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April, already?

It’s Financial Literacy Month!

What is financial literacy? You’ve heard of literacy — That’s the ability to read and understand words.

Americans have always been obsessed with literacy. As early as 1620, the Puritans were required to teach their children how to read and write.  A lot of that had to do with wanting their children to be able to read the Bible, but the love of literacy has always been an American theme.  The Founding Fathers understood that the ability of Americans to read was essential for the survival of democracy, the rejection of tyranny and the transfer of knowledge and ideas. They knew that development of an educated workforce would lead to an economically prosperous nation.

In many places in the world at that time, the ability to read was considered a privilege of the wealthy — it was felt that ordinary people had no use for it. America was ahead of the pack because it rejected that old school notion that literacy was a privilege reserved for the wealthy and made literacy a high priority for nearly everyone. 

Financial literacy is the ability to understand how money works. Here we are in the 21st century and unfortunately some people’s attitudes about money are still old school: they believe that financial literacy is is not a skill needed by everyone — that it is a skill for the wealthy. That may have been an acceptable attitude 50 years ago, but the world has gotten rather complicated. More and more, our complex modern world revolves around money. I believe the ability to understand money is, in the 21st century, no less important than the ability to read. 

The ability to understand and manage your finances, and to build and manage your personal wealth has a huge impact on how you live, your standard of living, your quality of life, the level of education your children can attain, the kind of healthcare you and your family can afford, and more. The ability to build wealth even impacts your life span!

On a national scale, America’s lack of financial literacy creates a drag on the American economy. For example, people who don’t understand how money works can get into a lot of debt and that is bad for our economy. So no, financial literacy is not a privilege reserved for the wealthy. Nor is it a skill that only some of us need. In the 21st century everyone, everywhere, from every walk of life needs and deserves to be financially literate.

Susan Mulcaire