What do you know about money?
Just enough to pay the bills? Are you puzzled at where all your money goes each month, or are you confident about the financial decisions you make?
April is Financial Literacy Month, a perfect time to reflect on your money knowledge — and build upon it.
Financial literacy, by definition, is understanding essential financial concepts and having the knowledge and skills to use money in a positive and effective way.
Financial Literacy Month evolved from Youth Financial Literacy Day, an awareness day created by the National Endowment for Financial Education (NEFE) over two decades ago.
NEFE passed the responsibility for promoting Youth Financial Literacy Day over to the Jump$tart Coalition, a national nonprofit dedicated to improving financial literacy. In 2000, the coalition expanded the one-day awareness to a month-long celebration. It later dropped the “youth” label, and Financial Literacy Month became a time for Americans of all ages to reflect on financial literacy.
In 2004, Congress passed a resolution designating April as Financial Literacy Month.
Although we, at The Penny Hoarder, want folks to learn more about money year round, we hope you’ll spend some extra time this month brushing up on your financial knowledge. You can start here!
6 Stories to Read During Financial Literacy Month
Check out the following articles to learn more about financial literacy and basic money concepts. Then test your knowledge with our financial literacy quiz.
Uncovering America’s Financial Literacy Problem
If you know enough about money to get by, you may be wondering what’s the big deal about financial literacy.
The Penny Hoarder conducted a survey of more than 1,500 adults in 2019 and found out that those who lacked financial literacy earned lower incomes and saved less money than those who grew up discussing money topics at home or in school.
Having a solid grasp on money concepts can have a real impact on your household’s financial bottom line — which is exactly why we champion increased financial literacy this month.
Give the Next Generation the Gift of Financial Literacy
Financial Literacy Month is no longer just targeted to young people, but they stand to learn a lot about personal finance.
If you’re a parent (or have nieces, nephews, grandchildren or other children in your life), take the time to teach your kiddos how to use money wisely. Here is our guide for teaching kids about money management.
Once they know those basics, level up the lessons and teach them how to build wealth. Use these clever tricks to get your kids excited about investing.
Be the Boss of Your Money
Stop letting money slip through your fingers. Tell it what to do… with a budget.
A budget is your blueprint for how you want to use your hard-earned cash. Here’s a step-by-step guide to budgeting your money.
Become a Super Saver
Putting aside some of your income is great, but knowing how to accelerate your savings growth is even better.
Money that earns compound interest will result in more savings than just stashing cash under a mattress. But what is compound interest and how does it work? We explain.
Get a Handle on Your Credit Score
Your credit score is like a grade for how responsible you are when borrowing money. This score comes into play when you apply for a credit card, get car insurance and buy or rent a home — so it’s pretty important.
So how do you build up to a great credit score? These five factors are what matters when it comes to your credit.
Test Your Money Knowledge With Our Financial Literacy Quiz
1. True or false:
Learning financial literacy from an early age generally leads to earning more and saving more as an adult.
2. Children can learn about money management by:
A. Using money jars for spending, saving and giving.
B. Having an allowance.
C. Comparing the prices of items in the toy aisle.
D. All of the above.
3. Which of the following is an example of a budgeting method?
A. The 50/30/20 method.
B. The snowball effect.
C. The even-odd method.
D. The hexagon method.
4. Having a budget can help you with all of the following except:
A. Reducing frivolous spending.
B. Paying bills on time.
C. Negotiating your salary.
D. Reaching your financial goals.
5. True or false:
Personal finance is a required course at 87% of high schools nationwide.
6. Credit scores range from:
A. 0 to 100
B. 300 to 850
C. 200 to 600
D. A to F
7. When it comes to your credit score, this is the factor that matters most:
A. How much credit you qualify for.
B. The number of credit cards you have.
C. Making your debt payments on time.
D. Having a diverse mix of credit accounts.
8. Compound interest is:
A. Interest on interest.
B. What you get when you multiply the principal amount by the interest rate.
C. When your interest rate changes throughout the duration of the loan term.
D. Another term for simple interest.
9. This investment vehicle uses pre-tax dollars to grow your money:
A. Roth IRA
D. 529 plan
10. A fractional share:
A. Pays dividends 50% less often than whole shares.
B. Is only for minors who want to start investing.
C. Requires you to diversify the money you invest.
D. Makes it easy to invest small amounts of money.
(1) True (2) D (3) A (4) C (5) False (6) B (7) C (8) A (9) B (10) D
You’ve got 8-10 correct answers: You know your stuff! Hopefully you’re applying that financial knowhow in real life to build wealth. Join The Penny Hoarder Community to share your best money tips with others.
You’ve got 4-7 correct answers: You’re growing your money knowledge. Try to hone in on what stumps you the most. Credit and investing can be tricky. If you’ve got a personal money dilemma bothering you, send your questions to Dear Penny — our financial advice columnist — for some wise feedback.
You’ve got 0-3 correct answers: You’re in need of a financial literacy boost. Fortunately, The Penny Hoarder has tons of articles covering a variety of personal finance topics. Follow our social media pages (you can find us on Facebook, Twitter and Instagram) for frequently shared articles and money tips.
Nicole Dow is a senior writer at The Penny Hoarder.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.