You may have heard librarians talk about information literacy or perhaps media literacy (“fake news”) during library instruction sessions. Through the past year you may have discovered a “new” need to focus on health or financial literacy. As April is Financial Literacy Month, we thought we’d help you apply what you’ve learned from us about information literacy to the realm of finance.
What is financial literacy?
According to the Center for Financial Inclusion, “financial literacy is the ability to use knowledge and skills to manage one’s financial resources effectively for lifetime financial security.” NOVA students may think about finances when it comes time to fill out financial aid forms, but financial literacy is an essential skill to build and exercise throughout your life. Some of the new fintech and neobanks make it easier than ever to make good financial decisions for saving and investing, prompting users to remember to save through digital savings apps, budget planning and spending tracking, monitoring credit and paying down debt.
Sifting for financial literacy
When seeking financial guidance, try using the SIFT method:
STOP
When you’re looking at a website or other source of information, STOP and start with a plan. Consider what you want to know and the purpose of your current inquiry. Where is this information likely to be found? Who might have looked into this before?
Think about the site you are viewing, who made it, and why. Is this the best resource to tap? Can you gauge their expertise in this area by reviewing their academic and professional credentials? Usually, a quick check is enough, but sometimes you’ll want a deep investigation to verify all claims made and check all the sources.
Investigate the source
Know the author’s expertise and the motives of the publisher of the information so that you can interpret it free of bias. Verify the information by seeing what others have to say about the source. Do other sites/resources concur?
A fact-checking site may help. Snopes and AllSides might be familiar to some; as journalists often need to verify their sources, you could look at the Society of Professional Journalist’s Toolbox and employ some of their tactics. Just as there are political fact-checkers, such as FactCheck.org and Truth or Fiction, there are fact-checkers for financial sites too, including the Better Business Bureau (BBB).
Read carefully and consider while you click. Rather than reading one article to the end, open multiple tabs for lateral reading.
Find trusted coverage
Look for the best information on a topic by scanning multiple sources. Find an in-depth analysis and read multiple viewpoints. Don’t forget to look beyond the first few results returned from your search, bypassing the ads that appear at the top of many Google searches. (You can avoid this by using The MarkUp’s extension for Firefox and Chrome Browsers, Simple Search, that eliminates the extraneous material that crowds that first page of results returned in a Google or Bing search.)
Trace to the original
Don’t consider claims or quotes as gospel; trace them back to the original source to be sure that individuals have been quoted accurately and in context. Think about what might have been clipped out of a story, a photo, or video. What might have happened just before or after? When a research paper is mentioned in a news story, go to the original document to be sure that the study has been accurately reported. Find the original source to see the context so you can decide if the version you have is accurately presented. For example, if you’re consulting Wikipedia, scroll down to the references, using the links to view to the original.
If you are interested in learning more about the SIFT method, check out 2019 Mike Caufield’s blog, SIFT (The Four Moves) or his YouTube video series, Online Verification Skills.
Gamification of financial literacy
Financial educators recognize the importance of gaming apps that are designed to help consumers understand the ins and outs of financial investing. Troutwood.com was founded at Carnegie Mellon University’s Swartz Center for Entrepreneurship. The website has a translator of financial terms into plain English, a podcast, and goal-setting challenges for those seeking an understanding of student loans, the S&P 500, auto loans, credit cards, Roth IRAs, and 401Ks. The site features three simulators: Time Portal (timeportal.troutwood.com), Stock Market (troutwood.com/sp500-calculator.html), and Crisis Calculator (troutwood.com/crisis-calculator). Try them out – or look for the Troutwood app in the Apple store where you’ll find a great Buy Sell Hold simulation.
Additional resources
To get you started on your financial learning program, here are additional resources to explore:
The American Institute of CPAs (AICPA) has a website (360financialliteracy.org) designed to help you understand personal finance.
CashCourse.org provides free online financial education courses through instructor assignments or self-study; customizable financial worksheets, a budget wizard, quizzes, and calculators; a personal dashboard for tracking your progress; articles/resources; and a guide to real-life money questions.
Consumer Financial Protection Bureau (consumerfinance.gov) contains educational resources to help consumers make better, more informed financial decisions.
The Federal Deposit Insurance Corporation (FDIC) website employs game-based learning in their computer-based instruction tool, Money Smart. Modules help adults learn how to better manage their finances. All modules are available in English and Spanish.
The Federal Trade Commission’s (FTC) Consumer Information website features a blog and resources about saving/spending money wisely, credit/debt, housing, and work/school.
Khan Academy has a series of Personal Finance life skill advice and resources to guide users into making better decisions.
Congress established a Federal Financial Literacy and Education Commission in 2003. The Commission’s website, MyMoney.gov, features information, games, and fun facts about money, saving, and planning for the future. Lesson plans on the site serve as a resource of federally-funded research reports and articles on financial topics.
FINNY creates bite-sized, personalized learning opportunities covering any topic that might interest you: budgeting, saving more, managing taxes, insurance, investing, and more.
PracticalMoneySkills.com is chock full of resources for learning about topics such as evaluating your finances and understanding credit. It includes resources for teaching children about finance too.
The U.S. Securities and Exchange Commission (SEC) Office of Investor Education and Advocacy has gathered resources on Investor.gov to help individuals “make sound investment decisions and avoid fraud.”
SmartAboutMoney.org has free online courses for learning at your own pace, on your own time. Topics are timely, such as crisis and fraud, education and career, family and finances, holidays and money, housing and transportation, insurance and taxes, retirement and aging, saving and investing, spending and borrowing.
A Wharton faculty podcast Ripple Effect episode focused on financial literacy for teens, discussing “healthcare debt and bankruptcy, AI in financial advising, and why financial literacy education should be lifelong.”
Look for college business school courses that have developed websites for financial literacy education, such as Champlain College’s Center for Financial Literacy. Several academic libraries, eager to support their instructors and students, have developed LibGuides on the subject. Find one on the web that meets your needs.