As we observe Financial Literacy Month this April, Step Forward reaffirms its ongoing efforts to equip individuals and families with the essential tools for economic self-sufficiency.
Financial literacy is not just about managing money; it’s about understanding financial concepts and planning for the future. By promoting financial literacy, Step Forward empowers its clients to make informed decisions that align with their goals and values so that they can ultimately achieve greater financial security and independence.
Step Forward’s approach to financial literacy is two-fold. First, the agency addresses the client’s immediate needs by providing emergency assistance, like utility assistance or rental assistance. These services help individuals navigate through financial crises and stabilize their current situations. The agency also offers financial literacy workshops, assistance with budgeting, and more, to provide the individual with the tools and knowledge they need to become economically self-sufficient.
“By arming individuals with this knowledge, we aim to break the cycle of poverty and create a path towards economic empowerment,” Kevin Wade, Step Forward’s Interim Director of Professional Development, said.
According to the 2020 National Financial Capability Study, only about one-third of adults in the United States could answer four or five basic financial literacy questions correctly. In Ohio, the situation is similar, with many residents lacking the necessary knowledge and skills to make sound financial decisions. In 2021, the Ohio Financial Educators Council performed a survey and asked participants statewide how much money they thought they had lost because they lacked knowledge about personal finance. The respondents claimed they thought they had lost $10,000 or more within the past year because of financial illiteracy. The same group found that the average Ohio consumer debt amounted to more than $61,000. Cleveland’s median credit score was the lowest of the five major cities statewide and well below the nationwide average, at 653.
As we enter 2024, the United States continues to struggle with lasting economic challenges brought about by the COVID-19 pandemic, increased prices on essential goods and services, and the highest inflation in 40 years.
“Many individuals and families face the daunting challenge of maintaining their finances and avoiding the cycle of living paycheck to paycheck,” Wade explained. “For far too many, the reality is that they are just one paycheck away from poverty. This precarious financial situation underscores the urgent need for improved financial literacy and access to resources that can help families build savings, manage debt, and achieve greater financial stability.”
Step Forward continues to offer its Professional Development program, which is designed to empower individuals with the skills they need to succeed in their careers. Through workshops, seminars, and one-on-one coaching sessions, participants learn about resume writing, interviewing techniques, and career advancement strategies. This program not only helps individuals enhance their professional skills but also plays a crucial role in improving financial literacy. By advancing their careers, individuals can increase their earning potential and achieve greater financial stability. In turn, this enables them to make more informed financial decisions, manage their money effectively, and work toward their financial goals.
“By investing in their career, they’re investing in their financial future,” Wade said.
Understanding the impact of financial literacy on both personal relationships and intergenerational financial wellbeing is crucial. Personal finance is often cited as the number one topic of argument within a marriage, highlighting the need for effective communication and shared financial goals. Parents, recognizing the importance of teaching financial responsibility to their children, prioritize this aspect of education.
To improve financial literacy, individuals can consider the following:
1. Educate: Take advantage of resources such as books, online courses, and workshops to learn about personal finance topics like budgeting, investing, and debt management
2. Set financial goals: Define your short-term and long-term financial goals to provide direction and motivation for your financial decisions.
3. Budget wisely: Create a budget to track your income and expenses, and identify areas where you can save money or reduce spending.
4. Save and invest: Build an emergency fund to cover unexpected expenses and explore investment opportunities to grow wealth over time.
5. Manage debt: Develop a plan to pay off high-interest debt and avoid taking on new debt whenever possible.
6. Stay informed: Stay up to date on financial news and trends to make informed decisions about your money.
Professional Development Services would love to assist in helping you create the career or educational pathway of your dreams! For more information, click here.