Financial literacy is a life skill. But, like all skills, it takes time to learn and, at the start, it can seem daunting if not impossible.
If the idea of getting started is intimidating, you're not alone. According to a survey by the Global Finance Literacy Excellence Center, 63% of Americans are financially illiterate. Mellody Hobson, co-CEO of Ariel Investments, believes that Americans are "behind the eight ball" when it comes to financial literacy. Yet only 19 states require high school students to take a personal finance class, according to the Council for Economic Education.
While no one's likely to be taught anything in a classroom about personal finance, there are steps you can take on your own to improve your financial literacy.
For Sandra Campos, CEO of Diane von Furstenberg, financial literacy is a skill that one never stops acquiring. "I suggest to my kids — and a lot of other people, as well — to keep up with the different publications." Reading trusted publications and staying informed will help you better understand how to manage your finances, Campos says.
Once you familiarize yourself with the jargon, research the terms you did not understand to gain a better grasp of what they mean. Next, it's time to make a budget. Blogs may tell you that budgeting is a useless exercise, but there is no better way to understand your expenses and income than by budgeting, according to Campos.
Your financial health, after all, is a lot like your physical health. Just as you need regular exercise and check-ups, you'll need to exercise your financial muscles. Campos suggests using online resources to further your knowledge. Sites such as Coursera, General Assembly and SkillShare offer classes that can help you master your finances.
Financial literacy is one of the best investments you can make in yourself. Becoming financially literate will prepare you for unexpected emergencies and help you make the correct decisions.
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.