All Articles Tagged "financial literacy"
Not only is April a month known for showers, Easter, and Passover, but (as we mentioned earlier) it’s also Financial Literacy Month! In celebration of everything monetary, here are ten important, and basic keywords that you should store away in your lexicon in order to be financially aware.
The unfortunate truth is that many of us don’t have much in the way of financial literacy. Unless your degree was in finance, many of us are pushed into adulthood with no clue how much damage our student loans can do, how best to invest our surplus income, effective ways to save for retirement, and on and on the list goes. We are suddenly expected to understand how to fill out a slew of incomprehensible insurance or tax forms, but how?
Try these three tips for rounding out a very important part of our education:
1- Attend classes or programs. For example the Institute for Financial Literacy is a nonprofit organization whose mission is to promote effective financial education and counseling. Through this institute you can expand your knowledge through conferences, classes, articles and more. Another site is the U.S. Treasury’s MyMoney.gov, which hosts a wide range of basic money tips.
2- Read books and magazines. Popular books include: The Little Book of Common Sense Investing by John Bogle; Risk Less and Prosper by Zvi Bodie and Rachelle Taqqu; and The Money Book for the Young, Fabulous and Broke by Suze Orman.
3- Complement your education by watching financial shows, adding a visual aspect to your repertoire. The Suze Orman Show touches on personal financial issues and includes tips as well as a segment on what viewers can afford. Squawk Box, considered a leader in market news and highlights stock market trading each day. Kudlow and Company, hosted by Larry Kudlow and touches on a range of topics including insights on the economy as a whole. All are on CNBC.
A woman’s top financial concern is saving up for retirement, according to the CUNA Women’s Financial Survey. The study finds that 401(k)s are the most favored; 45.3 percent of women have contributed to a plan. Pension plans follow closely in second place with 35.8 percent of women participating in the program. Forty percent own more than one retirement plan. The fervor over retirement plans are due to the worry that many women feel over their financial security at old age, reports Credit Union Times.
In addition to retirement, women would rather save their hard-earned cash for long-term goals such as education and homeownership rather than investing in a car or paying for a vacation, the study finds.
When it comes to women and men, here’s a tidbit: A new survey finds that nearly 30 percent of workers who make more than $750,000 annually won’t retire until the age of 70. Fifteen percent of wealthy workers say they won’t retire at all. On the flip side, only six percent of those earning less than $100,000 plan to retire over the age of 70.
Although men are thought to be more financially literate, women are more likely to engage in practices, like budgeting, that are advisable for retirement. But despite the fact that 46 percent of the surveyed women co-manage their household finances, more than half of the surveyed women have no confidence in their financial knowledge and ability. This lack in confidence was strongest in the study’s youngest demographic — those born from 1980 to 1993 — where nearly 60 percent had no faith in their money management.
“Our findings indicated that women take all appropriate measures to be confident in their financial literacy but lack the reassuring knowledge to have confidence in how they manage their finances,” said Paul Gentile, Executive Vice President of CUNA. Most women in the survey reported having six months worth of savings in case of unexpected expenses. A large number of women also balance their checkbooks and pay credit card balances in full every month.
Further confirming that the women’s low self-confidence is unwarranted, new research finds that 34 percent of women are setting budgets while only 28 percent of men are doing likewise. “[A] monthly budget […] is critical to efficiently manage any finances,” said PR Newswire.
The Woman’s Financial Survey recruited 1,042 women across the country with respondents born from 1920-1980.
While the Great Recession has scarred laid-off workers and struggling businesses, it has had some upsides. The recession forced everyone to grab the reigns on their finances. As a result, there was an upsurge financial literacy, especially among women, to endure the stagnant times, reports USA Today.
The recession proved to be a rude awakening for many Americans with frivolous spending habits. Compelled to pull through the difficult times, women have been making money-savvy investment decisions. Twenty percent of women, according to Allianz Life’s 2013 Women, Power, and Money study, now have a sturdy grip on their cash. Since the first survey Allianz issued eight years ago, “more women in general indicated an increase in financial inderstanding and involvement,” adds USA Today.
Between the 2006 and 2013, the number of women who expressed interest in financial, retirement, and investment planning doubled from 35 percent to 62 percent, according to the Allianz survey.
With the recession causing some women’s partners to become unemployed, it was up to them to be in the forefront of money management. A Prudential study, highlighted by MN, shows that the economic stagnation expanded the “breadwinner” role to more women. Thirty-one percent of married Black women were the main providers last year.
The recession isn’t the only culprit behind women’s increase in financial knowledge. Nowadays, more women are deviating from the traditional structured path of a woman’s life. Now women are “staying single longer, divorcing more frequently, entering into same-sex relationships, and outliving men,” USA Today explains. As a result, the absence of a man has required many women to become more financially independent.
In the study, compared to the average woman who made $48,000, these “women of influence” — as USA Today calls them — make an average of $57,000 a year. The data also shows that majority of the women of influence are White and are between the ages of 45 and 54.
Among financially literate women, only one percent did not save up for retirement; 12 percent of the other respondents are not remotely prepared for their financial future.
“We had a worst-case scenario a couple years ago, and it is a wake-up call to a number of people, women in particular,” said Lisa Hanson, a Philadelphian financial planner, “It’s important (for them) to feel a sense of security.”
As parents, we teach our children the necessary lessons to make it through life, from saying no to drugs to doing well in school in order to obtain a good job. Yet, there are certain topics we don’t bring up that have the ability to impact generations to come. When’s the last time you had a serious talk with your child about finances?
Truth be told, finances is an “F” word that many don’t like to talk about. Maybe it’s because we ourselves struggle with money matters or don’t think a child is capable of understanding. A recent study conducted by the Girl Scouts Research Institute found our daughters are ready to learn. Over 90 percent of survey participants (between ages of eight to 17) admit the importance of learning how to properly manage money. Yet, only 12 percent feel confident in making financial decisions.
If our children are ready to learn about finances, it’s time to educate them. Here are ten lessons we can start teaching our girls right now.
Jason Young has a mission. The founder and CEO of Mindblown Labs, an Oakland, CA-based education technology startup, wanted to find a way to help young adults, especially young African Americans, become financially literate. So he came up with a way to entice teens to learn about money by creating a mobile app.
The Mindblown Life app is a social game that combines life-simulation elements and humor. Its aim is to help young adults develop money management and financial literacy skills. According to Blackweb 2.0, Mindblown Life “uses Facebook integration and push notifications to create a rich, in-game life filled with meaningful social experiences.” Similar to “The Sims” game, in Mindblown Life users can attend friends’ concerts, take them on dinner dates, or play mini-games with them. Users also select a career and perform reflex-based mini-games at work to earn “Money,” “Skill,” and “Reputation” points.
“Millions of students are leaving high school and college without gaining a basic level of financial literacy,” Young told the website. Social media is the perfect way to reach this demographic,, he added. “These same young adults are hyper-connected, constantly interacting with friends, and using the Internet and smart-phones to discover new things. Mindblown Life enables us to reach people where they are.”
In efforts to officially launch Mindblown Life the company launched a Kickstarter campaign at the beginning of the month with hopes of reaching $60,000. With a week left Mindblown Labs has come extremely close to their goal having raised $54,661 to date.
Currently, Mindblown Life is in private beta and will launch on iOS in the beginning of 2013. After the jump, you can check out a video about the app/game. Do you think young people would actually use it?