APRIL IS Financial Literacy Month. I can’t decide if
the timing is brilliant or poor, given that it also happens to be the month when many Americans are
already consumed with polishing off their tax returns.
And to be honest, as much as I laud the message
behind any effort to raise financial know-how, I don’t
subscribe to the notion that financial literacy needs a
special month of attention. Financial literacy needs
to be a part of your everyday life. Being financially
literate means you have committed to consistently
making the right choices day in and day out, for a
single purpose: You want to be in control of your life.
And I want to be very clear: Financial literacy
has nothing to do with intellect or whether you are
financially well off. I know plenty of people who are
smart and/or wealthy, and I guarantee that they can
(and do!) make plenty of money blunders.
Here’s a short list of what I think qualifies someone as being financially literate. They are people
Embrace the importance of delayed grati;ca-tion. Let’s face it: ;at’s what saving for a future goal
is all about. Instead of spending a dollar today, you
invest or save that dollar for a tomorrow goal, whether
it is a down payment for a home, your retirement or
a great anniversary vacation that you can pay for
without running up credit card debt.
Live within their needs, but below their means.
I want every child of yours who wants a college education to get a college education. But that does not
mean you should shoulder the burden of expensive
college tuition that requires taking on lots of debt or
scaling back your retirement savings. An a;ordable
education should always be the goal.
I want each of you who needs a car to have a car.
But that does not mean you should aim for the nic-
est car that you can finance only with a long-term
loan. All you need is a car that gets you where you
need to go, and it should never be financed with a
loan that is longer than three years. That’s a sign
you’re spending well above your needs.
And I want everyone who wants to own a home
to have a home. But again, a home that you can easily
afford, not one that you stretch into. What is afford-
able? One that lets you still have money left at the
end of the month to save and invest for your future.
Can say no out of love, rather than yes out of
fear. ;ere will likely always be people you love who
want or need or could just use your ;nancial help.
But you are never to give of yourself ;nancially if it
erodes your ;nancial security. Don’t be fearful that
someone may think less of you for saying no to co-
signing a loan or raiding your emergency fund to
bail them out of a pinch. ;ere is no valor in helping
someone if it hurts your security.
Know the best ;nancial adviser is staring at
them in the mirror. I have no problem if you work
with a ;nancial planner or adviser. But I will never
condone not being an active participant, questioner
and decider in your major money decisions.
;is extends to those of you who are married or
in a long-term relationship. One of you can “drive,”
but the other must be in the car and helping with the
navigation. Why? Because those decisions a;ect both
of you. ;e decisions a ;nancial adviser makes on
your behalf aren’t going to change her life, but they
can change yours. With so much at stake, how can
you a;ord to be hands-o;?
Please, make this the year you ;nally become an
active participant in understanding all of the mov-
ing parts of your ;nancial security: investments,
insurance, debts, etc.
Know that money does not de;ne them. I’ll be
the first to insist that money is important. It is
incredibly necessary—for food, for shelter, for clothing. But please listen to me: Your net worth does not
determine your self-worth. Embrace that truth and
you will have achieved true ;nancial brilliance. C
Be ;nancially literate
It’s a lifelong commitment
Suze Orman is an Emmy
Award–winning TV host,
New York Times best-selling
author and motivational
speaker. She can be contacted
Orman will answer selected
questions in this column.
She regrets that unpublished
questions cannot be
Please include “Suze Orman
Q&A” in the subject line.
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