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Financial Literacy Month - an opportunity to have financial conversations with your family

April 15, 2024

Financial Literacy Month provides a welcome opportunity to begin important conversations on personal finances, savings and managing debt with children and loved ones. Given the trend of spending more than earning, credit card debt is at an all-time high surpassing $1.13 trillion, based on the Federal Reserve Bank of New York as of December 2023.  

Considerations for key areas to discuss:

  • Creating healthy spending habits:  Review monthly paystubs, looking at the difference between gross income and net income after all deductions (including taxes, retirement contributions, and health insurance).  The net income is the amount to consider for all other living expenses. 

    Find a way that works personally to track and understand overall expenses including household costs (mortgage, insurance, real estate tax, utilities), vehicle, healthcare, lifestyle needs and charitable giving. Distinguish between those expenses that are necessary needs and those that are discretionary wants. 

  • Understanding credit card and personal debt:  Credit cards typically carry higher interest rates compared to all other types of loans such as mortgage, car or student loans. Average interest rates on credit cards have almost doubled in the past decade from an average of 12.9% in 2013 to 22.8% in 2023, while many are seeing rates as high as 30-35%. This makes paying down debt harder to accomplish for those that carry an ongoing balance. It is important to check the personal rate on each card.

    Making minimum payments on a credit card will prolong the time it takes to pay off the balance, increasing the overall cost of accumulated interest.

    Pull the annual credit card summary to see the category breakdown of expenses paid on each card. It might be surprising to see how quickly categories such as eating out or online purchases can build up.  
  • Outstanding Debt Paydown:  Create a balance sheet summary reflecting all assets and outstanding liabilities. The liabilities can be listed out to include balance, interest rate, payment amount and time frame. Reviewing each outstanding debt and paying those at the highest interest rate first can help reduce overall long-term cost.   
  • Financial Goals and Planning: Establishing short-term and long-term goals creates an important roadmap for obtaining financial success. 

    Short-term goals can include setting aside funds to create an emergency fund (3-6 month of cash needs), paying down outstanding debt, planning for a vacation, preparing for home improvements or a car purchase. 

    Long-term goals can include saving for homeownership, planning for children’s education costs and retirement planning.

    Define goals clearly including amount needed and timeframe for achieving. Prioritize goals to determine those most important and plan accordingly. Monitor progress and make adjustments as needed.

Starting these conversations can help your family become more informed and empowered to make healthier financial decisions, ultimately leading to improved financial well-being. Our Steps to Financial Independence guide and Monthly Spending Tracker are the perfect resources to share with your loved ones. Both publications are available on our website at:

Steps to Financial Independence
Monthly Spending Tracker

Or feel free to reach out to us to obtain your copies. We are available to connect with your family members and welcome their outreach as they plan for their future. 

Source:  Federal Reserve Average APR rates