Financial Literacy Month: Making the Most of It


April is National Financial Literacy Month. The purpose of Financial Literacy Month is to raise the level of financial literacy in the United States. Financial Literacy month began in April of 2004, arising out of Youth Literacy Day.

The Jump$tart Coalition for Personal Financial Literacy, a 501c(3) organization committed to youth financial literacy, was the original champion of Financial Literacy Month. In 2004, the United States House of Representatives passed a bill supporting the goals of Financial Literacy Awareness Month through the efforts of the federal government, schools, local organizations and other non-profits.

Why Financial Literacy Month?

Unfortunately, there is too much financial illiteracy in this country. Far too many adults do not understand the basics of finance. The premise is that a month focusing on improving everyone’s financial literacy is a positive for everyone, from our youth to adults.

We see it all of the time. Many otherwise smart and savvy adults do not understand some of the basics like:

  • How do loans work? How do I figure out the total cost of a loan?
  • How do I budget?
  • How do I balance saving for the future with my immediate financial needs?

Overall, basic financial literacy is lacking among a sizable portion of the population. Too few adults are financially educated in the basics of personal finance. This can hold people back – not only in their personal lives, but also professionally as financial issues pervade our working lives as well, regardless of what profession or industry you are in.

How to improve your finances during Financial Literacy Month

Here are some thoughts about ways to focus on improving your own financial literacy and that of your loved ones during Financial Literacy Month and throughout the year.

Get in the habit of reading financial materials or find a webinar on personal finance. Even if you feel comfortable in this space, keeping up to date can never hurt. If you have children, be sure to encourage them to learn about personal finance. Whether it is helping them to open a savings or investment account or finding a course geared towards their age level, learning about even the basics of managing their own money is a lifelong gift parents and grandparents can give to the next generation.

This is a good time to review your own budget. Are you on top of all monthly bills versus what is coming in each month? Is your debt under control? Are you saving enough for retirement, your children’s education or other financial goals?

A key step is to be sure that you have a sufficient emergency fund in case it is needed to cover expenses if you lose your job, unexpected major repairs to your home or car or costs related to an illness that are not covered by insurance. Experts typically recommend that you have at least six months’ worth of your normal monthly living expenses in a savings or money market account that is readily accessible if needed.

This is also a good time to get a handle on both your debt and your credit rating. What is your debt-to-income ratio or DTI? This is the ratio of your monthly rent and payments on outstanding loans and other debt compared to your monthly take home pay. This ratio is often reviewed by mortgage lenders and others. A poor DTI ratio can result in paying more for a mortgage or being denied altogether.

Your credit score is important for a number of reasons. It impacts your ability to borrow and the cost you will pay to borrow. This impacts everything from a mortgage to a car loan to the interest rate on any credit cards. Additionally, a low credit score can impact other aspects of your life such as seeking employment. A poor credit score can be a red flag for employers especially if you are seeking a job in the banking or financial sector.

Financial Literacy Month is a great time to begin educating the next generation about money. If your kids earn money from babysitting, mowing lawns or other activities, open a bank account for them. Teach them about saving up for the things they want. Overall, help your children learn sound money habits at an early age. This is one of the best gifts you can give to them.

For more tips on ways to improve your financial picture contact your Wedbush financial advisor.



These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. The information in these materials may change at any time and without notice.