Consumer debt is on the rise, and it is no wonder why. Only 40 percent of U.S. adults keep a budget and track their spending, and 62 percent have less than $1,000 stored in savings accounts. On top of that, more than a quarter of the country have no savings at all.
These troubling signs point to a severe lack of financial literacy in our country. Knowing how to manage money, how money works in a real-world setting and how to use your money to establish financial security and stability is the key to remaining debt free and on top of your financial standing. If you and your family feel overwhelmed with your debt, some financial education may be the answer you are looking for.
The Impact of a Lack of Financial Literacy
Over 8,000 Americans from all across the country have taken part in the National Financial Literacy Test created by the National Financial Educators Council. While the test was designed to test the financial capabilities for 15 to 18 year olds, people of all ages have taken part in the assessment online with some shocking results. When averaging all the test scores of test takers over the age of 18, the resulting letter grade is a disappointing C-.
Most statistics on our nation’s financial literacy look pretty grim, and many Americans could stand to improve their personal financial situations. Current consumer debt stands as $11.52 trillion, and it continues to rise year after year.
If you worry about your finances, you are not alone. Efforts are constantly being made to raise awareness for financial literacy, and a growing number of Americans are seeking help with basic money matters. No matter how much you struggle with managing your money, a better financial future may be just around the corner.
Improving Your Financial Literacy
While we may be far from a national standard for financial education classes, there are things you can do to improve your own financial literacy and wellbeing. The information is out there, and it is up to you to start taking control of your finances. Here are some tips to help you get started.
1. Get Your Finances in Order
A budget is the best place to start getting your finances in line. Once you outline your income and track your expenses, you will have a better idea of where all your money goes each month – helping you uncover areas of frivolous spending. When you cut out the excess, you will be able to put more money towards pursuing your financial goals.
2. Make a Plan to Pay Off Existing Debts
Most Americans struggle with debt. Even if it seems impossible, there is a way out. Start by setting clear goals for yourself, tackling your debt one by one until you reach financial freedom. Your budget will be a valuable tool here, helping you recognize areas to cut back and apply more of your monthly income to repaying high-interest debts that eat away at your monthly earnings .
3. Keep Up with Savings Habits
After you have climbed your way out of debt, make sure you continue the savings and money management strategies you learned along the way. Continuing to educate yourself and saving money each month will help create a sturdier financial future for you and your family.
4. Don’t Face Your Finances Alone
No matter how crippling your debt may be, you don’t have to face the problem alone. Sometimes an extra set of eyes or expert advice is all it takes to help you achieve your financial dreams. Attend a personal finance workshop at your local credit union, read articles and eBooks online to identify new savings strategies and make sure to plan ahead to keep your finances moving forward.
Whether you are looking for help on debt repayments, saving strategies or are just looking to live a better life, get in touch with the financial experts at your local CHROME Federal Credit Union. Our representatives are dedicated to your financial wellbeing, doing whatever they can to help you reach your goals and move towards a better financial future. Start getting your finances back on track, and schedule an in-store appointment at CHROME today!