April is Financial Literacy Month – Why Financial Education Matters

Patti Fagan, Award-Winning Financial Coach

April is National Financial Literacy Month. What’s your plan for a safe and secure retirement?

This Forbes article speaks to the need for hard-working Americans to make financial literacy a priority. It cites a gobankingrate.com survery, which states:

50% of Americans have less than $1000 in savings

 

What are these people supposed to do about retirement? How long are they going to have to work? And, when they can no longer work – due to frailty or ill health – where will they get enough money to pay for things such as healthcare costs?

A lot of people mistakenly think that Medicare will pay for all medical costs. But that’s not true. A portion of the costs will be paid out-of-pocket.  Thankfully, there are ways to pay for excess costs such as long term care insurance and Medicare Supplements. But if these hard-working Americans don’t even have $1000 saved, how will they pay for premiums to buy long term care and Medicare Supplements?

The answer is we all have to pay close attention to our finances. We need to live within our means and make a plan to save money for the future.

I like the suggestions made in the Forbes article:

Financial literacy needs to permeate all communities, regardless of demographics or socioeconomic standing, especially families with young children. We need early financial education in the home, mainstream financial literacy programs starting at a young age, and government funding for a public awareness campaign much like those on public health and safety issues. It should be incorporated into school curricula, media campaigns, corporate wellness programs, and, most importantly, ongoing parental discussions.”

 

I agree with the writer that Americans cannot afford to depend on the government to take care of their financial needs. Especially when it comes to retirement. With $21 Trillion in debt, it’s clear the government isn’t exactly financially savvy.

As a nation, we clearly need to take our individual financial health more seriously. In addition to the fabulous suggestions the article makes….

Here’s a quick 10-point checklist to help you assess your progress on your savings goals:

1. Have savings and debt management goals in place.

2. Have a plan to reduce and eliminate credit card debt as soon as possible.

3. Save 10-20% of your income for retirement.

4. Have an emergency fund of $1000 to $3000 for unexpected expenses.

5. Contribute to work place retirement plan.

6. Contribute monthly to retirement savings outside of work.

7. Automate savings plan outside of work.

8. Have a plan to pay off mortgage and other debt before retirement.

9. Have a plan to create a guaranteed lifetime income stream utilizing a deferred annuity.

10. Have a plan to cover healthcare costs in retirement not covered by Medicare, such as long term care.

 

I want hard-working Americans to experience the freedom and feeling of security that comes from having a sound retirement plan in place.

All you have to do is make a decision to take action toward your future financial security goals. Pick one item off the checklist above, and one tip from the article to implement today. Then continue to do something daily toward your goals.

So what’s one baby step you can take today or this week to secure your financial future?

Do it now. Your future self will thank you for it.

You got this!

Here’s to your financial freedom!

Please note: I reserve the right to delete comments that are offensive or off-topic.

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