Raise your hand if you know that April is financial literacy month. While financial literacy may not be glamorous or popular, (you can put your hands down now) I think it is needed and necessary. Most American’s could use a finance class. I’m talking about a complete fundamental financial education, without distracting and unnecessary details that most so-called financial experts try to convince you that you need to understand finance. You don’t. Money management isn’t complicated. I wrote Money Smart with this in mind.
Fifty years ago, personal money management was a fairly simple thing. People cashed their paychecks every Friday and set aside the cash needed for the upcoming week. If you wanted to buy something, you saved for it. Most workers didn’t have to save for retirement, as the company they spent most of their lives working for provided an adequate pension plan.
Since then, the incredible growth of middle-class affluence, the introduction of the 401K, and a multitude of new borrowing options including the credit card have brought financial complexities that most people still do not fully understand. Some people choose to turn over a majority of their key financial decisions to so-called financial experts and others don’t, but either way many still lack a fundamental understanding of what they are doing with their money.
That lack of understanding and control of their finances costs many families a lot. 9 million families and counting have now lost their homes, over 10 million baby boomers can’t retire, 60% of Americans now live paycheck to paycheck, and money is the #1 source of unhappiness in our society these days.
Financial experts and financial media have perpetuated a damaging myth that personal money management is very complicated. The truth is that it is not. Smart money management is something almost anyone can do, provided it’s explained properly. That’s why I spent several years of my life writing Money Smart. To me, the choice is very clear. Take charge of your money. Learn what you need to know, and then trust yourself. Financial Literacy Month is the perfect time to start.