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April is Financial Literacy Month: 5 Steps to Improve Your Personal Finances

April has been recognized as Financial Literacy Month every year since 2004. The goal is to raise awareness among Americans about the importance of managing their finances well and give everyone an opportunity to review and improve their personal finances.

Financial Literacy Month originated from the Youth Literacy Day, which was part of the National Endowment for Financial Education’s High School Financial Program. However, the results of a recent national financial literacy test make it clear that improving financial literacy is important for all ages, not just youth.

The NFEC Financial Literacy Test

Each year, the National Financial Educators Council (NFEC) conducts a nationwide financial literacy test designed to gauge three main areas of financial literacy: motivation to learn, topic knowledge and the ability to identify initial action steps toward improving personal finances. The 2021 financial literacy test was completed by more than 73,000 Americans living in all 50 states.

The test questions cover the following 10 subjects outlined in the NFEC’s financial literacy framework and standards:

  1. Financial psychology
  2. Savings, expenses and budgeting
  3. Account management
  4. Jobs and careers
  5. Loans and debt
  6. Risk management and insurance
  7. Investments and personal planning
  8. Credit profile
  9. Skill development
  10. Economic and government influences


Scores by Age Bracket

Not surprisingly, older age brackets generally scored higher on the test than younger age brackets. But the differences aren’t as pronounced as you might think. Here are the scores for each age bracket:

  • 15-18: 63%
  • 19-24: 71%
  • 25-35: 76%
  • 36-50: 77%
  • 51 and over: 78%


Put another way: If the NFEC’s financial literacy test were being graded, not a single age bracket would receive a grade higher than a C. Three other national literacy tests administered by the NFEC also revealed a relatively low level of financial literacy among Americans. The average score among all age brackets on the Financial Foundation Test was 72%, the average score on the Advanced Financial Education Test was 58% and the average score on the Student Loan Test (taken by college and college-bound students) was 59%. Or in other words, an F.

In a press release announcing the test results, the CEO of the NFEC stated what appears to be fairly obvious: “According to these test results, Americans have a long way to go before they are prepared to make more informed financial decisions.”


How to Improve Your Financial Literacy

In recognition of Financial Literacy Month, here are 5 steps you can take right away to improve your personal finances.

  1. Figure out where you are financially. If you want to manage your finances better, you first need to determine where things are right now. For example, is your monthly income greater than your expenses? How much personal debt are you currently carrying (especially credit card debt)? And how much money are you saving for long-term goals like college education and retirement?
  2. Get your financial house in order. It might be time for some financial organizing. Regardless of what type of system you prefer — whether it’s paper, electronic or a little bit of both — the most important thing is to get your financial records and documents organized and filed properly. Choose a system that works best for you and that you will stick with going forward.
  3. Monitor your credit regularly. You can obtain a free copy of your credit report every year from each of the three major credit reporting bureaus (Experian, Equifax and Transunion) so there’s no excuse for not staying on top of your credit. Simply visit to order your reports. If there are any errors, let the bureau know right away so they can be fixed and your credit score adjusted.
  4. Create a budget. This doesn’t have to be as intimidating as it might sound. Make a list of all your fixed monthly expenses (like your mortgage, utilities, insurance, car payment, etc.) and a separate list of your total monthly income, starting with your salary or wage. Also include other sources of income like child support, alimony, dividends or investment income. Now compare your expenses with your income. Be prepared to make adjustments if expenses exceed income.
  5. Deal with your debt. Excessive debt is the biggest obstacle to achieving financial goals for many people. Start by figuring out how much money you owe to which creditors and the rate of interest you’re paying on each loan. Concentrate on eliminating high-interest-rate debt first, like credit cards. Pay down cards with the smallest balances first so you can cross them off your list, eventually working your way to other debt like car loans and possibly even your home mortgage.


How We Can Help You

We would be happy to talk to you about how you can take steps like these to improve your personal financial management. Give us a call to schedule a meeting at your convenience.


The commentary is limited to the dissemination of general information pertaining to Frontier Wealth Management, LLC’s (“Frontier”) investment advisory services. This information should not be used or construed as an offer to sell, a solicitation of an offer to buy or a recommendation for any security, market sector or investment strategy. There is no guarantee that the information supplied is accurate or complete. Frontier is not responsible for any errors or omissions, and provides no warranties with regards to the results obtained from the use of the information. Nothing in this document is intended to provide any legal, accounting or tax advice and Frontier does not provide such advice. This information is subject to change without notice and should not be construed as a recommendation or investment advice. You should consult an attorney, accountant or tax professional regarding your specific legal or tax situation.