Financial Literacy Month Feels Different This Year!

April almost got away from all of us without our very popular April Financial Literacy Quiz!

As a reminder, being financially literate means understanding how money is earned, saved and invested in order to make the best financial decisions for our own situations.  Admittedly, all of this feels a bit surreal right now!

Research suggests that higher financial literacy has been clearly linked to responsible financial decisions to help us all

• Plan for our financial goals

• Avoid the highest cost debt

• Build an emergency fund AND earn higher interest on it

Financial Literacy Day on Capitol Hill has been canceled this year, although many recognize these skills are more critical than ever! 

Because my questions last year were so easy, I went to my collection of hard questions to try to stump all of you this year. Multiple responses might be correct.

1. How much should my emergency fund be?

a. This is a silly question  - enough to cover my emergencies of course

b. 3-6 months of average expenses

c. 2 years of average expenses

d. Whatever it needs to be so I can sleep at night

e. No idea.  Need to call LFS.

2. What is the biggest risk of owning long term bonds for capital preservation/safety?

a. Falling interest rates

b. Rising interest rate

c. Inflation

d. I have no idea since I am not interested in capital preservation/safety

e. No idea.  Need to call LFS.

3. If inflation is 2%, in what investment option am I most likely to lose purchasing power?

a. Stock market

b. Real estate

c. TIPs

d. Cash in multiple coffee cans scattered throughout my house to ensure adequate diversification

e. No idea.  Need to call LFS.