tipThe financial reform bill Congress would like to pass by the Fourth of July consists of establishing a new Office of Financial Literacy. The new bill also consists of a new Consumer Financial Protection Bureau to enforce ethical behavior from banks. But ultimately, consumers will have to educate themselves about money management to stay out of financial trouble. The Office of Financial Literacy is going to try to make it easier.
Article resource: Office of Financial Literacy tucked away in financial reform bill by Personal Money Store
Financial literacy national strategy
The Office of Financial Literacy isn't the first effort by the government to encourage financial management from consumers. A 2003 law that provided individuals a free credit report also established the Financial Literacy and Education Commission, which was charged with creating a national strategy for financial literacy. In 2004 the FLEC launched the MyMoney.gov website to provide a location where consumers can find money management tools and also some useful government financial information.
The financial literacy site for the FLEC
The FLEC financial literacy site got a new look pretty recently. The new version of the site creates online access where users can discover information about how to plan for life events that have financial implications, such as birth or adoption of a child, home ownership or retirement. There are also answers to questions users might have about a variety of personal or professional situations. MyMoney.gov will give users money-management tools including a savings calculator, household spending budget worksheets and a college prep checklist.
Americans literally lazy about finances
To promote financial literacy, the government has pushed knowledge a lot more than regulation. The conjecture is that the more high-quality information and money management tools consumers seem to have, the better choices they will make. But most Americans are financially lazy. It's common knowledge that we should spend less, conserve more and then make an effort to shop around for the best credit card rates. Many people do not.
American financial literacy lacking
In a survey that was done about American financial literacy, the Wall Street Journal reports the Finra Investor Education Foundation — the research arm of the securities industry regulator — found that about half of those 45 or older hadn't tried to calculate their retirement needs. About half of the 1,500 individuals who were surveyed also admitted to at times carrying a credit-card balance and paying interest. And only one in five knew that when interest rates rise, bond prices fall. In addition, the survey found that 57 percent of adults who earn a lot more than $ 75,000 a year do not shop around for their credit cards, and 46 percent don't compare their prices on auto loans. Plus, most adults don't check their credit records each year.
The Key will always be debt to income ratio
Financial literacy's worst consequence is debt. According to Seerpress.com, even though the current average debt-to-income ratio of in America is down to 122 percent from 133 percent in 2007, it nevertheless should be below 100 percent. In contrast, from 1960 to 1985, the debt-to-income ratio in The United States was way below 70 percent. The government is offering free advice to help. Spending less than you make could be financial literacy. That is your personal responsibility.
A lot more data about this topic at these websites:
FLEC website
205.168.45.52/
Wall Street Journal
online.wsj.com/article/SB10001424052748703280004575309143171720002.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsTop
Seerpress.com
seerpress.com/four-things-that-could-help-you-financially-understand-money-save-money-stop-borrowing-money-and-think-outside-of-the-financial-box/1795/
