How Do You Rate on Money Matters?

7/20/2013 12:31:55 PM

Everyone is talking about financial literacy these days, it seems. Which is a good thing! Too many people learn the hard way the price for being financially illiterate, or just plain overconfident. For example, 77% of teens polled in a recent study consider themselves “financially savvy,” but only 31% of them knew anything about how credit card interest and fees work, or even what a credit score is. Scary!  The bottom line: many young people are entering the “real world” with very little working knowledge of things financial. These chickens will come home to roost.


           But just what, exactly, does it mean to be financially literate, and how will you know it when you get there?


          The best way is to develop a list of desired financial outcomes and use it as a destination guide. This is also a great tool if you are a parent, educator, or mentor who is coaching a young person toward independent living in the “real world.” Here’s what EVERYONE should know about money to be considered financially literate:


How to earn it:


How to manage it:


How to distribute it:


How to bank it:


How to invest it:


            Keep these objectives in mind both now and in the future as your earnings evolve. Periodically review how you’re doing in each of these areas. If you can successfully achieve these goals, you’ll be in excellent financial shape.  That's what financial literacy looks like!


Where do you land when evaluating yourself on these criteria? Give yourself a score on a scale of one to five on each.  Ask someone close to you, such as a parent or spouse, to do the same for you.  Do others rate you with the same degree of financial literacy as you assign yourself? Share your results with us; we’d love to hear your feedback and ideas!