The BBB of Metro NY Celebrates National Financial Literacy Month:
Do You Know How Your Money is Doing?
Understanding your money and how to leverage it is a topic covered in National Financial Literacy Month. The FINRA National Financial Capability Study recently looked at the spending and saving habits of Americans and here is what they found:
Most Americans lack emergency savings or “rainy day” funds. Only 49 percent of survey respondents reported that they had set aside funds sufficient to cover expenses for three months in case of sickness, job loss, economic downturn or other emergency.
The majority of Americans have not done any retirement planning. Only 42 percent of the FINRA survey respondents who weren’t yet retired said they had taken the time to calculate what they would need.
Well below half of Americans have saved money for college. Only 41 percent of those with financially dependent children have set money aside for a college education.
BBB recommends that everyone do the following:
Start calculating now. You are never too young to start planning for retirement. While individuals increasingly have to take responsibility for their financial security after retirement, the majority of Americans appear not to have done any retirement planning. Decisions about how much to save in order to afford a comfortable retirement require collecting information about several important variables (including Social Security and retirement plan benefits) and doing some calculations.
Budget appropriately when it comes time to pay for a child’s education.
Over the past decade, tuition and fees at public colleges and universities have increased more rapidly than they did during the 1980s or 1990s, rising by an average of nearly 5 percent each year (adjusted for inflation). With this trend unlikely to abate, an average American family with children can expect to dedicate a sizable share of their resources to paying college tuition.
Manage your debt. One of the best ways to ensure a brighter financial future is to manage and eliminate costly debt. BBB offers “Managing Credit – Made Simpler,” an online learning tool for consumers and small business owners.
Avoid “get rich quick” schemes. BBB exposes scams and frauds every day. Sadly, many of these are aimed at investors who have done the right thing so far and saved some money, but make a mistake when it comes to investing. BBB recently partnered with the FINRA Financial Education Foundation to promote smart investing and to help consumers avoid investment scams.
For tips on how to take control of your debt, visit http://newyork.bbb.org/debt/.
For more information on businesses, charities and investments you can trust, visit www.bbb.org.