You surely have come across the word financial literacy or more simply said knowledge about personal finance. In the US, the month of April has been chosen by the Senate as the financial literacy month. People can get free personal finance classes about how to maintain healthy finances. The same initiative exists in Canada and some voices in the UK complain that kids do not learn anything about money at school. But how bad is the situation?
Americans ranks 14th, Canadians 5th and British 6th
The Wall Street Journal gives the result of a global survey about financial literacy in an article. Financial literacy is considered as important in developed countries where people have access to more and more complex financial products. Canada and the UK seem to do well but the US is lagging behind. The questions required some basic calculation about interests, inflation or risk. How can we explain these results? Are Americans have a bigger math and financial phobia compared to other countries? If you look at the map presented in this article, you will also notice the differences between US states. It also seems that young people have less financial knowledge than the rest of the population.
Start with the basics and build up
Finance sounds a bit scary and unless you are passionate about figures, you may be procrastinating and leave it for later. You’re wrong! The younger you are, the easier it is to learn. Your head is fresh and the probability is that you do not (already) have a great amount of money to manage. This makes it even more essential to manage your money well and to make the right financial decisions. Check our post about how to make a budget and compare offers if you have no choice but to take a student loan. Read blogs teaching financial basics such as how interest rates work or what is inflation. If you think it is boring, just bear in mind that this is important knowledge to get richer, save money or at least not lose some!
Don’t hesitate to ask a professional
Nobody is asking you to become a finance guru. You should know the basics such as saving accounts, basic investing, work related finance perks… Unless you become very rich, try to keep it simple but efficient. If you are unsure about a financial product or which direction you should take, there is no shame in asking for guidance from family, friends, dedicated websites or financial advisers. The best thing we can tell you is that if it sounds too good then there is a good chance that the deal hides something fishy. Remember that knowledge is the key!