Thomas Batterman Provides an Overview of Financial Literacy Month
In 2003, the United States Senate passed Resolution 316, which officially recognized April as National Financial Literacy Month. As a result, many financial institutions and non-profit financial education organizations promote the month by hosting events that pertain to financial education. To go over the importance of the event, we spoke with fiduciary and financial advisor, Thomas Batterman.
For many individuals living in the United States, it doesn’t take much to become financially vulnerable. If income was put on pause, or an unseen medical expense came up, it might make a significant dent in their stability. According to the Federal Reserve, forty percent of individuals in the United States don’t have $400 set aside for an emergency. Additionally, 25 percent of Americans have nothing saved for retirement. Thomas Batterman explained that the S&P Global Financial Literacy Survey showed that only 57 percent of adult American’s know basic literacy concepts such as interest compounding, inflation and risk aversion. This lack of financial literacy means that most people are operating blind.
Another issue that threatens financial stability: the debt crisis. It has become increasingly easy to borrow too much in the United States and pay extremely high interest rates. According to the Federal Reserve, household debt levels have risen to roughly the same levels seen just before the Great Recession. The average household has $15,654 in credit card debt as of September 2017, $46,597 in student loans, and $27,669 in auto loans. As the median household income is just over $59,000, Thomas Batterman explains that being able to pay off these debts seems nearly impossible.
These statistics only reinforce the need for Financial Literacy Month. While policy experts, economists, and teachers are debating the extent to which personal finance education can reverse these statistics, learning about borrowing, saving, consuming, earning, investing, insuring, and comprehending risk are nevertheless important skills that can help people of all ages better manage their money and spending habits.
Thomas Batterman says that it can be argued that the inability to save in America is due to the rising income and wealth inequality. However, financial literacy needs to permeate all communities, regardless of demographics or socioeconomic standing. Implementing early financial literacy in the curriculum, media campaigns, corporate wellness programs, and ongoing parental instructions makes it more likely to build up future generations.
Thomas Batterman on Maintaining Financial Freedom
So how do you educate yourself on how to increase your financial freedom? The best way to start is small: read online blogs and articles on the subject, use a mobile budgeting app, or sign up for a personal finance class. Starting small allows you to build your financial literacy before you move onto more complex ideas. Being knowledgeable and prepared allows people to be in control of their lives and money and frees them from relying on the government or bank loans. The internet is a plentiful resource and can guide you along the path to true financial freedom.