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A Financial Adviser’s Practical Perspective of Financial Literacy Awareness

What is Financial Literacy?Guest post by Chris Gann, Redwood Financial-Senior Vice President.

April is a very busy month; it is Animal Cruelty Prevention Month, Earth Month, Jazz Appreciation Month, National Volunteer Month, National Poetry Month, and even National Lawn Care Month. There are at least 14 other national topics assigned to April. Taxes are also due.

During this busy, tax filled, stressful month let’s not forget what congress initiated in 2004.  In March of that year the Senate passed Resolution 316 that officially recognized April as National Financial Literacy Month. What is financial literacy? After discussing this topic with several fellow financial advisers I came up with a definition that attempts to explain financial literacy. I believe financial literacy is a good faith attempt to raise public awareness and understanding about the importance of financial strategies, tools, and concepts in the United States and the serious consequences that may be associated with ignoring the importance of establishing short term, medium term, and long term financial goals. This definition will start us on a path of understanding, but will not transport us to our destination. An easier way to understand financial literacy is through a story about Larry.

The education process

Larry is one of my most educated clients. Larry’s financial literacy program started before a definition of financial literacy even existed. I met Larry 19 years ago. Larry was a mechanic for a Texas ISD. Larry was told to attend my mandatory seminar explaining TRS and supplemental retirement tools. Larry took notes during the seminar; a rarity. Afterwards, Larry sat down to tell me about his credit card debt, medical bills, living expenses, and his family. I asked Larry if he had an emergency fund. The answer was no. Larry was given a short term goal to save $2000 in an emergency fund savings account. After seven months the goal was accomplished and Larry wanted to start a 403(b). Throughout the next 19 years Larry and I would establish more short, medium, and long term goals. Larry would change ISD’s and always keep me up-to-date on his employment. Larry and I would meet annually to review the goals and discuss new savings strategies. Larry would call me with questions about different types of investments. In between the meetings and calls I would send Larry articles, newsletters, flip-books, videos, and other educational materials.

Over our 19-year financial relationship Larry would learn about financial markets, different investment options, life insurance, and other financial topics. Larry created a financial literacy campaign without realizing what he was doing. Larry had a tenacious drive to establish his financial goals. Larry is now retired, he receives money from TRS, Social Security, and his own personal investments. It has been my pleasure to work with Larry to create a financial literacy program that not only helped him meet his goals but is still being used today to help other educators meet their goals.

Take a moment this April to review your personal finances and establish your own set of financial goals. Most people don’t regret saving for retirement, they only regret not saving enough.

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