Effects Of Long Term Illiteracy On Family Financial Standings

Financial literacy is an important aspect of life, no matter what your age or income level is. Knowing how to balance a checkbook, manage a budget, find the lowest interest rates on loans, and choose the right investments can make a huge difference in your lifestyle and your ability to meet your financial goals.

Being financially literate has always been important, but it’s now more critical than ever. So many of us are now called on to manage our own retirement plans and insurance options and the financial marketplace has become crowded with so many choices that it can be hard to know what to do. Easy credit is also an issue as it cannot be corrected simply by taking classes such as accounting or CPA courses for learning how to be smarter with money. Poor credit is developed. You have to take special care not to get in over your head financially just because you have available credit. This is the thin line that separates beneficial credit and detrimental credit history. The bottom line is that consumers have to make more decisions and the options have become more complex than ever before.

The Cost of Being Uninformed:

It’s easy to rationalize inattention to financial matters. It takes time and effort to become informed and many people feel that this effort isn’t worth the benefit. However, there are few decisions we make that have the same lasting and direct impact on almost every aspect of our lives as the decisions we make about our money. Studies show that the more uninformed people are, the more often they run into financial trouble. Although one would think that the more people know, the less research they do, the opposite is true. People who know the least about financial matters are the least likely to do any research before making significant buying decisions, such as getting a mortgage.

Decision Making:

Making uninformed financial decisions can put an entire family in financial jeopardy, reducing the ability to do things like buying a home, buying a car, and financing an education. Property ownership and education go hand in hand with financial security and can be critical components of a comfortable retirement. Becoming more aware and informed about financial matters can also help set the stage for future generations to be successful instead of following a path to poverty and dependence. The key here is learning the basics of finance earlier in life and gradually increasing ones knowledge base as education continues.

Begin Building Your Wealth:

Retirement savings is another area in which it pays to have facts and information. The longer you wait to save, the harder it is to accumulate enough savings for a secure retirement. Those who start saving in their 20s only need to save about 10% of their income for retirement. But, those who wait until they’re in their 40s need to save 25% of their income. Trying to save such a large percentage of your income is extremely challenging for most people, so it’s much better to save early.

Help is Available:

Fortunately, there are plenty of resources available for those who need a little help. Financial advisors who have successfully obtained license through dedicated training are a readily available resource at just about every bank you’ll ever visit.  Another under utilized resource are CPA’s. This particular type of financial professional can help maximize one’s income and minimize taxes paid during a life time. This is a skill set that all CPA’s obtain during their education which usually begins with a Bachelors degree in accounting or business and ends with a highly detailed CPA Exam review. These licensed financial professionals can best answer questions and alleviate concerns by making sure that you have the information you need to make the best decision possible. They can also help you plan for life events like retirement and education and they can help you develop realistic budgets and make sure that you choose the right investments to reach your goals; whatever they may be. Every individual and family is different in terms of goals, therefore it’s very important that one utilize an experienced financial advisor or research the do’s and don’ts of how to how to hire the best CPA for your situation.

Being Financially Responsible Can Create a Better Today and Better Tomorrows Too:
Long term financial illiteracy can have far reaching consequences, not just for you but for your children and their children too. By taking the steps to understand the basics of personal finance and seeking help from experts, you can increase your family’s quality of life. Acting as early as possible gives you a head start on building financial responsibility and independence, which will pay dividends many times. This will positively affect you and your family for generations to come.