We’ve written extensively in this space how a large number of Americans struggle with financial basics for one reason or another, whether it’s inadequate savings toward retirement plans, the lack of a rainy day savings account to cover emergency expenses or even a lack of portfolio diversification necessary to truly grow wealth. And if you take a financial literacy quiz from Finny into consideration, perhaps it’s because a significant number of Americans are having a difficult time wrapping their heads around certain financial terms and topics.
According to Finny — a personal finance website — the average score on a basic financial literacy quiz that tested Americans on the likes of compound interest, credit scores and mortgages was just 66 percent. That’s a solid “D” if we’re going by the classic grade school rubric. A “D,” as in barely passing.
But if you’re among the many Americans that don’t have great financial literacy, all is not lost. There are a bevy of ways that you can improve your literacy and thereby improve your financial status as well. In this post, we’re not going to focus so much on what Americans don’t know, but what they can do and how they can attain the know-how to really help them succeed when it comes to their finances.
What You Can Do to Improve Your Financial Literacy
So how can you improve your financial literacy? Here’s a look at some ideas:
- Brush up on your financial reading: Subscribe to financial newsletters, bookmark websites of credible financial media outlets like CNBC, The Financial Times, The Wall Street Journal and more. You may even listen to some financial podcasts where hosts explain seemingly complex financial terms or practices in more easy-to-understand ways. The more financial media you consume, the more of an understanding you’ll develop.
- Work with a professional: Once you get a decent understanding of the financing basics, it might be worth it to work with a financial planner who can help you manage your assets and grow your wealth over time to meet your long-term financial goals. You’ll likely have to pay any financial planner a commission based on how much your wealth grows, so there’s not a ton of risk involved.
- Take some courses: It’s easy to find resources to learn finance basics if you know where to look. LinkedIn Learning has a plethora of courses on managing finances and you might even check with your local Community College or your local municipality’s community education curriculum for additional courses.
We encourage you to head over to Finny’s website and take the financial literacy course for yourself. And if you aren’t happy with your score on it, know that you can do something about it. There are a variety of resources at your disposal to help you improve your financial literacy and, ideally, your wealth.