The start of something new

Financial literacy is a bit of a buzzword right now. Lots of people talk about it, and everyone agrees it’s important.  What’s less clear is how to make it happen for those that need it, which, by the way, is everyone.

But what exactly is it?  The President’s Advisory Council on Financial Literacy defines personal financial literacy as “the ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial well-being.” (2008 Annual Report to the President; Still not sure?  Basically, it means understanding how financial decisions can affect you, both in the short term and long term.

Some things that make up being financially literate include using a budget, saving and/or investing, and managing your debt well. Having financial literacy means that you are more likely to have a good credit rating, have some savings and retirement money and less likely to be taken advantage of by financial fraud and predatory lenders. Being financially illiterate can also mean being at risk to have a very high debt load or a poor credit rating.

Most people learn from their parents what to do, (or what not do to!), or maybe they learn from the School of Hard Knocks. We make mistakes, and hopefully we learn from them. Maybe as life progressed, we had a financial advisor that helped. Unfortunately, a lot of people repeat the same mistakes over and over again.  It’s a lot like fitness.  Most people know what they SHOULD do, but have a hard time making themselves do it.  Just like fitness, it’s a long term reward for a short term sacrifice. You need to stay focused on the long term goal to change behavior in the present.

A big part of being financially literate is being able to figure out what’s the real choice being made when you spend your money. We don’t often realize in the moment how our decisions today can affect things that happen many years down the road. For example, someone who has a goal of buying a home is having trouble paying down their debt and so they have some negative credit issues.  But in their day to day spending, they are doing a lot of dining out and take out, which can cost a lot.  In their mind, the choice is whether or not dine out or to cook at home.  At the end of a long day, it can be very easy to pick up food or go to a restaurant.  But what’s the real choice they are making?  When they use their money to do take out, and don’t work toward paying their debt, the real choice is dining out or buying a house. From that perspective, it makes it easier to go home and make supper.

Just as with reading literacy, once you learn financial literacy, you can open doors you didn’t even know were there.

LSS Center for Financial Resources offers multiple ways to increase your financial literacy, through both education classes and individual counseling sessions.  Our Financial Fitness programs offer several topics for learning, such as credit, budgeting and spending plans, and home buyer education just to name a few.  We can do budget counseling to help you work out a budget that meets both needs and wants, now and for the future.  If you are trying to deal with overwhelming debt, we can work with you to discover options so that you can make the best choices for your financial health.

Contact us at 1-888-258-2227 or at to make an appointment.

Written by Sylvia Selgestad, Financial Counselor and Educator

Photo credit:

LSS Center for Financial Resources
Consumer Credit Counseling Service | Housing Resources | Sharpen Your Financial Focus | Financial Fitness Education
705 East 41st Street, Suite 100 | Sioux Falls SD 57105-6047
605-330-2700 or 888-258-2227
Strengthening Individuals, Families & Communities

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