Building Your Financial Literacy
Starting your financial life and making the decisions that go with your independence can
be intimidating. The issues can be complex, the consequences of your decisions can be
profound and it can be difficult to find someone to rely on. You can turn to your friends or
your family for some help and guidance, but ultimately you must assume the responsibility
for making and living with your financial decisions.
The good news is that with some time and effort you can become sufficiently well enough
informed to make sound decisions and feel comfortable with those decisions. The additional
good news is that by starting early to learn more about your finances, you will have longer
to put your knowledge to work and reach your financial goals.
Here are some ideas to help you learn to make better financial decisions and take control
of your financial future.
1. Take advantage of the resources on the Internet. Many large and reputable
financial institutions (banks, credit unions, brokerage firms, mutual fund companies
and insurance companies) have extensive libraries on their websites that address many
of the issues you will face. Just be sure that the websites you visit and learn from
are legitimate and have your best interests in mind.
2. Read some of the personal finance columns in the newspaper. Many
syndicated columnists address complicated issues and boil them down to fundamental
approaches that you may find helpful.
3. Talk to knowledgeable people. Your parents and friends that have financial
experience can be valuable resources. They may have already dealt with an issue and you
can learn from their experiences. If you speak with a sales person, remember they may
try to convince you to buy something, so be careful. If it is a very critical issue or
one that involves large sums of money, consider talking with an accountant or
4. Read a personal finance magazine. While you may not want to spend the
money to subscribe, by buying one occasionally or reading one in a waiting room, you
may find an article or two that is interesting and relevant.
5. Consider joining an investment club. There are thousands of organizations
that meet regularly and actually make investments. Find one that suits your budget and
that meets at a convenient time. You may not make a lot of money from the investments,
but the discussions can be very informative.
6. Buy a personal finance book. Every major bookstore has an aisle with
dozens of books. Find one that seems interesting and use it as a reference tool.
7. Consider personal finance software. Using a program like Quicken or
Microsoft Money can make your bill paying and record keeping easier and faster. By
spending less time on those items, you can devote your serious finance efforts to
learning more about handling major financial issues. These programs also have
information or help sections you may find interesting. If you are really interested in
learning, you may even want to consider a tax return preparation program like TurboTax.
Using a program to prepare your return will teach you a great deal about taxes.
It is never too early (or too late) to improve your financial literacy. In fact, if you
avoid major mistakes and do some of the most basic things, you may find yourself on the road
to controlling your financial future with a lot less financial anxiety.