Skip to main content
  (217) 698-4844   rga@bergerfinancialgroup.com

  • Home
  • Berger Financial Group
  • About 
    • Our Philosophy
    • Our Process
    • Our Team
  • Our Services 
    • Fee-Only Financial Planning
    • Wealth Management
    • Retirement Planning
    • Investment Management
    • Business Consulting
    • Financial Education
  • Blog
  • Resources 
    • Useful Websites
    • Calculator Library
    • Video Library
  • Contact

    You are here

  1. Home
  2. Blogs
  3. Why Financial Literacy is Important

Why Financial Literacy is Important

Submitted by Robert Gordon & Associates, Inc on October 7th, 2019

Being financially literate in today’s economic climate is more important than ever. Understanding finances can help you make better money management decisions, budget your money properly, adequately save for college, and be financially prepared for retirement. While it may sound daunting, financial literacy starts with a budget. Today, only one third of Americans have a budget that they actively use when making financial decisions, although 75% of Americans believe you should have a budget.

With more of the burden placed on consumers to make educated decisions about things they may have little knowledge of, it’s important to educate yourself properly, no matter what your age. Here are a few reasons why financial literacy is so important today:

  • Longer Life Span – In 1960, the average lifespan was 69.7 years. Today, it’s 78.7 years; an increase of nearly ten years. And while no one is complaining about living longer, the fact is that because we’re living longer, we’ll need to save more money for retirement. However, a new statistic shows that 22% of Americans have less than $5,000 saved for retirement. By educating young Americans about finances, it’s likely that more will start planning (and saving) for retirement sooner.
  • Reduced Pensions – The rule of thumb years ago was that you spent your professional life with one company, and retired with a healthy pension. Employees had little, if anything to do with managing that pension, and were not required to understand investments, where they should invest, and how much of their money they should invest. Today, aside from the public sector, the majority of businesses have done away with pensions, instead offering employees the chance to participate in a 401(k) plan, where they’ll need to make decisions on how much of their money they wish to contribute, as well as where their investments should go.
  • Social Security Benefits Not Enough to Live On – The average Social Security benefit paid per month is $1,461; not nearly enough to live on comfortably. It’s vital that retirees have another source of income, whether from other retirement accounts, a 401(k) or IRA, or a savings account.
  • Aggressive Credit Card Companies – Today, people can receive dozens of solicitations for credit cards on a weekly basis. It’s easy to succumb to the temptation, and equally easy to find yourself thousands of dollars in debt. By understanding the role that credit cards should play in your financial health, you are much less likely to overspend, and use the cards properly.
  • The Death of Cash – Only 18% of Americans state that they use cash to make most of their purchases. While debit cards and electronic payment apps have certainly simplified the buying process, they have also left us with a curious detachment to our money, making it much easier to overspend without seeing the immediate consequences as we did with cash, when we could simply look in our wallet and see our cash dwindling. But by being proactive about our financial health, we can learn to pay closer attention to the consequences of our spending, no matter how a purchase is paid for.

While implementation of a financial literacy curriculum in schools is a positive trend towards financial literacy, we all need to take a long look at our financial health and see if we need a refresher course in financial literacy.

Taking the bull by the horns and educating yourself on the basic of personal finance is a necessary first step. Working with a certified financial professional should be the next step in creating a realistic financial plan. Contact us today to discuss how we can help you achieve your financial goals!

 

Tags:
  • CFP®
  • Finance

Book a Meeting

Tell a Friend

Looking to learn more?

Get in touch today

Contact Us

Additional info

  • Sitemap
  • Legal, privacy, copyright and trademark information

Contact info

  •   1201 South Veterans Parkway Suite A, Springfield, Illinois 62704
  •   (217) 698-4844
  •  

Attention:

Robert Gordon & Associates, Inc. and Berger Financial Group will never ask you for personal information via unsecured e-mail. Please be cautious of any correspondence that appears to come from Robert Gordon & Associates, Inc., Berger Financial Group or Charles Schwab that asks you to click on a web link or send personal information. Call and inform us of any questionable correspondence. If you are unsure, please call us. We welcome any reason to talk to our clients. Thank you.

RGA Privacy Policy       Current SEC Disclosure Brochure     Form CRS    Schwab Privacy

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

© 2025 Robert Gordon & Associates, Inc. powered by Berger Financial Group. All rights reserved.

Website Design For Financial Services Professionals