FA Center: Take these 3 steps towards financial literacy


It’s always a good time to invest in your financial literacy and well-being —examining personal spending and saving decisions. Here are three ideas to help get you on a path to financial sustainability.

1. Create a plan: This sounds basic, but it’s important and worth repeating. Only about 30% of Americans have a long-term financial plan. Making this plan doesn’t have to be complicated. Start by writing your financial goals over the next six months. Then think through the next five- to 10 years. Of course, your goals will change but writing them down will help you visualize your future self so that you can take tangible steps towards it. While meeting with a financial counselor is certainly in your best interest, you can start with online tools and worksheets. Among Americans who make a financial plan, 32% use an online system and 24% opt for a personal accountant or adviser. Getting organized can begin with a few clicks of a button.

2. Manage your debt: Having a clear picture of your financial obligations is also an important step. Americans have an average of about $90,000 in debt. This number is comprised of auto loans, credit cards, student loans and mortgages. In terms of demographics, millennials have an average mortgage balance of $224,500 and Gen Xers have a balance of $238,344.

Even though mortgage rates have increased moderately from 2020’s record lows, they are still low from a historical perspective. There are roughly 11 million homeowners who could save approximately $277 per month, or more than $3,300 per year, by refinancing their mortgages. About 2 million of these homeowners could save more than $400 per month. If you’re a homeowner and haven’t refinanced your mortgage recently, now is an optimal time to lock in a lower rate for the long term. Freeing up a meaningful amount of cash per month will surely help you on a path to financial freedom.

3. Create a community: Improving financial literacy is a collective goal as well as a personal one. More than half of American adults express anxiety about their financial situation, more than 60% of U.S. families don’t have funds for a rainy day, and almost 80% live paycheck to paycheck. There is ample need to improve Americans’ financial well-being and if you can, it’s a worthy pursuit to help those who need your knowledge, expertise and support.

Sanjiv Das is CEO of Caliber Home Loans. Previously, he was the CEO of CitiMortgage.

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