April is
Financial Literacy Month
Financial literacy is for all ages
Congress designated April as Financial Literacy Month
to recognize the serious negative consequences that result from lack of
understanding personal finances.
Being
financially literate means knowing how to manage money, using credit
effectively, building wealth, avoiding scams and making sound financial
decisions, explains Darryl Dahlheimer, manager of Financial Counseling for
Lutheran Social Service. “It really has nothing to do with the amount of
your income,” Dahlheimer said. “Being financially literate means knowing
what to do with your paycheck once you’ve earned it.”
People get
in financial trouble in two ways related to lack of financial literacy,
Dahlheimer says. First, people spend money they don’t have and get into
unmanageable levels of debt. Second, people sign up for things they don’t
understand and then get stuck in contracts they are unable to honor. “The
average credit card balance carried in the U.S. is $9,000, a clear sign
that many of our citizens are in over their heads,” Dahlheimer said. “To
make matters worse, much of their monthly payments are going to pay
interest.”
Dahlheimer
added that financial literacy is for all ages:
Young
adults: If you’re a young adult, you may be just graduating from college
or are out on your own for the first time. Get some practice with good
habits, like writing down a budget and spending only the money you have,
or by getting a credit card but paying the balance in full each month so
you have no interest charges.
Middle Age:
Parents and middle-agers need to start saving for retirement. Sign up for
your employer’s 401k or 403b retirement plan, or set up an IRA and put
money into it regularly. At the same time, get help to pay down credit
card debt faster through a debt management plan at a reputable agency that
is a member of the National Foundation for Credit Counseling (LSS
Financial Counseling is a Minnesota-based NFCC member).
Seniors:
Senior citizens often encounter financial stress and worry when they’ve
been victims of identity theft or consumer scams. Take action to get
control over your finances and report financial fraud and scams to the
Minnesota Attorney General’s hotline at 800-657-3787.
No one is
born financially literate but everyone can learn. Just like driver’s
education classes that can make safer drivers, make sure that you get
educated before you go “behind the wheel” with credit and debt. Lutheran
Social Service Financial Counseling has free tip sheets on consumer
finance at its website www.lssmn.org/debt and offers budget counseling and
debt management plans to help you get somewhere good on your financial
journey. For more information, call Lutheran Social Service at
1.888.577.2227
