November is financial literacy month! But, what does that mean and why does it have its own month? Let’s start at the beginning as we look at what it means to be financially literate. The Federal Literacy Task Force (2009) described it as:\nHaving the knowledge, skills and confidence to make responsible financial decisions.\nFinancial Literacy is about two things:\n\n Smart decision-making, and\n (here’s how it’s related to Cinderella) Making dreams come true.\n\nWhen we talk about financial literacy, it’s not about definitions like fixed vs. variable mortgage rates, EFTs, NASDAQ (although I’ve linked the words in case you were curious) so don’t get caught up in understanding the terms because it all comes down to your situation, how complicated or uncomplicated you want it to be and your life goals. Do you really need to know about the stock market if you are afraid of risks? Probably not – unless you were trying to impress someone at a Bay St. bar. So why worry about it? But what you do need to know in this case is that investments are important and that, depending on your needs, the choices are plenty. However, there are also a lot of professionals who can help you with that. Understanding that these decisions have to be made to ensure your financial future is healthy is the first step to financial freedom, but first you must decide what it is you want from life.\nHere is your homework:\n\n Determine a short- and a long-term goal ( e.g., trips, going back to school, retiring)\n Decide how much money you will need\n Figure out if within that time (i.e., before you leave on the trip) you’ll have enough money saved up:\n \n If you do, great! Give yourself a pat on the back and then go back to step 1 and pick something harder…\n If not, you need to evaluate\n \n Can I earn more?\n What expenses can I cut? Here’s a good time to reflect on your spending habits.\n Can I achieve that goal with less money?\n Can I delay and give myself more time to reach that goal?\n \n \n \n \n\nThe story of Cinderella teaches us that dreams do come true, but fairy tales like this one doesn’t mention the financial part. Cinderella worked for free for her evil stepmother and stepsisters, so she must have banked a lot of goodwill to earn her a visit from her fairy godmother, marriage to a prince and a castle! A castle isn’t cheap to run either. Her happily ever after ending hinges on good financial management.\nSo it all comes back to goals and dreams and the money decisions you need to make to get there. Memories might be priceless, but that’s one of the few things that is and why we have a month dedicated to helping you make memories (and paying for them).