What the heck is financial literacy and why does it matter? Wikipedia defines financial literacy as “the ability to understand how money works in the world: how someone manages to earn or make it, how that person manages it, how he/she invests it and how that person donates it to help others. More specifically, it refers to the set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources.”
So to simplify it, its having the know how and ability to manage money! Why do you need it? Well according to an article in Time Magazine, even though women are often the family breadwinners, we still pass the buck when it comes to financial planning. It constantly surprises me to go out with friends for a girl’s night out and hear someone say, “Let me call my husband and ask if I can buy that.” I have friends that will say that when we’re out having dinner, shopping at the mall, or while discussing something as simple as taking the kids to the zoo.
I understand the need to communicate with your spouse about finances, that’s not what surprises me. What’s shocking is that they don’t know what’s in the bank, what bills have been paid, or how money is budgeted! So…I always ask, what would happen if your spouse leaves for work tomorrow and never comes home? Do you know where he keeps the bills, how much the house payment is, if you have life insurance policies? Most of them answer “No!”
Why? Apparently, research shows that more women feel insecure about making investment and financial planning decisions. I can totally relate to what a woman in the article says, when she refers to money as shutting down her brain. I’m the same way, I can find amazing deals and stretch money like a rubber band, but I don’t like to look at the big financial picture and plan for the future! I let my hubby handle most of the decisions involving investments and retirement.
Unfortunately, I know that with two children, I need to make sure that my husband and I are both financially responsible in our decisions and that we’re teaching our children to be financially literate. I’m glad that Genworth Financial has resources that make it easier for us to discuss our options and learn more about investing in our future.