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Are You Financially Literate? – Tips & Resources for Education on Money



Financial literacy is a big deal. In the United States, it’s among roughly 60 official month-long observances declared by presidential proclamation.

Just as February is Black History Month, May is Mental Health Awareness Month, and November is National Entrepreneurship Month, April is National Financial Literacy Month. In the wake of the global financial crisis of the late 2000s, and following years of unofficial observation and multiple state-level declarations, President Barack Obama formally recognized April as Financial Literacy Month in 2011.

Why did the federal government feel the need to devote 30 whole days to financial literacy programming? For starters, because financial illiteracy is expensive. In a 2019 study by the National Financial Educators Council, the self-reported cost of deficient personal finance knowledge in 2018 was $1,230 per respondent. That’s about 2% of the 2017 median household income.

If you feel like an incomplete understanding of basic personal finance concepts cost you last year, you’re clearly not alone. But financial literacy isn’t rocket science. With effort, you can overcome whatever knowledge gaps you face today and cease leaving money on the table. Start here.

What Is Financial Literacy?

“Financial literacy” describes the knowledge and skills necessary to effectively manage your personal finances and achieve complete financial self-sufficiency.

Financially literate consumers are equipped to make informed financial decisions about a host of money-related matters, such as:

  • Banking
  • Near-term budgeting
  • Using and managing credit and debt
  • Avoiding financial scams and exploitation
  • Setting and saving for financial goals
  • Long-term financial planning
  • Investing
  • Estate planning

Like language literacy, where your reading grade level quantifies your competency, financial literacy is gradated. Novices have little to no understanding of even the most basic financial concepts. Intermediates grasp the basics of spending and saving but may struggle with more abstract or longer-term concepts. Experts have the knowledge and confidence to manage all aspects of their financial lives and equip others – kids, parents, domestic partners, friends, employees – to do the same.

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How to Increase Your Financial Literacy

No one is born with expert-level financial literacy, and no one achieves it overnight. But that’s not to say that becoming financially self-sufficient requires years of intensive study – far from it. Here’s what you can do, right now, to begin or advance your own personal finance journey.

1. Know Yourself

The first step on your journey toward financial literacy is self-knowledge.

Yes, as your financial and personal circumstances change, so will your principles, objectives, and priorities. But that shouldn’t deter you from establishing a frame of reference in the here and now. Among other things, consider:

  • Your Time Horizon. What stage of life are you in? Younger consumers’ priorities naturally differ from older consumers’.
  • Personal Values. Consider any deeply held beliefs or values that may affect your financial behaviors. Some consumers aim to avoid debt at all costs, for instance. Others orient financial decisions around environmentalism, precluding luxuries like car ownership.
  • Goals and Objectives. What are you spending and saving for? Where do you want to be in five, 10, 20 years?
  • Risk Tolerance. Use a risk tolerance assessment to inform your investing decisions before you begin putting your money to work. The University of Missouri’s risk tolerance questionnaire is one of many examples.
  • Credit Profile. Even if you suspect you don’t have much of a credit history, find out for sure. Go to to claim the free credit reports you’re entitled to by law, then use a free service such as Credit Karma to periodically check your credit score and learn how to improve it.

This is just the start. As your financial literacy improves, you’ll gain more insight into who you are as a consumer, planner, and investor.

2. Always Consider the Source of Financial Information & Advice

Financial literacy requires voracious information consumption. Alas, not all financial information and advice is equally valuable. Always consider the source of any financial information you consume, including information published on personal finance blogs like Money Crashers. Yes, we strive to be unbiased and informative, but our content is written by a diverse roster of authors with diverse credentials, whose writing is informed by a combination of in-depth research and personal experience. Always consider information in light of its applicability to your situation and goals. The same goes for any personal finance website, publication, or podcast, no matter how authoritative it purports to be.

Be particularly wary of financial content from profit-driven financial companies, such as banks, investment firms, and credit repair agencies. For profit-driven organizations, publishing unbiased advice is secondary to selling their core products and services. They’re in the content marketing business, meaning their content is valuable to them only insofar as it increases their credibility in the marketplace.

Also be wary of what’s often referred to as the “financial entertainment complex.” Cutthroat competition drives financial entertainment outlets like CNBC and Motley Fool to promote controversial, contrarian ideas at the expense of sounder – if less sensational – viewpoints. Despite obligatory disclaimers, financial entertainment outlets may present as mainstream investing recommendations that aren’t suitable for most readers or viewers, with potentially adverse consequences for those who take them as gospel.

At Money Crashers, we put the fundamentals of financial fitness before all else and take a balanced, comprehensive approach to describing personal finance concepts and strategies. By contrast, sourcing information only from financial entertainment platforms – watching CNBC all day, for instance – is a sure way to distort your financial worldview.

When in doubt, turn to neutral, reputable sources, especially official government agencies such as the Consumer Financial Protection Bureau and Securities and Exchange Commission, and nonprofit research universities.

3. Seek a Range of Opinions & Advice

Always seek an assortment of opinions and advice about money matters. You wouldn’t opt to undergo major surgery on the recommendation of the first doctor in the phone book; why would you make a potentially life-changing financial decision on the basis of a single article or video?

By exposing yourself to a range of financial philosophies over time, you’ll gain the perspective necessary to sort valuable information and advice from bunk and the confidence necessary to articulate your own financial philosophy.

4. Master the Fundamentals

Turn to unbiased resources, including Money Crashers, to learn about foundational concepts such as compound interest, bank account types, account fees, deposit insurance, investment diversification, and the time value of money. The distinction between checking and savings accounts isn’t the most gripping topic, but every banking customer needs to understand it to avoid, say, excess withdrawal penalties for exceeding the six-withdrawal-per-month limit to which all U.S. savings accounts are bound.

5. Take Classes or Courses

Look for free or cheap personal finance classes and courses that you can take in your spare time. Brigham Young University, a private higher education institution based in Utah, has a pretty robust – and free – online personal finance education vertical, for instance. Indiana-based Purdue University has a retirement-focused course applicable to a range of financial situations. If you prefer in-person instruction, your local community college or library might have free or cheap evening or weekend classes.

6. Use Free or Low-Cost Money & Credit Management Tools

In addition to Credit Karma, Credit Sesame is another great free credit monitoring resource. As long as you can tolerate periodic offers for paid products and services from their partners, there’s really no reason not to opt into a free credit monitoring service.

It’s also wise to use a free or low-cost personal budgeting app, particularly if you’ve had trouble sticking to your budget in the past or you haven’t ever had a real budget. Mint is a popular, user-friendly option that doesn’t cost anything out of pocket; NeoBudget is a no-frills digital take on the cash-based envelope budgeting method; You Need a Budget claims its bells and whistles save the average user $6,000 per year; and if you love Google Sheets you can do your budgeting through Tiller.

Finally, consider an automated savings app – again, particularly if you’ve had trouble maintaining a steady savings rate in the past or saving at all. This space is crowded too; start by checking out Chime, which – unlike some automated savings solutions – has no monthly maintenance fees or hidden fees. Acorns is another to consider. When they round up your purchases, the difference is invested into an investment portfolio that you set up based on your risk tolerance.

7. Don’t Try to Walk Before You Can Crawl

Never overestimate your financial literacy. If you’re struggling to understand a particular financial product or behavior and can’t find easy, unbiased answers, steer clear until you feel more comfortable. For example, don’t open a margin account and start day trading before you understand how equity markets work; that’s a recipe for financial disaster. Instead, you can use a robo-advisor like Betterment, and they will handle most of the work for you.

8. Don’t Be Afraid to Ask for Help

Rather than overestimate your financial literacy, seek guidance from people and organizations that know more than you.

Use the Financial Planning Association’s free planner search tool to find Certified Financial Planners aligned with your goals and set up no-obligation consultations with each, even if you’re not yet ready to make a plan or hire an investment advisor.

If you’re struggling to pay down debt, use the U.S. Department of Justice’s list of approved credit counseling agencies by state to find reputable providers in your area.

If you’re preparing to buy a house or want to know what the process entails, look for a HUD-approved housing counseling organization and enroll in a class.

Just remember: Don’t take the word of any one person or organization as gospel. As in investing, the key to success in building financial literacy is diversification.

Further Reading on Financial Literacy

Ready to boost your financial literacy? We’ve gathered together pieces on each of the main financial literacy topics. Use the links to open articles that catch your eye, and remember to share your thoughts in the comments!

1. Money Management

From spending and saving to where you keep your money, learn how to handle your finances on a day-to-day basis.

Budgeting & Saving

Learn all about near-term budgeting and saving here.

Banking & Alternatives

Explore banking and legitimate alternatives to manage your money.

Managing Money With Your Partner

Things like budgeting and saving become more complex with two people. Here’s how to navigate household finances with your partner or spouse.

2. Understanding & Managing Debt

Make the wide and often daunting world of credit and debt less intimidating by reading these pieces.

Your Credit Score

Your credit score plays a crucial role in your financial health. Learn how credit scores work and what your score means.

Credit Cards

The credit card is the most common type of unsecured consumer debt. Here’s what you need to know to be a responsible credit card user.

Other Types of Debt & When to Use Them

Dive into the dizzying array of debt products available to financially literate consumers and learn how they work.

Paying Down Debt

These articles can help you manage and reduce existing debt loads.

3. Increasing Your Income

Explore these income-boosting opportunities and strategies to help shore up your budget and make it easier to plan for the future.

4. Financial Planning

Start here for guidance on financial planning and related concepts, such as taxes and goal-setting at different stages of life.

Setting Financial Goals & Principles

These articles cover the art and science of establishing your financial principles and setting achievable goals.


Taxes can be complicated, but you can’t avoid them. Here’s what you need to know to prepare yours.


You never know what the future holds. Here’s how to decide how much coverage you need to protect yourself against the unforeseen.

5. Investing

Explore the concepts and principles you must understand to make informed investing decisions.

6. Estate Planning

The sooner you start thinking about estate planning, the better.

7. Teaching Kids About Personal Finance

Not sure how or when to talk about money with your kids? Start here.

8. Avoiding Financial Scams

Financial scams are far too common. Learn how to spot them ahead of time and seek redress if you’re a victim.

9. Miscellaneous Financial Literacy Topics

These sundry topics are no less important for failing to fit into the categories above.

Final Word

It bears repeating: Financial literacy is a journey, not a jaunt. The above list is only a portion of the articles we offer on various financial topics – and comprehensive as we strive to be, we don’t claim to offer the last word on every single financial topic out there.

The best thing you can do for your personal financial literacy is to become a voracious, educated consumer of finance-related content. As you increase your information consumption, use your existing value system, personal circumstances, and life goals to inform your opinions and objectives.

And don’t be a stranger. We’re here to help you become a smarter, more confident consumer.

Brian Martucci
Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he's not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.

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