Laura Levine is executive director of Jump$tart, a national coalition of organizations dedicated to improving the financial literacy of pre-kindergarten through college-age youth.
Do Americans have a good handle on their personal finances? The financial crisis opened consumers' eyes to how much there is to know and how important it is to pay attention. Many consumers took on obligations that they didn't fully understand, with a false sense of security that if the product was legitimate and the company well-known, nothing could go wrong. We need to protect consumers better, but consumers also need to be better educated.
What can individuals do to improve their financial literacy? It's their responsibility to learn the basics: Make savings a priority. Pay off debts. Do your research before making financial decisions. Seek out an adviser. Also find out as much as you can about the source of financial advice to see whether it's trustworthy. I don't think a financially literate consumer is necessarily an expert in all areas of finance. A financially literate consumer understands the basics and knows when to ask questions, where to get more information and when to get help.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
How can parents train kids to be financially savvy? Parents should talk to kids about money. Those discussions will vary, depending on the age of the kids and the comfort level of the parents. We don't have to reveal our complete financial statements to children in order to have a meaningful discussion about how some of our household decisions are made. The most important thing is to set an example. Even if we've made mistakes in the past (and who hasn't?), we can vow to do better, starting now. This can be as simple as creating a budget and trying to live within our means, or consciously setting aside savings. Kids of all ages will pick up on the effort.
Besides Kiplinger's, what are some good resources people can use? MyMoney.gov (opens in new tab) offers free, noncommercial resources. The clearinghouse at JumpStart.org (opens in new tab), for young people, reviews materials before listing them. Sites run by organizations that confer professional designations, such as Chartered Financial Analyst (opens in new tab) and Certified Public Accountant (opens in new tab), can give consumers a sense of the advisers they might be using.
-
As the Market Falls, New Retirees Need a Planretirement If you’re in the early stages of your retirement, you’re likely in a rough spot watching your portfolio shrink. We have some strategies to make the best of things.
-
Retirees: Your Next Companion May Be a Robot
happy retirement Robots may help fill the gap left by a shortage of humans to help older adults live independently.
-
Using Your 401(k) to Delay Getting Social Security and Increase Payments
retirement Your 401(k) can be a bridge from retirement to higher monthly income.
-
How Do I Stop Robocalls From Scamming Me?
retirement The scammers have automated their efforts to separate you from your money. We have ways to make it stop.
-
A Kiplinger-ATHENE Poll: Retirees Are Worried About Money
Making Your Money Last Concerns about recession, inflation and health care costs weigh on retirees and near retirees.
-
Grandparent Scams Get Victims in Their Hearts
Scams If you get a call from someone who claims to be your grandchild in trouble and needing money right away, be wary. Don’t send any money or give any information until you verify the story.
-
Tech Support Fraud Targets Seniors
retirement Get a message offering help with a computer problem you didn’t think you had? It’s probably a scammer looking for your money and personal information
-
What to Do With Money in a Former Employer’s 401(k)
Basics Leave it behind, move it to your new job’s plan, or roll it over to an IRA. Each of the options has pros and cons.
