National Financial Literacy Month officially kicked off on April 1st and in honor of that, free-credit-score website WalletHub released a report on the least and most financially literate states in the US, based on financial education programs, consumer habits, and the results of the WalletLiteracy Survey.
Washington D.C. was the least financially literate area, according to WalletHub’s methodology. Notably, 43% of D.C. residents compare credit card offers before applying, the highest proportion in the country.
The next five states at the bottom of WalletHub’s ranking were Alaska, Nevada, Arkansas, Mississippi, and New Mexico.
Sometimes, people can’t pay the thousands of dollars they owe the IRS. In these cases, advisors should help their clients proceed forward as soon as possible.
“The key element is proactivity,” Lance D. Christensen, a certified public account and partner with Margolin, Winer & Evens, a CPA and business advisory firm in Garden City, Long Island, told Reuters.
“Be proactive in filing for an extension. Be proactive in communicating your inability to pay. If the collections unit of the IRS reaches out to you first, things can get ugly.”
J.J. Redick recently had former NBA player-turned-financial consultant for athletes Adonal Foyle on his podcast on Yahoo’s “The Vertical” where they spoke about the difficulties of managing earnings. Foyle noted that one of the first things he asks players is a simple question about daily spending habits:
“One of the questions I always asks guys when I talk to them is ‘How much did you spend on coffee?’ It seems like a very silly question. …
[But] the question is — part of why we get into so much trouble is because we can’t really look and say, ‘I spend $500 or $2,000 a year on coffee.’ If you can’t really start having this conversation, then you don’t really know what’s happening in your finances.”
“When first considering how to handle their hard-earned money, many people feel overwhelmed by the apparent number of options and they don’t know where to begin. It’s important to understand that there are only so many options including saving cash, paying down debt, saving to a retirement vehicle, saving into non-qualified investments, purchasing insurance, and spending. Being able to envision the limited universe of options helps to avoid the analysis paralysis that so many experience,” Chantel Bonneau, a wealth management advisor with Northwestern Mutual in Los Angeles, told Business Insider.
“Don’t postpone getting started on your planning because it seems overwhelming. Starting with a budget and balance sheet or having an initial discussion with an advisor can make the process easier,” she said.
“April 1st is a day to indulge in silly hoaxes and pranks. But there’s nothing funny about a fraudster carrying out a scam – and no one will yell ‘April Fools’ to make the harm melt away,” said Gerri Walsh, Senior VP of Investor Education at FINRA.
Instead, the team at FINRA offered a few practical tips for “becoming a smarter investor,” including: 1) know with whom you’re dealing, 2) understand how to work with your advisor, 3) know the different types of investments, 4) look for the warning signs of fraud, and 5) don’t hesitate to ask questions.
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