May 16, 2016

Financial Literacy

Guest column submitted by U.S. Senator Mike Crapo

In a strained economy, putting together the financial reserves necessary to be able to meet financial challenges and retire without being stressed financially is indispensable.  Following an informed personal financial plan, even during tough times, can help improve conditions for our families.

Last month, the Senate unanimously passed a bipartisan resolution, S.Res. 427, that I co-sponsored that seeks to increase financial literacy that empowers individuals to make wise financial decisions and reduces the confusion caused by an increasingly complex economy.  In the resolution, the Senate recognized a number of alarming statistics reported by the National Foundation for Credit Counseling:  

  • Approximately 41 percent of adults in the United States gave themselves a grade of C, D or F on their knowledge of personal finance;
  • Twenty-four percent of adults in the U.S., or approximately 56,300,000 individuals, admitted to not paying bills on time;
  • One in three households reported carrying credit card debt from month to month;
  • Only 39 percent of adults in the U.S. reported keeping close track of their spending, a percentage that held steady since 2007; and
  • Thirteen percent of adults in the U.S. identified not having enough "rainy day" savings for an emergency, and 15 percent of adults in the U.S. identified not having enough money set aside for retirement, as the most worrisome area of personal finance.

These estimates compel action, and many people recognize they could use help with financial planning.  The resolution recognized that 75 percent of adults in the U.S. acknowledged that they could benefit from additional advice and answers to everyday financial questions from a professional. 

Thankfully, resources are available to help with financial planning.  For example, the Idaho Financial Literacy Coalition, at www.idahoflc.org, provides information to help secure your financial future, including tips on budgeting for college, managing credit and debt, buying a home and other financial educational materials.  The University of Idaho Extension, at www.extension.uidaho.edu/personalfinance/, also offers access to information from family economists across the nation, such as recommendations about what important papers to keep, how to organize them and considerations for setting financial goals and establishing budgets.  These are just a few of the financial education resources available to help with spending plans, rebuilding credit and planning for retirement.  

April is a great time to focus on your budget and get the information you need to make smart decisions.  Establishing a sound financial plan, managing your money and creating a long-term investment strategy helps individuals and families make wise financial decisions.  This also holds true for the federal government, which has amassed a more than $19 trillion national debt.  We can work together to take steps now to get on a better financial path.

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