Financial literacy is defined as, “the ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial well being” (President’s Advisory Council on Financial Literacy in 2008).
Financial literacy includes skills, including:
- Building an emergency fund
- Understanding how credit works
- Understanding how credit cards work
- Understanding how interest compounds over time (tie into savings concept)
- Understanding the basic concepts of a mortgage
- Understanding basic insurance needs and products
- Awareness and understanding of what programs/benefits are available to you through your employer or membership organizations
- Having a retirement plan
To learn more about financial literacy, click on the personal finance and student debt tabs.