America faces a financial literacy crisis, as evidenced by rising unsecured debt levels and credit card misuse. Two-thirds of households will likely fail to achieve their life goals due to financial illiteracy. Financial literacy involves understanding key areas like money management, spending, savings, and risk to achieve long-term goals like homebuying, retirement, and unexpected life events. Lifelong learning is needed to maintain financial literacy.

1. Financial Literacy:
Knowing What You Need
To Know To Achieve Your
Financial Goals

2. America’s financial literacy
- The Federal Reserve is looking at $2.4 trillion in
unsecured debt and the numbers keep rising.
- One in 10 consumers has more than 10 credit
cards.
- One in 50 households carry more than $20,000 in
credit card debt.
- The rise in the cost of living has outpaced income
growth over the past 12 years.

3. America’s financial literacy
• Two out of 3 households will probably fail to
realize life goals
• Financial illiteracy is passed to the next
generation
• Only five states require high school students
to take a class about money (VA is one of
them)

4. What is Financial Literacy?What is Financial Literacy?

5. Financial literacy
• The ability to effectively evaluate and
manage one’s finances in order to make
prudent decisions toward reaching life’s goals
• The understanding of:
- Money
- Cash flow
- Basic economic/financial concepts
- Debt/risk management

6. Achieving financial literacy
• Five Key Areas of Personal Finance:
- Money and income
- Money management
- Spending and debt
- Savings and investments
- Risk management

7. Money and income
• Time is money
• How many hours do you need to work to pay
for your mortgage, car insurance, electricity
bills, extras, etc?

8. Money management
• Budgeting
• Prioritizing

9. Spending and debt
• Benefits and costs of spending alternatives
• Credit as a basic financial tool

10. Savings and investing
• Saving means not spending money.
• Investing means that you earn a return on
the money you put into it.

11. Risk management
• Insurance
• Understanding the markets
- About 50% of Americans own stocks
• Identity theft

12. Financial literacy isn’t just
a matter of knowing what you
have and knowing your options.
It is a matter of planning for
life’s milestones.
Financial literacy isn’t just
a matter of knowing what you
have and knowing your options.
It is a matter of planning for
life’s milestones.

13. Creating your first
overall long-term financial plan
Creating your first
overall long-term financial plan

14. Buying your first home
• Establish good credit
• Understand “real costs”
• Assess risks

15. Getting married
• Understand “financial partnership”
• Establish separate and joint credit and bank
accounts
• Create wills and trusts
• Identify beneficiaries
• Choose owners on title assets

16. Financing a family
• Budget
- Education, health care, child care
• Manage risk, insurance
• Create wills
• Instill financial literacy

17. Starting a business
• Understand
- cash flow
- expense timing
• Manage income and expenses
• Taxes

18. Planning for Retirement
• Determine how much money you will need.
• Determine where your retirement income will
come from.
• Devise a budget and investment strategy to
help you meet your goals.

19. Preparing a will
• Designate beneficiaries
• Determine asset distribution
• Identify insurance

20. Unexpected milestones
• Loss
• Sandwich generation
• Divorce

21. Financial literacy education
• Lifelong learning courses
• Financial media
• Internet resources
• Your CPA

22. For more information
www.360financialliteracy.org features financial
education to help consumers at every life stage.

23. Financial Literacy:
Knowing What You
Need To Know To Achieve
Your Financial Goals
Financial Literacy:
Knowing What You
Need To Know To Achieve
Your Financial Goals

24. QUESTIONS