Do you consider yourself educated about managing finances?
Recent studies show the majority of Americans are not educated enough in topics such as mortgages, retirement, and investments. A survey conducted by the Financial Industry Regulatory Authority (FINRA) Investor Education Foundation in 2012 found that when asked five general finance questions, only 39 percent of adults could answer at least four correctly.
Even more concerning, Ohio was nearly at the bottom among all states, with only 33 percent answering at least four correctly.
As co-chair of the House Financial and Economic Literacy Caucus, I want to be sure we can address the issue of financial literacy for people at all stages of life – from children to those at retirement age. Each year in April, we recognize Financial Literacy Month to remind all Americans that taking charge of their own financial well-being not only will improve their quality of life, but it strengthens our nation as a whole because the more families we have on solid financial footing, the stronger our economy.
Building a successful financial future starts with our kids. We need to start early to teach children good spending habits, such as saving money from doing household chores and keeping money in a savings account. As our kids go to college and begin careers, managing finances becomes even more important as they navigate student loans, new jobs, and in many cases, living away from home for the first time.
Adults also need to be aware of how their financial decisions can affect their futures. Whether you are buying a house, taking out a loan, or deciding what to invest in or when to retire, the decisions you make can have lasting effects. A resource important to most Americans to help navigate the complicated nature of financial and retirement planning are financial advisors.
Unfortunately, earlier this month, the Department of Labor released an overreaching rule that will limit the ability of millions of lower- and middle-income families to receive professional advice from financial planners, and reduce their options for retirement saving. Additionally, this unnecessary rule will impact individuals, families, as well as small businesses who provide 401(k)s and other retirement savings for their employees. In Congress, I remain committed to fighting this regulation to be sure everyone has the opportunity to access good financial advice in the future.
In the end, I believe the best consumer protection is increased financial literacy and Americans who are empowered with the information they need to take charge of their own financial portfolios. It’s a lifelong pursuit and so I encourage you to take some time this month to brush up on your own personal financial education. There are many great resources available to help you keep updated on finances.
The Financial Literacy and Education Commission and Money Management International have created financial education websites at MyMoney.gov and www.financialliteracymonth.com where anyone can go for tips, updates and education materials on financial literacy.
U.S. Rep. Steve Stivers (R- Upper Arlington) represents Ohio’s 15th District.