Establishing a strong financial framework requires adults to accomplish a range of goals. Keeping credit card debt low, contributing to savings, maintaining a cash reserve and building a healthy nest egg are just a few of the components that represent good financial health.
Credit counselors, financial advisers and industry professionals all agree that strong financial literacy is the bedrock of knowing how to accomplish these goals, so it’s important for adults to educate themselves on matters relating to money and debt.
A working paper authored by Dartmouth College economist Annamaria Lusardi focuses on the financial literacy of most Americans and found that too many adults are lacking the basic skills to make wise money and debt management decisions, according to the New York Times.
This includes tasks such as creating a budget, effectively paying down and curbing debt and calculating compounding interest. She notes that while adults between 23 and 28 have a working knowledge of personal finance skills, the general level is “pretty dismal … considering the complexities of the calculations involved in many financial decisions,” the Times reports. Further, she found that the level of sufficient financial literacy tends to decline with age.
Luckily, an abundance of financial resources exist that can help adults accomplish their goals, regardless of which phase or income level they are at in their lives. Individuals can subscribe to personal finance blogs, access budgeting spreadsheets, debt calculators and retirement resources to help them plan ahead.
In addition, more mobile applications are also being established to help adults manage their day-to-day transactions, save money on groceries, gas and other necessities and find the most affordable credit and banking products.
These resources can be an effective starting point for adults to learn the basics of handling their finances, but sometimes working face-to-face with a financial professional can be more beneficial. Advisers, credit counseling services and debt professionals can enlighten adults to income strategies that allow them accomplish particular goals, such as eliminating credit card or loan balances, to improving their overall financial standing.
Financial literacy is important to building a healthy future and avoiding money-related stress, so utilizing resources and working with professionals can greatly help struggling adults take the reins on their finances and work toward financial freedom.