Consumer Alert: What is “Financial Literacy?” »
HONOLULU (KHON2) — April is National Financial Literacy Month. There is an education campaign designed to remind young people and adults to focus on their financial future and well-being.
The Better Business Bureau said the campaign could not have come at a better time as inflation rises and grocery prices rise.
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Just under 3.4 million high school students are expected to graduate in the spring of 2022, and the BBB said April is the perfect time to teach them about financial literacy — a term that can be hard to explain.
“It’s defined as the ability to meet all of your financial needs today and over time,” said BBB Hawaii market manager Roseann Freitas. “An ability to absorb financial shock and the financial freedom to make choices and enjoy life.”
A financial shock can take different forms, Freitas said, such as an expensive medical or veterinary bill. The ability to absorb these shocks partly depends on how you budget.
Parents often use the allowance to teach their children about budgeting; giving them a timeline on when the money will come in. But the BBB said budgeting includes teaching children how spending means money will come out.
“And of course you want more money coming in than going out,” Freitas said.
The BBB said understanding debt is key to financial literacy since credit cards are in the mix. Buying an expensive item with credit and making the minimum payment is fine, but be aware that the rest will incur interest and end up costing more in the long run.
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As a general financial tip, guard your information with the utmost care, as the digital world makes document shredding all but obsolete.