Financial literacy is everything. It determines the quality of your life now and will absolutely impact the quality of your life in the future. Where you live, where you go, what experiences you get to record are all contingent on money – but more importantly, the decisions you make with money now are mission critical.
But what is financial literacy, precisely? Literacy means to be learned and to have the ability to learn. Financial literacy is like the practice of learning how to care for your physical health and wellness. When you are learning about good nutrition and physical wellbeing, for instance, all the facts in the world won’t transform your body—it is when you put new truths into practice that things begin to shift and change.
Financial literacy is the same. Knowing about money management can’t change the needle on your finances—but practicing the tenets of financial discipline can.
When you know how to make money and budget sufficiently to create a surplus for prudent investing, then your money can really start working for you by earning its own money. That’s ROI 101 (return on investment).
ROI is the magic of good money management: Leveraging what you already have to get more of what you want. You can live comfortably or even lavishly, should you choose to, with financial abundance. Many Americans live paycheck-to-paycheck and contribute little, if anything, to their retirement accounts. Abundance seems impossible to obtain if you’re stuck in a loop of financial mishaps.
It is, therefore, a worthwhile endeavor to build financial literacy into your wellbeing. Money worries wreak havoc on our mental health and can damage our relationships with friends and family. Financial troubles are a common contributor to divorce. Likewise, asking parents for financial support can have damaging repercussions.
The month of April is dedicated to financial literacy. It was instituted in 2003 as an educational initiative – to recognize the importance of financial literacy and to teach sustainable and profitable financial habits.
Levels of financial literacy often coincide with life stages. Teens, students, employed individuals, parents, retirees and so on will have different needs, income and responsibilities at these very different stages of life. You can have something very basic like a bank account or be more advanced with stock and bond investments. You may be in debt or getting ready to take on a second mortgage. Your comprehension of financial concepts can also determine your financial literacy level – understanding things like your credit score, inflation, diversification and so on. No one will quiz you on how much you know, but it really does come into play when you decide to make a big purchase, like buying a home.
According to a recent Bloomberg article, single women are buying homes at twice the rate of single men. Women are ruling the home ownership aspect of personal finance. They’re staying single for longer (and like being single despite the stereotypes that women ultimately desire to be married) and want to have control over their living situation. They don’t want to wait to be married to build their own wealth and have a place of their own.
Many single women are also likely to be single parents who want to offer their kids a real home that could later be passed on to them. It’s empowering and builds on a woman’s confidence and independence. There’s no way to achieve these big, momentous decisions without adequate strategic financial planning. At Lundeen Abrams Advisors, we champion independent women.
Lundeen Abrams Advisors offers money management expertise. We help you understand taxes and how to make your money last longer. Most importantly, we help you execute important decisions in life with confidence. Regardless of where you are on the financial literacy spectrum—whether you’re in crisis or getting ready to buy your first home—we are the trusted advisors who help you move up a level so you can pass down your legacy to future generations. And this…this baton-passing from one generation to the next is a pillar of financial literacy. We need financial mentors willing to pass on what has been learned to the next generation.
Call Lundeen Abrams Advisors to start making smarter decisions about your money today so you can help share your financial literacy with future generations.