FINANCIAL FOCUS
OCUS April is National Financial Literacy Month, and a good time to boost your financial knowledge to help set the stage for a lifetime of financial stability.
Eighty percent of Americans who are confident in their financial knowledge are confident in their financial future, according to a 2023 Edward Jones study conducted with Morning Consult. That's an enviable place to be, and one you can create for yourself if you have a student mindset.
The study showed the most sought-after financial topics for learning are investing, debt management and preparing for retirement.
Investing
There is no “one-sizefits- all” investment strategy. That's because you invest to achieve what's most important to you.
It's not about chasing a certain return. Instead, the return you'll need on your investments is tied directly to your goals and how long you have before you'll need the money.
Learning about investing opens up a broad range of topics — diversifying your investments, managing risk, balancing goals, preparing for unexpected events, understanding the stock market and weathering volatility.
The more you know — and that doesn't mean being an expert, just having a working knowledge of investing — the better informed you are to make financial decisions in your best interest.
When it comes to investing, never be afraid to ask questions.
Debt management
Understanding how debt works, controlling expenses in a monthly budget, knowing where to go for help and making a plan are the keys to help you better manage your debt.
It may be a surprise that not all debt is negative. Paying off a mortgage or a student loan, for example, can help increase your net worth or generate future income. “Bad” debt with high interest rates, missed payments and multiple creditors, however, offers no future benefit and may become a burden.
Becoming a student of debt management can help you understand things like how much debt is too much and how to balance, consolidate and reduce debt payments while still investing to achieve your financial goals.
Preparing for retirement
It may feel easy to let other things take priority over retirement savings, especially when retirement feels like it's a long way off.
Yet, the earlier you save, the more likely you may be to achieve your retirement goals. You'll likely thank yourself down the road if you take the time to learn about saving for retirement.
This may include how to set tangible and actionable goals, how to determine the amount you'll need, the different types of retirement savings accounts and how to build a retirement savings strategy.
While you're learning, you can also start saving. Start saving what you can afford each month and gradually increase the amount each year, especially as your income rises.
Building your financial literacy doesn't stop with learning about investing, debt management or saving for retirement. You may want to know more about budgeting for young families or investing in a home or improving your credit score.
You can always educate yourself by reading or talking to people knowledgeable in these subjects. You also might find it valuable to work with a financial professional — someone who will take a holistic approach to your finances and make appropriate suggestions.
National Financial Literacy Month ends April 30, but the benefits of financial literacy can last a lifetime.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.
Edward Jones, Member SIPC
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