Money Matters: What does financial literacy mean?

Financial literacy means equipping and empowering individuals and couples to take charge of their financial future. Every person and household is unique. There is no one-size-fits-all prescription for financial literacy. It entails:

    • Education – a lifetime journey of seeking knowledge and guidance
    • Behavior awareness – how you prioritize spending vs. saving
    • Motivation and inspiration – to hold immediate gratification at bay for the sake of longer-term goals or aspirations
    • Adapting to life – family dynamics, careers, spiritual convictions, investment markets, and life priorities changing over time
    • Creating a financial plan to achieve your goals – long-term goals require savings or investments to grow over time. Whether you create a plan yourself or use the services of a professional, consider the importance of monitoring and adjusting your investments over your lifetime.

How do you start or restart your financial literacy journey?

Like any journey, you need to know where to start. One way to begin is by assessing yourself across these five components of financial well-being:

#1: Education – ask yourself the following questions:

  • Do I use an app or software to track how I spend my money, and do I make adjustments to achieve my savings goals?
  • Do I know my credit score and what I must do to achieve/maintain an excellent score?
  • Do I actively manage how much I have, if any, in debts?
  • Do I invest my money to achieve longer-term goals, and do I monitor these investments to see if they are compounding as I envisioned? Do I understand everything in which I have invested?
  • Do I understand all the financial components of an estate plan?

#2: Behavior Awareness – consider the following:

  • Do you feel you have a good balance between how you are spending money to enjoy life today versus saving for the future? How often do you assess your spending targets and your savings goals?
  • How do you manage your investments when there is market volatility? Do you react to markets, or do you take action when your investment plan dictates you should?

#3: Having the Motivation and Inspiration to Hold Immediate Gratification at Bay for the Sake of Longer-Term Goals or Aspirations:

  • What safeguards have you put in place to help you manage your emotions?
  • Do you have a Money Coach, a Financial Advisor, and/or an Estate Attorney?
  • Is money a comfortable conversation topic with your spouse, significant other, and/or family?
  • Do you have a good support network to help you stay on track with your goals?

#4: Adapting to Life:

  • When your family dynamics change, do you update your beneficiaries on your financial accounts?
  • Have your career aspirations or retirement timeline changed because of the pandemic?

#5: Creating a Financial Plan to Achieve Goals:

  • Do you have written goals and a financial plan to achieve them?
  • How often do you review and update your goals?

Take Action During the Month of April

Make April the month you identify specific areas of financial literacy you want to improve and formalize a plan to get there.