knowing what you need to know to achieve your financial goals
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- 1. Financial Literacy: Knowing What You Need To Know To Achieve Your Financial Goals
2. Americas financial literacy
- American families:
- The average American family spends $1.22 for every dollar it earns.
- Onein five American families with annual household income of less than $50,000 is spending 40% of after-tax income to service its debt.
- In 2003, the average American household owed $8,000 in credit cards, compared to $2,600 in 1989.
- In 2003, 1.6 million Americans filed for bankruptcy the highest amount in history.
3. Americas financial literacy
- 2 out of 3 households will probably fail to realize life goals
- Financial illiteracy is passed to the next generation
- Average high school senior failed 2004 financial knowledge survey
4. What is Financial Literacy? 5. Financial literacy
- The ability to effectively evaluate and manage ones finances in order to make prudent decisions toward reaching lifes goals
- The understanding of:
- Cash flow
- Basic economic/financial concepts
- Debt/risk management
6. Achieving financial literacy
- Five Key Areas of Personal Finance:
- Money and income
- Money management
- Spending and debt
- Savings and investments
- Risk management
7. Money and income
- Time is money
- How many hours do you need to work to pay for your mortgage, car insurance, electricity bills, extras, etc?
8. Money management
9. Spending and debt
- Benefits and costs of spending alternatives
- Credit as a basic financial tool
10. Savings and investing
- Saving means not spending money.
- Investing means that you earn a return on the money you put into it.
11. Risk management
- Understanding the markets
- 50% of Americans own stocks
- Identity theft
12. Financial literacy isnt justa matter of knowing what you have and knowing your options.It is a matter of planning for lifes milestones. 13. Creating your firstoverall long-term financial plan 14. Buying your first home
- Establish good credit
- Understand real costs
- Assess risks
15. Getting married
- Understand financial partnership
- Establish separate and joint credit and bank accounts
- Create wills and trusts
- Identify beneficiaries
- Choose owners on title assets
16. Financing a family
- Education, health care, child care
- Manage risk, insurance
- Create wills
- Instill financial literacy
17. Starting a business
- cash flow
- expense timing
- Manage income and expenses
18. Planning for Retirement
- Determine how much money you will need.
- Determine where your retirement income will come from.
- Devise a budget and investment strategy to help you meet your goals.
19. Preparing a will
- Designate beneficiaries
- Determine asset distribution
- Identify insurance
20. Unexpected milestones
- Sandwich generation
21. Financial literacy education
- Lifelong learning courses
- Financial media
- Internet resources
- Your CPA
22. For more information
- www.360financialliteracy.orgfeatures financial education to help consumers at every life stage .
23. Financial Literacy: Knowing What YouNeed To Know To Achieve Your Financial Goals 24.