By Dian Douglas
April is National Financial Literacy Month, a designation passed by the U.S. House of Representatives to raise public awareness about the importance of financial education. Everyday we make financial decisions that affect our long term financial stability. According to supporters of the resolution, financial literacy is an issue that should command our attention because many American are not adequately managing their finances for long term financial security.
National surveys show the savings rate is low, while the average consumer has three or more credit cards. To complicate the national picture, the mortgage industry is currently in a crisis, foreclosures are at an all time high. Currently, Florida is one of several states with the highest foreclosure rates. All of these issues increase the need for consumer knowledge of money and finance.
Education is the key to help move Americans toward improved spending and savings habits and raise the level of money invested in retirement plans. And, it is never too early to encourage long-term savings for future goals. According the National Endowment for Financial Education, surveys show as few as ten hours of education can influence the practices and financial knowledge of young people. Yet, most students have no formal education in managing money and family finance.
All consumers, regardless of age, need to understand there are many factors at play when it comes to managing money. A consumer’s decision mak- ing skills, how you spend, save and use credit determine whether you build wealth or continue to add to a lifetime of debt.
In recent years, the new law, Credit Card Accountability, Responsibility, and Disclosure Act has made the language of credit contracts more transparent. Creditors are now required to disclose in print, the cost of your balance if you only make the minimum payment. This is one change that has occurred as a result of the new law. Consumers now have financial disclosure information in terms that is understandable and can determine the true cost of borrowing money or using any form of credit.
Likewise, the new Consumer Finance Protection Agency was set up to combat fraudulent lending practice and make financial services work for Americans. This agency will gather and analyze information on consumer financial product, enforce Federal consumer financial laws and work to educate the public about financial literacy.
Everyday lessons can be learned about money and how to make decisions to get the most for your dollar. Learning to spend wisely and save money can be a priority for your family. Take time this month to learn something new about managing money, investing, or your rights as a consumer. To help you learn more about family finances contact the Madison County Extension Service.
The University of Florida Extension/ Madison County is an Equal Employment Opportunity Affirmative Action Employer authorized to provide research, educational information and other services only to individuals and institutions that function without regard to race, color, sex, age, handicap or national origin.