Are You Financially Literate

According to the Federal Reserve, 43% of Americans live above their means. Many Americans live paycheck to paycheck and are living in either low-income or middle income households – some just one paycheck away from being homeless. If they lose their jobs, they have no backup plan, no savings and no safety net to help them through a financial crisis. Some school systems do not teach financial literacy because they don't feel it is a priority.

Unfortunately, students who are not financially literate grow up to be adults who are not financially literate. These same adults develop bad spending habits, have bad credit and file for bankruptcy or foreclosure. If financial literacy was taught in all the school systems in the country, many Americans would be in a better financial position because they would be empowered with knowledge to help them make good financial decisions and they would have the tools to recover from a financial crisis.

Here are some questions that will help you determine if you are financially literate. If you answer "no" to 5 or more questions, you may need to gain some knowledge about financial literacy and change your thoughts about money.

1. Do you have a bank account?
2. Do you frequently overdraw your bank account?
3. Do you have an emergency fund? Do you have at least 9-12 months of savings in an emergency fund?
4. Do you cash your checks at a check cashing store or liquor store?
5. Do you pay bills late?
6. Do you have a retirement account or do you invest?
7. Do you know what your current credit score is?
8. Do you write all ATM/debit card transactions in your check book?
9. Do you regularly compare your bank statement with your receipts?
10. Do you have a budget?
11. Do you know how much debt you owe?
12. Do you know your net worth?
13. Do you owe taxes or have you owed taxes in the past?

If you are not financially literate and don't the basic about personal finance I encourage you to read self-help books on personal finance that discuss budgeting, investing, retirement, saving, paying for college and taxes. There are also several websites available such as CNN Money, Yahoo Finance, Bankrate.com, MSN Money and morningstar.com. The more you know the more you grow. Money can generate wealth or generate debt, you make the choice.