Achieving a goal requires learning, experiencing, trying again, failing, and sometimes taking detours. The key is always to be aware of where you are on the journey, so you can take steps to move closer to your destination.
Strategic quizzes are critical to NFEC programs because they provide participants with immediate feedback on how much they have retained from their financial education. Take our free quiz to find out where you stand.
What is Financial Literacy?
Financial literacy is understanding money topics such as tracking spending, saving, paying down debt, and planning retirement. It also involves knowing how to make informed financial decisions that align with your goals and values.
Without financial literacy, people are more likely to get into financial trouble—for example, many millennials have large amounts of student loan and credit card debt.
Increasing financial literacy can help individuals avoid these challenges and become more self-sufficient. That’s why it’s so important for libraries to offer programs that teach these basics and help their communities become financially literate.
What are the Basics of Personal Finance?
Personal finance is a broad topic that encompasses everything from budgeting and banking to credit, debt, investing, and retirement. Knowing how to manage your money is essential for reaching your financial goals.
Start by understanding your needs versus wants. Needs include basic survival expenses like food, clothing, shelter, healthcare, and reliable transportation. Wants include vacations, entertainment, and home upgrades.
Next, learn about the basics of saving and investing your money. Try starting with a savings account or an online investment product that offers automatic payroll deductions.
What are the Basics of Investing?
To build wealth, you need to save and invest. Saving often means establishing automatic savings with an employer-sponsored 401(k) plan, but investing requires a deeper understanding.
You need to know about different types of investments and how they fit into the asset class hierarchy. You must also understand how different assets can grow and have potential risks.
You need to understand concepts such as compound interest. And you must avoid investing in fads and pitfalls with hidden costs or dangers. These skills are the basis for financial literacy. They can help you make informed choices that align with your goals and values.
What are the Basics of Saving Money?
Learning to save money can be difficult, especially if you’re dealing with debt or struggling to make ends meet. But it is a critical part of financial literacy.
It allows individuals to set goals, define expectations, and take the necessary steps to achieve important life-changing financial goals such as paying off debt, saving for retirement, or buying a home. It also helps people make sound decisions about investing, debt management, and other financial products like mortgages, credit cards, health insurance, and self-directed investment accounts. To help students better understand how to save, divide the class into groups and ask them to identify strategies that reduce consumption to increase savings.
What are the Basics of Debt Management?
Debt management is managing one’s financial situation by controlling spending and making timely payments. This can help people reduce debt, save for emergencies, and build credit.
To reduce debt, consumers should know what they owe and how much they pay each month. They do this by working out a budget and listing their monthly expenses, including living costs, periodic bills, and debt payments.
The NFEC believes that measuring participants’ knowledge of personal finance topics is crucial to evaluating the effectiveness of financial literacy curricula. Measuring motivation to learn also guides instructors in teaching the subject matter most effectively.
What are the Basics of Taxes?
There are many types of taxes, and it is essential to know which ones apply to you and when they’re due. Our quiz can help you learn more about the different types of income and property taxes and how they affect your finances.
The NFEC knows that effective financial education includes testing to measure motivation and current knowledge. Quizzes can also assess whether participants can take the first step to improving their finances. This last element is important because research has shown that many people have the knowledge but lack the motivation to act. The NFEC takes the time to address this gap.
What are the Basics of Retirement Planning?
Financial goals like saving money, paying debt, and planning retirement are easier when individuals understand basic personal finance concepts. This knowledge can help people avoid costly mistakes, such as making poor decisions about a credit card interest rate or investing in an unsuitable asset class, and make better choices about their short- and long-term financial needs.
It’s also essential to understand how retirement savings work, including the available accounts and how to maximize their growth potential. For example, people can increase their savings by leveraging an employer’s match or establishing an individual retirement account (IRA). They can create the financially secure retirement they’ve always dreamed of by starting early and planning.
