Women, Can you Answer these 3 Questions?
FINANCIAL EDUCATION IS FOR EVERYONE
Are you a mother or a daughter?, a bread-winner or a housewife?, an entrepreneur or an employee? Regardless your role and identity, you can’t escape dealing with money and finances in your everyday life.
Whether it is for grocery shopping, buying daily needs for kids and family, making big purchases like cars, furniture, and home renovations, planning for kids’ education and what not, women are equally and more accountable on all area of managing finance.
On the contrary, women are financially less competent when it comes to financial decision-making. According to the U.S. Department of Education, over 3.8 million American adult women have third-graders’ skills on financial literacy (Mitchell & Lusardi, 2014).
Can you imagine, only 22.5% of the women were able to answer these 3 basic financial literacy questions:
Q.A. Suppose you have $100 in a savings account and the interest rate was two percent per year. After five years, how much do you think you would have in the account if you left the money to grow?
- More than $102
- Exactly $102
- Less than $102
- I don’t know
The correct answer is 1. You’d have $102 after the first year. Over the next four years, interest will grow on that $102, meaning you’ll have more than $102.
Q.B. Imagine that the interest rate on your savings account was one percent per year and inflation was two percent per year. After one year, how much would you be able to buy with the money in this account?
- More than today
- Exactly the same as today
- Less than today
- I don’t know
The correct answer is 3: less than today. “If inflation is two percent, prices go up two percent,” says Lusardi. “But if you only earned one percent in your saving account, you basically can buy less.”
Q.C. Do you think the following statement is true or false:
Buying a single company stock usually provides a safer return than a stock mutual fund.
The answer is false. “A single company is a lot riskier than a basket of stocks,” says Lusardi. “Don’t put all of your eggs in one basket.”
It is fundamental for women to be financially competent. Since financial literacy and wealth are strongly correlated, it is even more crucial for women who are considering entrepreneurship as a career. Financial literacy is essential to make all-inclusive saving and investment decisions.
Studies show that financially educated women make a financially healthy family.
Remember, A strong woman stands up for herself. A stronger woman stands up for everybody else.
Sense 2 Cents also is an initiative of a financially educated strong woman who has created amazing learning materials for kids and families.
Can you afford to miss an opportunity to educate yourself and empower entire family?
Remember, financial education is for everyone.