By: JB Beckett, Beckett Financial Group
I often hear people say they wish they’d learned more about personal finance in school. Luckily, schools across the nation are making financial literacy a priority, requiring students to take a personal finance course to graduate. According to a recent survey from the Council for Economic Education, 35 states, including South Carolina, now require students to take a personal finance course, up from just 23 schools in 2022. Unfortunately, many of us weren’t taught financial literacy as K-12 students, leaving us to figure it out on our own.
Being financially literate means you have the knowledge and skills to budget, invest, plan for retirement, and manage other aspects of your finances. According to a survey from the National Foundation for Credit Counseling, 47 percent of Americans gave their knowledge of personal finance a grade of ‘C,’ or worse. That’s a 12 percent increase from the same survey results given in 2009 and it appears things aren’t getting much better for younger generations. According to a WalletHub survey, more than 1 in 4 Gen Zers say they aren’t confident in their financial knowledge and skills—making Gen Z the least financially confident. So what is the cost of being financially illiterate?
1. Financial literacy can help you make smart money moves. It’s very easy to make a financial mistake if you don’t know what you’re doing. For example, inadequate retirement planning during your working years could mean that you don’t have enough saved for retirement, forcing you to return to work in your golden years. Another costly mistake could be a lack of budgeting. Without a budget, you’re likely charging up the credit card which could have serious consequences if you’re charging more than you can pay off.
2. Financial literacy can help you prepare for the unknown. Life is full of uncertainty. If you don’t know how to build an emergency savings fund, an unexpected cost could be detrimental. In a rush to cover the expense, you might turn to a credit card or utilize other financial services such as payday loans. Payday loans are short-term, high-interest loans that are made based on your income. While they provide quick cash, the high interest rates could be considered as predatory lending. If you’re unaware of this, you could fall victim and potentially spend way more than the original emergency cost.
3. Financial literacy breeds financial stability. Knowing how to live within your means, save, and invest are all tools used to achieve financial stability. Becoming financially stable will make it a lot easier to achieve your financial goals. Whether it’s buying a home, or funding your child’s college education, financial stability can make those dreams a reality.
As we head into 2025, don’t let financial illiteracy hold you back. Make financial literacy a priority by attending financial seminars, or consulting with a financial adviser. Financial literacy can alleviate any financial concerns you may currently have while empowering you to take control of your earnings.
Investment Advisory services offered through Brookstone Wealth Advisors, LLC (BWA), a registered investment advisor. BWA and Brookstone Capital Management, LLC are affiliated companies. BWA and Beckett Financial Group are independent of each other. Insurance products and services are not offered through BWA but are offered and sold through individually licensed and appointed agents.
