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  • Archive for April, 2017

    Here’s Why Financial Literacy Is For Everyone

    Thursday, April 20th, 2017

    little blog pictureApril is Financial Literacy Month.

    “Financial Literacy” is a somewhat new term and trend in the United States, and for that reason, some find it off-putting and discouraging. Don’t let the fancy phrasing scare you, though. The reality is, financial literacy simply means knowledge about money and savings. Even though most of us didn’t learn the basics of financial knowledge in an educational setting (hopefully that will change in the future!), important, life-changing saving information is easily within reach.

    In fact, understanding of the importance of financially literacy only became widespread in the past fifteen years or so. In 2002, the U.S. Department of Treasury created the Office of Financial Education as a way to organize its efforts in the area. The next year, Congress passed the Fair and Accurate Credit Transactions (FACT) Act, which established the Financial Literacy and Education Commission, a group that later published a “National Strategy on Financial Literacy.”

    That means that, hopefully, financial education will become a standard and required part of education. However, just because it wasn’t something you learned about in school doesn’t mean you cannot become extremely knowledgeable on investing, saving, retirement and other financial topics. It is important for everyone to educate themselves about their finances, but know that you don’t need to be a financial expert to make smart decisions. Some basic information can go a long way.

    In particular, it is important to know what you should be doing at every stage of life to make sure you are on track financially and preparing for long term financial security. WISER’s “7 Life Defining Financial Decisions” booklet breaks down key topics into stages and explains how to approach each one.

    For example, when it comes to jobs and careers, when taking a job, consider not only salary but also benefits. There are two basic kinds of employer-sponsored pension plans: defined benefit and defined contribution plans. When leaving a job, it is important to consider that changing jobs, even for higher pay, can cost you a bundle in lost benefits and retirement income. If at some point in your life you decide to stay home full time, think through the family finances, including retirement planning. Where there are large upsides, you will lose compensation, benefits, job skills and contacts if you leave work completely.

    The booklet offers more advice on financial decision-making at every stage of life. By focusing on life stages and basic information, financial literacy is within reach for everyone.

    WISER

    About Us

    WISER is a nonprofit organization that works to help women, educators and policymakers understand the important issues surrounding women's retirement income. WISER creates a variety of consumer publications including fact sheets, booklets and a quarterly newsletter that explain in easy-to-understand language the complex issues surrounding Social Security, divorce, pay equity, pensions, savings and investments, banking, home-ownership, long-term care and disability insurance.

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