The American Institute of Certified Public Accountants ("AICPA" ) defines Financial Literacy as the ability to effectively evaluate and manage finances in order to make prudent decisions towards reaching life goals as to understanding of: (1) Money (2)Cash Flow (3) Basic Economics/Financial Concepts and Debt/Risk Management.
According to eye opening statistics posted at Financial Literacy Resources | Resources | AICPA & CIMA
- 2/3 of US households will fail to reach life's goals
- Financial Illiteracy is passed to the next generation
- The average high school senior failed a 2004 financial knowledge survey.
This information highlights the need for parents to spend more time seeing that their children are educated in at least the basic concepts
Both adults and children must learn to recognize when they may be concentrating on short-term wishes at the expense of long-term needs.
Adults who feel that they are deficient in the financial literacy department have a wealth of resources available to them. Some examples are posted below.
Who doesn't know or hasn't read about someone who won the lottery, won a judgment, received a personal injury, workers compensation or wrongful death settlement, inheritance or divorce settlement and who has made some bad life impacting financial decisions? Believe it or not bad decision making is often rooted by an inadequate grasp of basic algebra.
I will be exploring other resources and specific applications to the personal injury, wrongful death and other types of settlements in upcoming posts.
A Sampling of Financial Literacy Resources:
World Institute of Disability, World Institute For Disability
Structured Settlements for Minors | Here's What You Need to Know (4structures.com)
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