April is Financial Literacy Month—a national collaborative effort to improve financial literacy, especially among our nation’s youth, and to promote financial wellbeing for all consumers.
The concept behind this campaign was originally spearheaded by the National Endowment for Financial Education with its Youth Financial Literacy Day. The group eventually handed over Youth Financial Literacy Day to the Jump$tart Coalition—a nonprofit promoting financial literacy curriculum in America’s schools.
More than 20 years ago, Jump$tart expanded the one-day effort to an entire month called Financial Literacy for Youth Month, which eventually became Financial Literacy Month—and is sometimes known as National Financial Capability Month. But whatever you call it, the mission has always been the same: to promote, advocate for, and support financial literacy efforts across the country and especially in schools.
In 2004, the Senate passed a resolution officially recognizing April as Financial Literacy Month. Nonprofits, financial institutions, associations, and educational organizations nationwide celebrate throughout the month with an increased emphasis on financial literacy through events, programs and counseling services.
We are Committed to Financial Wellness and the Components of Financial Literacy
At Sunrise Banks, we believe financial literacy is a major part of financial wellness—one of the foundational pillars of our mission to be a social engine for good.
Financial literacy is a broad topic, but it can be divided into the following primary components:
Budgeting: Creating, maintaining, and sticking to a budget is one of the most important parts of understanding and keeping up with your finances. Calculating your net monthly income falls under this component, as well as closely tracking your expenses and purchases. You can’t truly hold yourself accountable for your spending and earning without an actual budget to refer to regularly.
Savings: Whether it’s for an emergency fund or for purchasing a big-ticket item, you can’t experience financial wellness without savings as a priority. Part of financial literacy is having the discipline to set aside money regularly, especially for emergencies—and doing so will help keep you out of debt.
Debt management: Speaking of debt, too much of it can stand in the way of achieving your goals. Creating a plan of attack for conquering debt includes learning the difference between good debt and bad debt, prioritizing which debt to pay off first, and exploring the option of debt consolidation. Your financial goals will seem a lot more attainable without crippling debt in your path.
Credit score: Learn what your credit score is, what’s a good credit score, and how to improve it. That last one—improving your credit score—will help you save money in the long run. You can find out more about this powerful financial move through Sunrise Banks’ Credit Builder Program.
Credit cards: Along the lines of your credit score is learning how to use credit cards responsibly. It’s possible that credit cards can help boost your credit score, but only if you avoid the consequences of irresponsible use—such as high interest rates and hefty fees.
Interest: You can earn it and you can pay it—but either way your bank account will thank you if you truly understand interest. Interest can impact your financial health more than you probably realize so it’s important to avoid high-interest debt—such as payday loans—and make wise investments.
Protecting your finances: You’ve got a budget in place, consolidated your debt, and made wise investments. But none of this will do you any good if you haven’t protected your finances in the first place. Protect your money by regularly checking statements for mistakes, knowing how to avoid phishing attacks and identifying costly scams, and keeping your passwords and documents secure.
A Final Word on Financial Literacy
These financial literacy components are the steppingstones along the path to financial wellness. Sunrise Banks[1] is here to help you in this journey with offerings like our BankOn-approved Rise Checking Account, which has no overdraft fees, and resources from our Personal Finance Knowledge Center.
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[1] Sunrise Banks, N.A., Member FDIC