Financial Literacy: Taking better care of your money

Financial Literacy: Taking better care of your money
Taking better care of your money. Photo credit WDAM

HATTIESBURG, MS (WDAM) - The state of Mississippi received an F when it comes to financial literacy. The 2016 study from the Champlain College Center for financial literacy grades all 50 states on financial knowledge, credit, student loans, saving and spending, retirement readiness and insurance.

Mississippi never received higher than a C rating on those categories. Angela Howze with the nonprofit Financial Literacy Institute in Hattiesburg teaches groups in the Pine Belt about how to better take care of their finances.

"In this day and age, we need to teach our children about money. Let them sit at the table and count out the bills with you. Let them see where that money is allocated to," said Howze.

Mississippi also received an F when it comes to general credit. Howze spoke about the impact of credit cards, and how it contributes to the problem.

"You must be able to rationalize and utilize your credit card effectively. Because if you don't and you're just paying the minimum, it's going to drop your score," said Howze.

More students are in debt than ever before. Howze believes children should be educated before they ever borrow a dime.

"When the kids go to college, the first thing they do is borrow the maximum amount on student loans," said Howze.  "They borrow for four years, then it takes them 25 years to pay that loan back, which is compacted every day at 1.1 percent. That's 25 years of what I call financial prison."

Payday loans offer short-term and high interest loans. If the loan is not repaid in time, that can have a huge impact on your overall credit score.

"If you're in the hole, stop digging. Stay away from the payday loans," said Howze.

People receive letters in the mail advertising short time loans all the time. It's smart to avoid those because of the high interest that they carry.

"Stay away from the checks that come in your mailbox and say 'hey you qualify for 1500 to 6000 dollars,'" said Howze. "Stay away from these checks that say, 'it's school time or it's Christmas time'. It's a trap."

The Financial Literacy Institute offers workshops for residents in the pine belt. For those who can't attend, the institute plans to release a podcast in September.

"We are launching a financial literacy podcast," said Howze. "This podcast will teach you about everything financial literacy as it relates to your 401K, stocks, student loan debt, credit repair, the whole nine yards."