How well do you understand the role interest plays in your mortgage payments? Have you figured out how big a nest egg you’ll need for retirement? Can you decipher a financial statement? In other words, are you financially literate?
Understanding such fiscal concepts and knowing how to work with them are all aspects of financial literacy, which the President’s Advisory Council on Financial Literacy defines as “the ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial well-being.”
To stress the importance of personal finance, in 2004 the U.S. Senate declared that each April would be Financial Literacy Month. Since 2007, the National Foundation for Credit Counseling has released its annual Consumer Financial Literacy Survey, which features statistics on budgeting, spending, savings, debt, credit, housing and other areas of personal finance.
What does financial literacy mean to you? In what areas do you want to be more financially literate?