In previous posts, I have highlighted the importance of teaching financial literacy in high schools. I have discussed student financial literacy and the difficulties associated with teaching. In this post, I want to turn the attention to teachers themselves. Teachers are pivotal to the success of financial education. What do teachers think of financial literacy and how prepared are they to teach financial literacy courses?
A study by Wendy Way and Karen Holden titled “Teachers’ Background and Capacity to Teach Personal Finance: Results of a National Study” published in the Journal of Financial Counseling and Planning in 2009 sheds light on this important issue. More than 1,200 K–12 teachers, prospective teachers, and teacher education faculty representing four census regions responded to questions about their personal and educational backgrounds in financial education. There are several important findings from this study that I would like to highlight:
First, almost all teachers recognize the importance of and need for financial education. As many as 89 percent of teachers agree that students—in order to graduate from high school—should either be required to take a financial education course or pass a financial literacy test.
Second, teachers do not feel prepared to teach personal finance. Fewer than 20 percent of teachers and prospective teachers reported feeling very competent to teach any of the six personal finance concepts normally included in educational standards, such as those identified by the Jump$tart Coalition and in the NEFE High School Financial Planning Program®. Teachers and prospective teachers felt least competent in the more technical
topics, such as risk management and insurance, saving and investing, and financial responsibility and decision making.
Third, state education mandates appear to have no effect on whether a teacher has taken a course in personal finance, has taught a course, or feels competent to teach a course. Several of the states in the study had mandated financial literacy in high school, so while we might expect teachers in those states to be different, that doesn’t appear to be the case. Currently 80 percent of states have adopted personal financial education standards or guidelines, yet the majority of teachers (about 65 percent) in those states admit not feeling qualified to teach to their state’s financial education standards.
These are worrisome findings; while teachers recognize the importance of financial education, they admit limitations in their preparedness and ability to teach personal finance topics. If you feel discouraged, let me turn now to some encouraging findings reported in this study.
A majority of teachers are open to further education in financial literacy. Interestingly, those who report an interest in additional training are those who have had a college course in personal finance or who have backgrounds in vocational education or social studies. While the majority of teachers engage in a number of financial behaviors that typically help ensure financial security, they express the same financial concerns of the general population. In other words, not only do teachers seem interested in engaging in training to teach financial literacy but that same training may offer personal benefits to the teachers themselves.
This is an important study and has several implications for the discussion surrounding financial education in high school. Clearly, it is not enough to simply mandate financial education. Mandates alone do not make people any smarter. Instead, resources should be devoted to training teachers so that they can implement the standards that are required in financial education. Teachers would welcome this education, may themselves benefit from it, and believe in the importance of financial education. Thus, there are good reasons to expect training to be effective.
And parents, community leaders, and all of you “ambassadors” of financial literacy (identified in my previous blog), please be active, too. If our schools are to adequately prepare students, then consistent, comprehensive, and sound instruction in financial literacy needs to be an important component in every school’s curriculum. But, to adequately prepare our students, we first must prepare our teachers.
A link to the paper mentioned in this article is provided below:
http://6aa7f5c4a9901a3e1a1682793cd11f5a6b732d29.gripelements.com/pdf/vol20_2way_holden.pdf
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Strangers in the classroom
I regularly receive e-mails from people who recognize the terrible need for improving financial literacy among young people. Most of the people who write say they want to volunteer their time and teach financial literacy in high school. I am very impressed by how strongly people feel about financial literacy and I have been thinking of ways of harnessing that willingness to help and the generosity of volunteers. Financial literacy is much in need of promoters and organizers. It is a very important issue and we need to work for it.
While I want to encourage everyone to get involved with the schools, I am reluctant to recommend that individual volunteers teach financial literacy in schools, for three main reasons.
1. Contrary to popular belief, it is very hard to teach. I have been at Dartmouth for eighteen years now and I can tell you that every year I have to do a lot of preparation to be able to stand in front of my students and engage them. The first day of class normally ends with a room full of students with baseball caps expertly placed so that I can’t tell whether they are listening or are sound asleep, and a few anxious faces who have been checking their watches for the last 61 minutes of the 65-minute class, and who exit the classroom faster than Speedy Gonzales. And these are the economics students who have elected to be in these classes! It takes a while to filter through the stone faces beyond the first row, and even after years of grueling practice, I barely manage to get through the first half of the term without witnessing a decimated class. It does help to have an Italian mamma instinct, to be armed with limitless patience and unbounded optimism, and to be able to resist the temptation to hang myself from the maple tree outside the window after explaining a concept five different ways and realizing that it is still unclear. If somebody thinks they can just show up in the classroom and teach, I can assure you, it hardly works this way. If you want to teach, you have to be prepared to be trained or the students will “train” you (meaning you will feel like a train has run over you by the end of the class).
2. Individuals seem to have many different ideas about how to approach the instruction of financial literacy. As I have mentioned in previous blogs, financial literacy is a topic grounded in economic and finance theory and it should be taught accordingly. But what I often hear suggested are topics like how to balance a checkbook or how to buy stocks. We need to stay away from these narrow “how to” lessons of financial literacy, as the objective here is to prepare people to understand and navigate a world of complex and changing financial markets. We can’t just tell students how to get from point A to point B; we need to teach them to use a compass. This is no small task and in my view we need a curriculum that teaches the fundamental principals that combine to make one financially literate. Such curriculum development is best done at the national level; inflation does not decrease the value of money differently in Vermont than it does in California or Texas. And while Vermont is much colder than the southern states, it does not freeze how prices work. Once we have developed such a curriculum, there might be a way to engage volunteers in the instruction of it.
3. It’s not always clear how well qualified individuals are to teach financial literacy. In several cases, I have found that college freshmen have set up web pages to teach financial literacy and are eager to go to high schools to offer some classes, even though they may have taken only one introductory course in economics. This is the curse of economics. I have found that many people feel very confident about their views of how the economy works even if they have never read an economics textbook. In other cases, I’ve gotten the impression that people are intent on delivering wisdom and strong values acquired over many years of experience. On the one hand, I am very attracted by the passion that this topic engenders, on the other hand, the dissemination of a sound and consistent knowledge base should be our first priority.
I do not want to discourage anyone who is interested in the pursuit of improving financial literacy in schools. Quite the opposite! Please be involved; do not let the school in your own district not pursue financial literacy, not teach these courses! But perhaps the best role is to be an “ambassador of financial literacy”; be an advocate for financial literacy without going directly to the blackboard. We normally do not let strangers into the classroom, in any course, not just financial literacy. In my view, teaching financial literacy requires a deep knowledge of economics, solid training, and a fair dose of humility. My students would also say that a thick Italian accent helps keeps you awake, but in this case, even that might not be enough!
While I want to encourage everyone to get involved with the schools, I am reluctant to recommend that individual volunteers teach financial literacy in schools, for three main reasons.
1. Contrary to popular belief, it is very hard to teach. I have been at Dartmouth for eighteen years now and I can tell you that every year I have to do a lot of preparation to be able to stand in front of my students and engage them. The first day of class normally ends with a room full of students with baseball caps expertly placed so that I can’t tell whether they are listening or are sound asleep, and a few anxious faces who have been checking their watches for the last 61 minutes of the 65-minute class, and who exit the classroom faster than Speedy Gonzales. And these are the economics students who have elected to be in these classes! It takes a while to filter through the stone faces beyond the first row, and even after years of grueling practice, I barely manage to get through the first half of the term without witnessing a decimated class. It does help to have an Italian mamma instinct, to be armed with limitless patience and unbounded optimism, and to be able to resist the temptation to hang myself from the maple tree outside the window after explaining a concept five different ways and realizing that it is still unclear. If somebody thinks they can just show up in the classroom and teach, I can assure you, it hardly works this way. If you want to teach, you have to be prepared to be trained or the students will “train” you (meaning you will feel like a train has run over you by the end of the class).
2. Individuals seem to have many different ideas about how to approach the instruction of financial literacy. As I have mentioned in previous blogs, financial literacy is a topic grounded in economic and finance theory and it should be taught accordingly. But what I often hear suggested are topics like how to balance a checkbook or how to buy stocks. We need to stay away from these narrow “how to” lessons of financial literacy, as the objective here is to prepare people to understand and navigate a world of complex and changing financial markets. We can’t just tell students how to get from point A to point B; we need to teach them to use a compass. This is no small task and in my view we need a curriculum that teaches the fundamental principals that combine to make one financially literate. Such curriculum development is best done at the national level; inflation does not decrease the value of money differently in Vermont than it does in California or Texas. And while Vermont is much colder than the southern states, it does not freeze how prices work. Once we have developed such a curriculum, there might be a way to engage volunteers in the instruction of it.
3. It’s not always clear how well qualified individuals are to teach financial literacy. In several cases, I have found that college freshmen have set up web pages to teach financial literacy and are eager to go to high schools to offer some classes, even though they may have taken only one introductory course in economics. This is the curse of economics. I have found that many people feel very confident about their views of how the economy works even if they have never read an economics textbook. In other cases, I’ve gotten the impression that people are intent on delivering wisdom and strong values acquired over many years of experience. On the one hand, I am very attracted by the passion that this topic engenders, on the other hand, the dissemination of a sound and consistent knowledge base should be our first priority.
I do not want to discourage anyone who is interested in the pursuit of improving financial literacy in schools. Quite the opposite! Please be involved; do not let the school in your own district not pursue financial literacy, not teach these courses! But perhaps the best role is to be an “ambassador of financial literacy”; be an advocate for financial literacy without going directly to the blackboard. We normally do not let strangers into the classroom, in any course, not just financial literacy. In my view, teaching financial literacy requires a deep knowledge of economics, solid training, and a fair dose of humility. My students would also say that a thick Italian accent helps keeps you awake, but in this case, even that might not be enough!
Three Reasons to Teach Financial Literacy in Schools
On December 15, 2009, U.S. Department of the Treasury Secretary Tim Geithner and U.S. Department of Education Secretary Arne Duncan met with students, educators, and community leaders to promote strengthened financial capability among the nation’s youth. They outlined programs to encourage financial education in schools across the country. The need for financial education cannot be overstated. There are at least three compelling reasons to require financial education in schools.
First, it is important to be financially literate before engaging in financial contracts and not after. Yet findings from the Jump$tart Coalition for Personal Financial Literacy, which surveys high school students, and from the National Longitudinal Survey of Youth, which surveys young adults, show that young Americans lack knowledge of basic concepts of economics and finance. This is worrisome as it means that young people are borrowing without understanding, for example, the power of interest compounding and are choosing their investments, including investment in their own education, without knowing rates of return. Young people face many financial decisions, from how to use credit cards to how to buy a car or start a business. Of course, one of the most important decisions that students face right out of school is how to finance their education—an important investment decision both personally and financially. Also, an early grounding in financial literacy sets the stage for engagement in financial education later in life.
The second reason it is important to teach financial education in schools is that financial knowledge is based on scientific concepts—for example, the law of interest compounding and the concepts of risk and risk diversification—and the groundwork for this sort of conceptual understanding is best laid in a formal educational setting. Financial concepts are not necessarily best learned through experience over time or on the advice of friends, family, and colleagues who are not, themselves, financial experts. Some of the most important financial decisions individuals make are not made repeatedly over time. We do not retire many times or buy many houses. Risk management or rates of return are rarely explained to us in easy-to-understand terms; more likely they are reported in long and complex statements printed in 6-point fonts! And financial experiences can be difficult to decipher without some basic knowledge: For example, what is one supposed to learn from the current economic crisis?
The third reason that financial literacy should be taught in schools is to give everyone the chance to learn it. The surveys from Jump$tart Coalition show that the small groups of students who are deemed to be financially literate are disproportionately white males from college educated families. Similarly, data from the most recent wave of the National Longitudinal Survey of Youth show that the young adults (23–28 years old) who are financially literate have college educated mothers and have parents who had stocks and retirement savings when these young adults were teenagers. While this is good news for this limited demographic group, everyone—even those without highly educated and financially sophisticated parents—is faced with financial decisions and we all need the skills to make sound decisions. Some have argued that financial literacy is relevant only if one has wealth. This is a very narrow view. Individuals must make decisions not only about assets but also about debt. And debt is present, even pervasive, across all income strata.
For those of us who believe so much in the value of financial education, seeing Secretary Geithner and Secretary Duncan together on December 15, 2009, was an historical moment. When I look back at 2009, that day—December 15—was one of the best days of a bleak year. For me, it marks the day where we started making progress on an important topic like financial education. I feel better and more optimistic for the new year!
First, it is important to be financially literate before engaging in financial contracts and not after. Yet findings from the Jump$tart Coalition for Personal Financial Literacy, which surveys high school students, and from the National Longitudinal Survey of Youth, which surveys young adults, show that young Americans lack knowledge of basic concepts of economics and finance. This is worrisome as it means that young people are borrowing without understanding, for example, the power of interest compounding and are choosing their investments, including investment in their own education, without knowing rates of return. Young people face many financial decisions, from how to use credit cards to how to buy a car or start a business. Of course, one of the most important decisions that students face right out of school is how to finance their education—an important investment decision both personally and financially. Also, an early grounding in financial literacy sets the stage for engagement in financial education later in life.
The second reason it is important to teach financial education in schools is that financial knowledge is based on scientific concepts—for example, the law of interest compounding and the concepts of risk and risk diversification—and the groundwork for this sort of conceptual understanding is best laid in a formal educational setting. Financial concepts are not necessarily best learned through experience over time or on the advice of friends, family, and colleagues who are not, themselves, financial experts. Some of the most important financial decisions individuals make are not made repeatedly over time. We do not retire many times or buy many houses. Risk management or rates of return are rarely explained to us in easy-to-understand terms; more likely they are reported in long and complex statements printed in 6-point fonts! And financial experiences can be difficult to decipher without some basic knowledge: For example, what is one supposed to learn from the current economic crisis?
The third reason that financial literacy should be taught in schools is to give everyone the chance to learn it. The surveys from Jump$tart Coalition show that the small groups of students who are deemed to be financially literate are disproportionately white males from college educated families. Similarly, data from the most recent wave of the National Longitudinal Survey of Youth show that the young adults (23–28 years old) who are financially literate have college educated mothers and have parents who had stocks and retirement savings when these young adults were teenagers. While this is good news for this limited demographic group, everyone—even those without highly educated and financially sophisticated parents—is faced with financial decisions and we all need the skills to make sound decisions. Some have argued that financial literacy is relevant only if one has wealth. This is a very narrow view. Individuals must make decisions not only about assets but also about debt. And debt is present, even pervasive, across all income strata.
For those of us who believe so much in the value of financial education, seeing Secretary Geithner and Secretary Duncan together on December 15, 2009, was an historical moment. When I look back at 2009, that day—December 15—was one of the best days of a bleak year. For me, it marks the day where we started making progress on an important topic like financial education. I feel better and more optimistic for the new year!
Wishes for the New Year
I am back in Hanover after a term where part of every week was spent working in Washington, D.C., and I am looking forward to the new year. The beginning of a new year raises hopes and expectations; we expect the upcoming year to be different from the previous one and for things to be better. Our wishes often do not materialize but I have, nevertheless, three wishes for 2010.
In December, the findings from the new Survey on Financial Capability were released. They paint a troubling picture of the U.S. population both in terms of financial knowledge and financial behavior. As has been documented in other surveys, knowledge of basic concepts of finance and economics is lacking in the population. The majority of people do not understand the workings of inflation, risk diversification, and basic asset pricing. Nevertheless, individuals have to decide how much to save to afford a comfortable retirement and how to allocate their pension wealth. Moreover, and disturbingly, half of the population does not have a buffer stock of savings to shield against unexpected events like job loss or emergencies. This makes both individuals and the economy as a whole more vulnerable to shocks. There are many other findings that I will discuss in more detail in future blogs. (The executive report is available at http://www.finrafoundation.org/resources/research/p120478).
My first wish for the New Year is that these findings will provide the stimulus for implementing policies to improve financial literacy and help American families in their financial decision-making.
My second wish for the year is that attention will turn to the groups that need financial literacy the most. One of these groups is women. The Survey on Financial Capability (as well as other surveys) documents that women are lagging behind men in terms of financial knowledge. This is not only the case for older women; it is also true for young women entering the labor market and for high school students. In all of these demographic groups, women are found to be less financially knowledgeable than men. Women are a large and important group. With one in two marriages ending in divorce or separation, women increasingly have to rely on both their earning capacity and their ability to manage resources well to take care of themselves and others. However, very few financial education programs are targeted to women and much more can and should be done to empower women with financial knowledge and financial capability.
My third wish is for financial literacy to be taught in schools. As I have mentioned in previous blogs, financial literacy is an essential piece of knowledge that every student should have. Just as reading and writing became skills that enabled people to succeed in modern economies, today it is impossible to succeed without being able to "read and write" financially—in other words, without financial literacy. Students face formidable financial challenges both during their school years (when they are bombarded with credit card offers) and in the years of young adulthood when they have to make important decisions, including how to finance a college education. My hope is that knowledge and understanding of financial concepts will impact their lives in one particularly important way: the understanding that one of the most important assets they can invest in is their own education.
On a personal level, I will try to stay away from New Year’s resolutions I know I cannot keep, such as shedding these extra pounds (I like eating!), traveling less (the weather and the new security measures are taking care of it), and writing a novel (I am too nerdy for it). But I will continue doing my research and writing my blog. This continues year after year and does not notice the passage of time. It does not even require a special resolution. Happy New Year to all of you!
In December, the findings from the new Survey on Financial Capability were released. They paint a troubling picture of the U.S. population both in terms of financial knowledge and financial behavior. As has been documented in other surveys, knowledge of basic concepts of finance and economics is lacking in the population. The majority of people do not understand the workings of inflation, risk diversification, and basic asset pricing. Nevertheless, individuals have to decide how much to save to afford a comfortable retirement and how to allocate their pension wealth. Moreover, and disturbingly, half of the population does not have a buffer stock of savings to shield against unexpected events like job loss or emergencies. This makes both individuals and the economy as a whole more vulnerable to shocks. There are many other findings that I will discuss in more detail in future blogs. (The executive report is available at http://www.finrafoundation.org/resources/research/p120478).
My first wish for the New Year is that these findings will provide the stimulus for implementing policies to improve financial literacy and help American families in their financial decision-making.
My second wish for the year is that attention will turn to the groups that need financial literacy the most. One of these groups is women. The Survey on Financial Capability (as well as other surveys) documents that women are lagging behind men in terms of financial knowledge. This is not only the case for older women; it is also true for young women entering the labor market and for high school students. In all of these demographic groups, women are found to be less financially knowledgeable than men. Women are a large and important group. With one in two marriages ending in divorce or separation, women increasingly have to rely on both their earning capacity and their ability to manage resources well to take care of themselves and others. However, very few financial education programs are targeted to women and much more can and should be done to empower women with financial knowledge and financial capability.
My third wish is for financial literacy to be taught in schools. As I have mentioned in previous blogs, financial literacy is an essential piece of knowledge that every student should have. Just as reading and writing became skills that enabled people to succeed in modern economies, today it is impossible to succeed without being able to "read and write" financially—in other words, without financial literacy. Students face formidable financial challenges both during their school years (when they are bombarded with credit card offers) and in the years of young adulthood when they have to make important decisions, including how to finance a college education. My hope is that knowledge and understanding of financial concepts will impact their lives in one particularly important way: the understanding that one of the most important assets they can invest in is their own education.
On a personal level, I will try to stay away from New Year’s resolutions I know I cannot keep, such as shedding these extra pounds (I like eating!), traveling less (the weather and the new security measures are taking care of it), and writing a novel (I am too nerdy for it). But I will continue doing my research and writing my blog. This continues year after year and does not notice the passage of time. It does not even require a special resolution. Happy New Year to all of you!
The Silent Course of Financial Mistakes
One of the problems with financial mistakes is that they can go unnoticed for a long time before a crisis erupts. For example, one could spend many years undersaving for retirement only to discover at age sixty or sixty-five that one has not accumulated enough to afford a comfortable retirement. But prior to such a discovery there are no signals, no warnings: no bells go off to warn about lack of savings, no statements caution “careful, this amount of savings seems low for your age.” In some of my work I have found that people start planning for retirement or make changes to their retirement savings accounts when they witness negative shocks to those around them (older siblings or parents) but, clearly, relying on such signals is insufficient.
This is the case not only for assets but also for debt. One could pay the minimum amount due on credit cards and have the debt pile up until it is too large to be paid off. Of course, borrowing at rates of 18% or higher makes the debt balloon, but the law of compound interest can cause debt to accumulate rapidly if one does not understand that interest accumulates on interest. The consequences of this can be devastating. People who have accumulated a significant amount of debt may have to postpone retirement or work a second job or sharply decrease their standard of living after retirement. They may even end up in bankruptcy. Throughout the current financial crisis, we’ve witnessed people losing their jobs and having little savings to fall back on, with many ultimately losing their homes. As a result of this crisis, saving has increased to an unprecedented level, but it is unfortunate that it took a negative shock to lead to appreciation for having a buffer stock of savings. Wouldn’t it be better if good saving habits were instead the result of routine assessment and maintenance of one’s financial “health”?
If we consider how we take care of our finances in light of how we take care of our physical health, we might come to some interesting conclusions. Everyone knows that regular health screenings are important. Underlying health conditions are not always obvious: nothing hurts, no obvious symptoms are experienced, everything seems fine until one finds a lump while taking a shower. In matters of health, we know that it is best to catch a health condition before it is at an advanced stage. Doctors have long recommended regular physical checkups, and we subject ourselves to routine tests and visits to the doctor even when we feel healthy and in good shape. We also take the usual health precautions, getting flu shots in the winter, washing our hands carefully, taking vitamin and mineral supplements (at least for those of us over…ahem, 40). Recommendations like these abound in doctors’ offices, in the media, and in everyday personal interactions. Everyone knows what precautions they should be taking on a daily, monthly, and yearly basis to maintain their physical health.
But how about financial health? What are we doing to make sure we are doing well in our financial planning? What precautions are we taking to make sure our finances stay healthy? Are we setting aside a buffer stock of savings that can shield us against negative shocks such as loss of income or an unexpected expense? Are we managing our debt wisely and making good investments?
Health maintenance is not exactly fun. I do not particularly enjoy having needles stuck in my arms, spending time reading old magazines in doctors’ waiting rooms, or the fearful anticipation in opening a letter that contains test results. Yet, most of us do exactly this and we advise our friends and loved ones to do it too. Maintenance of financial health won’t be any more fun than getting regular checkups, but it can be just as important. Financial markets are more complicated today than they’ve ever been and we are more responsible for our own financial well-being than ever before. Regular financial checkups can help to prevent a poor investment decision from causing long-term damage to a retirement plan or keep an accumulation of debt from growing to a point that it’s impossible to recover from. Just as regular medical checkups can keep us healthy and provide a better quality of life, so regular financial checkups can keep our accounts in good shape and ensure financial well-being for years to come.
This is the case not only for assets but also for debt. One could pay the minimum amount due on credit cards and have the debt pile up until it is too large to be paid off. Of course, borrowing at rates of 18% or higher makes the debt balloon, but the law of compound interest can cause debt to accumulate rapidly if one does not understand that interest accumulates on interest. The consequences of this can be devastating. People who have accumulated a significant amount of debt may have to postpone retirement or work a second job or sharply decrease their standard of living after retirement. They may even end up in bankruptcy. Throughout the current financial crisis, we’ve witnessed people losing their jobs and having little savings to fall back on, with many ultimately losing their homes. As a result of this crisis, saving has increased to an unprecedented level, but it is unfortunate that it took a negative shock to lead to appreciation for having a buffer stock of savings. Wouldn’t it be better if good saving habits were instead the result of routine assessment and maintenance of one’s financial “health”?
If we consider how we take care of our finances in light of how we take care of our physical health, we might come to some interesting conclusions. Everyone knows that regular health screenings are important. Underlying health conditions are not always obvious: nothing hurts, no obvious symptoms are experienced, everything seems fine until one finds a lump while taking a shower. In matters of health, we know that it is best to catch a health condition before it is at an advanced stage. Doctors have long recommended regular physical checkups, and we subject ourselves to routine tests and visits to the doctor even when we feel healthy and in good shape. We also take the usual health precautions, getting flu shots in the winter, washing our hands carefully, taking vitamin and mineral supplements (at least for those of us over…ahem, 40). Recommendations like these abound in doctors’ offices, in the media, and in everyday personal interactions. Everyone knows what precautions they should be taking on a daily, monthly, and yearly basis to maintain their physical health.
But how about financial health? What are we doing to make sure we are doing well in our financial planning? What precautions are we taking to make sure our finances stay healthy? Are we setting aside a buffer stock of savings that can shield us against negative shocks such as loss of income or an unexpected expense? Are we managing our debt wisely and making good investments?
Health maintenance is not exactly fun. I do not particularly enjoy having needles stuck in my arms, spending time reading old magazines in doctors’ waiting rooms, or the fearful anticipation in opening a letter that contains test results. Yet, most of us do exactly this and we advise our friends and loved ones to do it too. Maintenance of financial health won’t be any more fun than getting regular checkups, but it can be just as important. Financial markets are more complicated today than they’ve ever been and we are more responsible for our own financial well-being than ever before. Regular financial checkups can help to prevent a poor investment decision from causing long-term damage to a retirement plan or keep an accumulation of debt from growing to a point that it’s impossible to recover from. Just as regular medical checkups can keep us healthy and provide a better quality of life, so regular financial checkups can keep our accounts in good shape and ensure financial well-being for years to come.
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