If Angela Joell had a dime for every senior who told her they wished they had become more financially literate earlier in life, she would be very rich indeed.
“This is by far the number one reflection that I hear from clients over 60,” said Ms Joell, a client financial wellness manager at The Argus Group.
“If you focus on understanding concepts such as investing, mortgage rates, the benefits of paying off mortgages early and living within your means, you will be in a great position.”
Yet even the words “financial literacy” might seem daunting to anyone who flinches when a bill or bank statement arrives in the mail box, or comes out in a sweat when they open an Excel spreadsheet.
In layman’s terms, financial literacy simply means having the awareness, knowledge, skills, attitudes and behaviour to make good decisions about your money.
If that still sounds like a tall order, you’re not alone – but it’s not too late to learn.
“Financial literacy is the bedrock of financial well-being and yet so many of us are not aware of where we stand,” Ms Joell said.
“Even though I had worked in the banking industry for years, I was surprised to discover that there were elements of my financial well-being that I had not taken into consideration for my future.
“At 40, I started to become aware of the full spectrum of available wealth opportunities so I can say, without hesitation, that it is certainly not too late to shift focus and make new and empowering decisions for yourself.
“Why? Because at this stage in your life, time seems to fly by and, before you know it, you will
have to rely on the decisions you made in the past to sustain your future.”
CFA Society Bermuda spread the word through a financial literacy series in partnership with the Bermuda College PACE programme in September and October.
“I want to see people be more comfortable talking about money, more open discussions taking place with increased sharing of ideas, working together to reduce financial stress and improve financial security,” said Robin Masters, a Chartered Financial Analyst.
Ms Masters said people need to integrate financial literacy into their daily lives.
“Just as we all think about our physical health and our mental health, we should be thinking about our financial health in a similar way,” she said.
“It’s just like anything else you do in life. You make decisions every day on all kinds of things, and you make those decisions using what you know and what you’re trying to accomplish, what is right for you or your family, your own personal circumstance.
“Money decisions are no different. Know where you are and think about your daily actions.”
The Society has received “overwhelmingly positive” feedback from its course.
“People often tell us that they feel more focused, that they are more confident with their money decisions, and most say that they have now begun to create their own action plans to help them achieve their goals.”
Ms Masters said people in their 40s tend to start thinking more about their family and the future.
“My message would be to keep your focus on what is important to you and create financial goals that will help you plan how you can use your money to get you where you want to be,” she said.
“At that age, there’s still have a long runway ahead until retirement, so take that opportunity to plan for the future that you want.”
You should be intentional with your financial decisions, focus more on establishing good habits than absolute dollars, and avoid comparing yourself with others.
“Learn what you can, always ask questions when dealing with service providers and make sure they explain things to you in a way you can understand before making decisions,” she said.
Martha Harris Myron, the author of Bermuda’s First Financial Literacy Primer – The Dawn of New Beginnings, said financial literacy often does not come to the front of mind until a personal or family crisis hits, largely because people are so busy living their stressful lives.
She advised that financial literacy is the catalyst to better managing your whole life.
“Bermuda islanders – and I am one of them – and people everywhere tend to get lulled into complacency when the home and work environment are going well,” she said.
“The old Bermudian adage, ‘it’s not nuffin’ to do wit me!’ does not work anymore. What happens globally impacts us locally. Change is constant today. Change happens without notice.
“Financial literacy gives you a far better understanding of your personal and family financial big picture. It gives you the knowledge and control to anticipate and plan for change, by developing your intuition for contingency preparation.”
Ms Harris Myron advised a few first steps:
Pick one financial topic
Start by tracking what you spend every week, then move to every month
Look at your paycheque and start tracking where the money goes
Keep at the topic until you understand the outcome
Learn to budget by using websites such as udemy.com
Join a frugal savings or beginner finance blog, where people shares tips on understanding household and work finances.
The ultimate goal, for many, is to leave a legacy for their family.
Ms Joell at Argus said: “We often fail to truly quantify our net worth as a family, and many avoid engaging in open and comfortable discussion about the concept of wealth and sustainability.
“We speak of income and promotions, and new opportunities that pay better than the previous position; we are attracted to lofty titles and the social recognition and status they bring; we strive to make our families proud.
“While there is nothing wrong with this, I simply encourage families to broaden the conversation and educate their children about individual and family net worth. At 40, you are well placed to make this happen.”
The first step is to “do something”.
“Don’t wait. You are ready to move to a place of wealth, a place of family legacy and a place of sustainable financial wellness.”
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