It used to be that home economics would teach you how to knit socks, peel apples and fill out a check register, but modern class schedules can sometimes leave young people without the economic know-how to read a check ledger. Even adults may need to brush up on the financial knowledge to ensure they know exactly how mobile banking and opening an account can help their finances. Efforts to increase financial literacy for all age groups is on the rise as more reports find that, across the board, people don't know how banking tools work or how they might be beneficial.
Checking your ledger
A Pew study, Safe Checking in the Electronic Age, revealed that consumers were still getting slammed with hidden fees and contract agreements that were costing them large amounts of money which they didn't sufficiently understand at the time of signing. Some problems included undisclosed overdraft amounts and fees for checking and debit cards unknown to the customer upon opening the account.
Similar to the debacle that raised ire with Bank of America customers when the chain was threatening monthly debit card fees, these payments are required regularly to maintain account access. Part of the problem here according to Bradenton News is the nature of the literature banks provide to people.
"Consumers are expected to wade through long, confusing documents and may be subject to steep, unexpected fees to access their own accounts," said Susan Weinstock, the director of the Pew project. "Consumers must have understandable, transparent information that enables them to make educated choices when comparing one checking account's costs and benefits to another."
Educating en masse
Another study by USA Funds found that students continued to struggle with management of personal finances, in part due to the same complaints leading to the Pew results. What's more, the National Foundation for Credit Counseling, in part with the Network Branded Prepaid Card Association, released its 2012 Consumer Financial Literacy Survey showing this problem stretches beyond college-age individuals across age and other demographic barriers. These issues are rooted in a lack of understanding and transparency between banks and their clients, resulting in additional fees and bad feelings.
Online courses through USA Funds help students navigate the professional jargon, while web-based resources can assist any consumer with understanding the different terminologies involved with financial instruments. Employing the guidance of a financial advisor or bank associate can also provide you with valuable information without the hassle of resorting to mountains of independent research.
Understanding your options
According to the Financial Literacy survey findings, half of Americans aren't monitoring their monthly expenses or bank statements, meaning if additional fees are coming out for financial services, they may never catch it. The study also found most people don't keep track of their annual credit score or make use of other tools that could assist with mortgage, budgeting and other tasks. Without a complete grasp of the products and services or what the tools customers are already using might be costing them, your personal wealth could suffer.
It's important that you ask questions about different financial tools and associated fees when opening an account or signing up for a service with your bank. Asking for financial tips regarding these services and more are just a few of the things your local branch can assist you with. It's your money – know what's happening with it to better manage your economic health.