A catch phrase in today’s struggling economy is the importance of becoming ‘financially literate’. Financial literacy incorporates the concepts of economics, budgets, investments, taxes, insurance and money management skills and how they may be affected by economic conditions. We have little control over the big picture when it comes to the economic woes of the U.S. but we can take on the important job of education to help prepare and educate future investors and consumers.

Capital One Financial Corporation recently conducted a survey that measured Americans’ Financial IQ. Fewer respondents said they understand financial fundamentals compared to previous years and most admitted they’re not putting enough into savings. The survey shows a 5% decline in consumers who felt highly knowledgable about personal finance, from 64% in 2007 to 59% in 2009.

In today’s struggling economy, for example, a majority of credit cardholders do not understand the changes that lenders are making to their accounts that could result in a lifetime struggle with debt. As economist and Yale professor Robert J. Shiller recently wrote in The Wall Street Journal, “This nation needs to consider how it can help the great mass of investors better handle financial affairs — not only their homes, but credit, loans, medical, and retirement planning.”

The foundation to financial success is to become knowledgable about all of the technical terms and confusing language and concepts and then putting them into action. Mastering economic and financial issues takes time and has no value, if it’s not put to good use. Seminars or talks organized by community services or financial organizations, books and periodicals, business magazines like Forbes and Business Week, the business pages of newspapers are all ways you can pursue financial literacy. But perhaps the easiest way is to talk with your business colleagues, friends and family - someone who is successful, respected and has experience with financial matters.

Posted in Credit Tips, News & Info

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