Financial Attitude and Financial Literacy
, by Rob Kaufman
How to Change Both for the Better
Through experience, most of us have learned that attitude plays a big part in the success (or failure) of reaching any goal. For instance, if we want to learn to play the piano but are never in the mood to practice, we probably won't be playing a concert at Carnegie Hall anytime soon. The same holds true when it comes to Financial Literacy - if you want to learn more about how to manage your finances and make better financial decisions, your financial attitude is a major factor.
Seriously? A financial "attitude"? Is there really such a thing? Yes there is, and you can actually change it to help you meet your financial goals.
What is a financial "attitude"?
How do you feel about investing in the stock market? Does it interest you? Bore you? Scare you? When you think about your personal financial situation, do you get nervous? Feel a sense of security? Or do you try as hard as you can to think about something else?
The way you think or feel about finances, which ultimately affects your behavior toward them, is your financial attitude. So what's your financial attitude? There's a short quiz at Thrivent.com that helps people identify their attitude toward managing money.
The quiz asks you to consider 11 financially-focused statements, some of which include:
I find monitoring my bank account/credit card accounts very boring
I prefer not to think about the state of my personal finances
Thinking about the state of my personal finances makes me feel guilty or anxious
I feel apprehensive when dealing with my personal finances
I know my credit score
Each statement has a point-scale associated with it. Once you tally up your score, you can see where you fall within the four attitude categories.
Quiz takers with a "less than enthusiastic" financial attitude fall into the Hesitant to Start category. Although they have taken a few steps toward gaining confidence in managing their money, they are encouraged to continue on their journey by doing things like establishing an emergency savings account and creating a budget. These can help reduce some of the stress in their lives and give them a clearer understanding of their spending habits. This kind of information can help make finances less intimidating.
Those who are a bit more enthusiastic about their finances fall into the Taking the First Steps category. These people are a bit more involved in their finances. They now need to strengthen their financial literacy by saving more money and looking at their finances to make sure they're getting the most out of their money.
The next category, Making Progress, includes those quiz takers who have a genuine interest in their finances. They know where their money is going, how to keep track of it and typically pay their bills on time. Advice for this group leans toward learning how to automate their money management to minimize late fees, pay down their debt, save more for retirement and add to their financial education.
Lastly are those who fall into the Solid Foundation category. These are people who take Financial Literacy very seriously but are also urged to keep learning to ensure they're moving toward their financial goals. They are advised to define short-, medium-, and long-term goals in order to make informed decisions, to save for retirement and always be prepared for the unexpected.
Financial Attitude Equals Financial Literacy.
In a recent myFICO blog regarding Financial Literacy Month, Financial Literacy was defined as: "the knowledge and skills that enable us to make informed and effective decisions with our money." In order to obtain this knowledge and these skills, we need to want to learn them. We also need not fear the unknown, which for some of us is our finances. With a nearly endless supply of websites that can help us manage our finances correctly, there's no longer any excuse not to pass your next Financial Literacy quiz with flying colors!
Find out more about Financial Literacy Month and join others who are trying to reach their financial goals through the myFICO Fitness Challenge.
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