What is Financial Literacy?
Personal finance mismanagement is a growing concern. Savings rates are at an all-time low and personal bankruptcy at an all-time high. Too many families live paycheck-to-paycheck, or worse, they live beyond their means, using high interest rate credit cards and payday loans as supplemental income. Here are a few startling statistics:
- In the last 15 years, credit card debt has ballooned from $250 billion to $800 billion.
- Half of US families carry a credit card balance and 35 million Americans pay only the minimum balance each month.
- Ten years ago, personal bankruptcy filings were less than 800,000 per year. They are now running at an annual rate of over 2 million.
- A Harris poll found that 46% of Americans plan to fund their retirement solely through Social Security.
- The national savings rate is now below zero—lower than at any time since the Great Depression. That means, as a nation, we spend more than we earn.
- Only 50% of American households have a personal retirement account and the median balance in those accounts is $36,000. For individuals between the ages of 55 and 64, the median balance is only $88,000.
Financial literacy is a part of day-to-day activities and all of us are affected, sometimes we…
- Spend more time planning a two-week vacation than they do planning for retirement.
- Don't know how they got into financial trouble, and are having trouble getting out.
- Don't understand that the real cost of a car is not determined by the amount of the monthly payment but by the interest rate.
- Don't follow a budget because they can't set one up.
- Unsure how to start saving.
- Don't understand how minimum monthly payments do not pay off credit card balances.