April is Financial Literacy Month: How well do you know your money?

When I learned that April is Financial Literacy Month, it made me think about how earning money is only half of the story; how we spend and save the money we earn can be just as important as the amount we make. We work so hard through Community Action to connect people with the hand up they need to achieve economic mobility, but we also want to make sure they can hang on to their successes once they achieve them. That's where financial literacy and money management skills come in. Unfortunately, when people have experienced things like generational poverty, the trauma of scarcity, and even predatory financial practices, conventional money management skills often don't come naturally to them. It's not uncommon to see people react in extremes. Some will spend everything they have (and then some) as soon as they get it, and others will hoard and pinch every penny, afraid to trust even a financial institution to secure their money and help it to grow.

That's why April is the perfect time to connect people with the resources they need to learn best practices for handling their, well, wealth. The Federal Deposit Insurance Corporation (FDIC) offers online educational resources for people of all ages. I especially like the one labeled "Money Smart for Adults." It features 14 modules covering everything from credit cards, credit reports, and credit scores, to mortgages, debt management, financial products, how to save for emergencies, and how to create a spending and saving plan. There is a LOT to know, and what you don't know can absolutely hurt you! We are not playing with Monopoly money out here in the real world after all.

As we move through Financial Literacy Month, you might also notice that we've sprinkled a few financial literacy quiz questions in our social media posts. They're not designed to be hard questions, but they're certainly not easy either! I'm putting the questions (and answers) below. I encourage you to take a minute to read through them and test your knowledge. You might find that you learn a thing or two. And if you do, then Financial Literacy Month will have been successful!

Retirement Accounts - Which statement is true:

A. Both Roth and Traditional IRAs require withdrawals at age 73

B. Only Roth IRAs require required minimum distributions

C. Only Traditional IRAs require required minimum distributions

D. Neither requires withdrawals

Credit Cards - What's unique about a credit card cash advance?

A. It has a lower interest rate

B. It earns rewards points

C. Interest starts accruing immediately

D. It has no fees

Mortgages - If you pay "points" on a mortgage, what are you doing?

A. Paying a penalty for early repayment

B. Paying upfront to reduce your interest rate

C. Paying your property taxes early

D. Increasing your loan balance

Answers: C, C, B