and investing so you can make informed decisions about your money.
10. Ask for help: Don't be afraid to ask for help from a financial advisor or the financial aid office at your school.

 For additional tools to help increase your financial literacy, visit our Austin Bank Wellness Center.  It is filled with lots of information and tools to help navigate your finances.