Did You Know that April is National Financial Literacy Month?
April is National Financial Literacy Month – an entire month dedicated to the importance of learning, developing and maintaining healthy financial habits. Financial literacy and continuous improvement are cornerstones to who we are at Covenant Wealth Strategies.
How have you recently increased your financial knowledge? Do you understand compound interest? Do you know what the Dow Jones Industrial Average is? Did you know that bonds have an inverse relationship to interest rates or that a stock is an equity? Do you know what dollar-cost averaging is?
Sadly, average American money habits reveal that:
- Only 40% of adults use a budget and/or track spending
- More than three out of four adults (76%) live paycheck to paycheck
- Half maintain three months of expenses in an emergency fund and
- More than a quarter (27%) have no savings at all!
America's collective debt best illustrates why we need to increase financial literacy in adults and children. More than a third of U.S. adults (38%) worry they won’t save enough by retirement. Student-loan debt has increased to over $1.5 trillion nationwide last year and 43% of American adults say they lack enough money for emergencies.
Income and Age Drive Opinions
According to a Gallup poll, Americans’ opinions on long-term investments vary sharply – and reflect misconceptions – depending on income and age.
- American households with less than $30,000 in annual income are most likely to name gold as the best long-term investment choice.
- Upper-income Americans are least likely to name gold.
- Stock investors more likely favor stocks: More than third of such investors (34%) say stocks are the best long-term option compared with 13% of Americans who don’t own stocks.
- Upper-income Americans are most likely to own stocks (82%).
- Americans 18 to 29 years old are almost evenly split between favoring real estate, stocks, gold and savings accounts for long-term investments.
At Least We’re Honest About It
We seem frank about financial shortcomings: Two out of five adults give themselves average or failing grades on personal finance. Moreover, only 33% of parents talk to their kids about money.
By understanding how to better manage money and make the most of a limited resource, many Americans can improve their personal financial situations. Where did you learn about personal finance – and do you keep trying to learn more?
More than half (52%) of teens want to learn more about handling money and are most interested in budgeting, saving, checking accounts and investing. Most (85%) American parents also think high school graduation requirements need to include a course in personal finance.
If you are interested in increasing your financial literacy and would like to discuss your financial planning or investment strategy needs, we welcome you to Contact Us to set up time to discuss further.
Disclaimers
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change. The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.