According to the Investor Education Fund, financial literacy is best defined as: the set of skills and knowledge that allow you to understand the financial principals needed to make informed decisions and which financial products impact fiscal well-being.
Financial illiteracy influences individuals of all ages.
Adults aren’t the only individuals being negatively impacted by low financial literacy rates. According to a 2004 CNN report “Survey: Seniors Flunking Finance,” U.S. high school seniors were only able to answer half of the questions on personal finance and economics correctly.
What resources are available locally to aid me in learning more about financial literacy?
Locally, Key Bank has a Financial Education Center located in Cleveland. Since its inception in 2004, this Center has been providing free financial resources to those living in and around the Greater Cleveland area.
Also, Cleveland Housing Partners offers a series of training sessions to aid in establishing financial independence. These classes, sponsored by Key Bank, feature topics pertinent to financial literacy including seminars about: credit, money management, banking, savings and investing.
The promotion of financial literacy isn’t just a local initiative.
Since 2003, April has been designated by Congress as “Financial Literacy Month.” In April of 2005, the House of Representatives passed a bill promoting goals of Financial Literacy Month.
Understanding the terminology
Financial literacy is complex and many individuals have difficulties understanding terms associated with the finance industry. According to Key Bank’s financial literacy initiatives, it is important that individuals familiarize themselves with the following terms:
Bankruptcy – A court procedure that may release a person from repaying their debts. A bankruptcy stays on a person’s credit report for ten years
Charge-off – The balance a lender no longer expects to be paid and writes off as bad debt. It stays on the credit report.
Credit Risk – A determination that predicts how likely a person will payback his or her use of credit. Those who pay on time and as agreed are considered less risky than those who don’t.
Default – The failure to make payments when they due.
Inquiry – An item that shows a request for a copy of the credit report to review.
Revolving Debt – An account the lets the borrower request monies without re-applying each time. Credit cards are an example of revolving debt.
Interested in learning more?
Unable to find answers to other questions revolving around financial literacy? Telephone our office at 216.776.6180 or send an email to email@example.com for additional information and resources.