Take Control of Your Finances This Week -- at the Local Library


Teacher libraryToo many Americans are woefully underinformed about financial matters. Surprising numbers of them are on shaky ground, largely because they never learned the basics of money management.

But the ranks of the financially illiterate might shrink a bit over the next seven days, thanks to the Money Smart Week program, a partnership between the American Library Association and the Federal Reserve Bank of Chicago.

First lesson: If you lack financial knowledge, recognize that you're not alone.
Take a look at the state of the average American's finances, taken from the 2012 Consumer Financial Literacy Survey:

  • 33% of Americans don't pay all their bills on time.
  • 39% have no non-retirement savings.
  • 39% carry debt on credit cards.
  • 80% say they could benefit from professional financial advice.

And a brand-new Northwestern Mutual survey found that 45% of Americans have no financial plan at all.

These problems are not new. In 2007, a Bankrate.com poll found that 47% of Americans -- roughly half of us -- find investing to be confusing. Only 29% are aware of the fees they're paying when they invest. Only 32% had an IRA.

These numbers spell trouble. Take credit card issues, for example. Many of those carrying revolving debt on credit cards are paying interest rates of 20% or more. On a not-unusual $25,000 debt, that's fully $5,000 per year just in interest, which could otherwise be put to better use.

Lack of knowledge about all of these things can lead to financial and personal heartache and headaches: If you have no non-retirement savings, you face possible financial ruin should you lose a job or experience a medical catastrophe. If you're not seeking the best mortgage deal, you might end up paying tens of thousands of dollars unnecessarily over the life of your loan. Paying your bills late? That can whack your credit score, which is checked by many prospective employers, landlords, and insurers, and which dictates the financial terms you're offered.

To the Rescue...

Enter the ALA and the Chicago Fed. They've dubbed April 21 through April 28 "Money Smart Week @ Your Library," and their initiative will feature financial literacy programs taking place at more than 200 libraries in more than 35 states.

The programs target Americans of all ages, and teach smart money management. Local community groups, financial institutions, government agencies, educational organizations and financial experts are also participating, and some content will be offered in Spanish. A wide range of topics will be covered, including debt management, retirement planning, savvy shopping, understanding credit scores, protecting yourself from identity theft, and kids and money.

Odds are, you can benefit from this program. Check with your local libraries to see if they're offering any Money Smart Week events. Consider going above and beyond, too, learning a lot more on your own.

There's a lot of guidance available for free online. Spend some time exploring the rich AOL DailyFinance site and The Motley Fool's Personal Finance and How to Invest nooks -- among many other great resources out there.

Take inspiration from the American Library Association and the Chicago Fed. Take control of your financial future by learning smart money management -- all year long.

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Most people do not know about Dividend Reinvestment Plans or DRIP. Put it into Google and a lot of web sites will come up for you to look at. I do not mean these plans will solve you financial situation. They are just an easy way to invest some money over the long term.

You invest directly with the company you choose, there is no stock broker involved. You open the account with the company's set amount and then you send a check in whenever you want. Rather than taking the dividends, they are reinvested in your account to buy more shares.

Buy a book that lists all the companies that have this plan and pick out what you like. Spend some time reading the information and when you are ready buy a three ringed binder and a 3 hole punch to keep your statements in. 10 years from now you will be glad you did.

April 23 2012 at 11:06 AM Report abuse rate up rate down Reply