The Institute for Financial Literacy says that financial literacy is the knowledge and ability to manage one’s personal finance with competence. It is a lifelong process requiring both academic and practical components. Financial literacy includes five standards of managing finances including creating a budget, understanding credit, controlling debt, protecting assets and implementing investment and retirement strategies.
The National Financial Capability Study reports that low education groups, low income groups, and young adults are among the highest risk of being financially illiterate. Forty percent of Americans say they live beyond their means. The average household with debt carries approximately $10,000 to $12,000 in total revolving debt and has 9 credit cards. (For more information, click here.)