Personal Finance: It's never too late to improve financial literacy

Christopher Hopkins
Christopher Hopkins

Many adults feel a sense of insecurity regarding important decisions that will determine whether retirement is a joy or a burden. April is Financial Literacy Month, a time to highlight deficiencies in understanding basic budgeting, saving and investing concepts that are critical to a sound and stable financial future.

In a 2011 research paper from the National Bureau of Economic Research, three simple questions were posed to approximately 1,500 adults. They required no computations, but tested conceptual familiarity with investment returns, inflation and risk. The results were less than encouraging: fewer than one third of respondents got all three simple questions right.

photo Christopher Hopkins

This matters more today than ever, with the transition away from traditional pensions toward defined contribution plans like 401(k)s that place all the responsibility directly on the worker to understand and direct his or her own investments. According to the study, the share of private retirement contributions going to self-directed plans has ballooned from 40 percent in 1980 to 90 percent in 2011. Clearly, the need for individuals to plan for retirement has never been greater. And yet, only 43 percent of those surveyed have ever made any attempt to estimate how much they must save.

Slowly, elements of financial literacy are being introduced into school curricula, which is great for the next generation. But for those adults who need a refresher today or don't know where to start, we offer a few resources.

The American Institute of CPAs has rolled out a great website in conjunction with their "Feed the Pig" savings campaign. The program known as 360 Degrees of Financial Literacy (available at offers basic education in a clear, well-organized format according to stage of life (students, parents, couples, workers, retirees etc.).

For a deeper dive, visit the Future of Finance site at the CFA Institute ( for articles and educational resources targeted at individual investors. Check out the Statement of Investor Rights and ask if your financial adviser is willing to abide by it.

The government offers a number of sites covering the basics of investing. Start with MyMoney.Gov for an overview of recommended materials for children, youth and adults. The U.S. Federal Reserve also has an excellent financial primer at Many of the regional Fed banks also host superb investor education sites.

Most large banks and brokers offer informative literacy resources. For example, Bank of America has partnered with KhanAcademy to present Better Money Habits, an introduction to a range of basic financial topics like debt, saving, home ownership and personal banking that many individuals have had to learn about the hard way (

There are a number of independent websites specializing in personal financial planning and education. is a helpful website dedicated to educating individuals on savings, investing and credit. They offer advice and guidance on selecting credit cards, managing debt responsibly, and protecting your credit score. Frequent articles on a variety of common questions are helpful., a subsidiary of Intuit (of QuickBooks and TurboTax fame) offers similar resources, leaning toward assistance with creating and following a budget.

Most media outlets and financial publishers offer educational materials. For example, check out CNN's Money Essentials ( for a solid basic introduction to a variety of financial topics.

Finally, look for workshops or seminars on basic financial education in your area offered by nonprofit groups (be aware that "free lunches" or "dinner seminars" are sales pitches not purely educational events). Many local governments and quasi-governmental agencies offer financial education and counseling.

Today, each of us must accept the responsibility for our own financial security. Gaining a better understanding of fundamental financial concepts is the starting point.

Christopher A. Hopkins, CFA, is a vice president and portfolio manager for Barnett & Co., in Chattanooga.

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