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What Do the Words Financial Literacy Mean to You

Last post Sun, Jul 1 2012 11:27 AM by Kassy. 3 replies.
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  • Sat, Apr 21 2012 8:09 PM

    What Do the Words Financial Literacy Mean to You

    Actually, I know very little about Financial Literacy.

    My first thought is that it deals with finances and it implies that we know about it.

    A few minutes ago, I placed the words into Google to try and find out what they really mean. It seems there are posts on Financial Literacy for adults and older students and Financial Literacy for children.

    I would like to know your thoughts.

    What do you think makes a financially literate person. What does a person need to know and be able to do to become knowledgeable in this?

    Do you think that the people of the United States need to know this information? 

    What do you think is the best way to teach Financial Literacy?

    Note: April 2012, is National Financial Literacy Month

  • Mon, Apr 23 2012 10:15 AM In reply to

    • Gary
    • Top 150 Contributor
    • Joined on Wed, Mar 28 2007
    • Posts 412

    Re: What Do the Words Financial Literacy Mean to You

    At the most basic level it means understanding the simplest of financial concepts. Things like income, expenses, interest (earning and paying).

    But if you want to avoid financial trouble it takes in a lot more. Things like:

    - how to determine your net worth

    - how to create and monitor a spending plan (aka budget)

    - how to compare two different financial alternatives (for instance buy a new car or a used one - or - take this job or that one)

    - how to build a college fund and a retirement fund

    - a basic knowledge of how investments work and how to compare one to another

    There are more, but if a person just knew these they'd probably avoid a lot of financial hardship.

    The sad thing to me is that we're not teaching our youngsters this before they become adults. We wait until they've made major decisions (career path, how much student debt to take on, etc) before expecting them to learn anything about money. By then (at least for many) it's already too late.

    Like Lori, I'll be interested to see what others think 'financial literacy' means.

    BTW, we'll be doing a tweetchat on financial literacy along with Bankrate.com and Cambridge Credit Counseling on April 30th. Please join us!

  • Sun, Jul 1 2012 12:46 AM In reply to

    Re: What Do the Words Financial Literacy Mean to You

    So unfortunately, this is a sticky subject. It's the source of many an insult - cheapskate, skin-flint and tightwad. This is most disturbing when going out to dinner with another person for the first time and guest starts in about 'tightwad' dinner dates and being stiffed even before the meal is served.

    Discussed with pride in one's accomplishment, it's the fuel for loan requests.

    There is no common sense in this area as it isn't even a required subject in school. This is a marketing niche with a lot of vulnerable and desperate people and unscrupulous salespeople.

    The mere mention of this term is fighting words for many type A personalities and antagonistics. It is the start of a non-stop nagging session sometimes.

    This art is best practiced quietly in public and proudly at home. It is discussed amongst the like-minded and some desperate folks. Unfortunately, the unscrupulous salespeople find the desperate folks first usually.

  • Sun, Jul 1 2012 11:27 AM In reply to

    Re: What Do the Words Financial Literacy Mean to You

    I agree with the others on this one. Listening to the Dave Ramsey show, I do believe they have a program teaching financial responsibility for high school age kids. This is a positive step. So important, IMO, is teaching the ways we are manipulated by media, advertising etc..This is difficult to interpret, even by knowledgeable adults at times. We keep getting pounded to buy more (help the economy), borrow more (cars, TV etc.) and yes, even give more (charities etc.). It is a constant struggle without a good, basic background on financial responsibility.
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