Let’s use the crypto craze as a springboard to better financial literacy

From Super Bowl ads to major city mayors accepting crypto payments, it’s become impossible to ignore the rise of cryptocurrencies, digital assets hailed by some as the future of finance. According to a recent NBC News poll, one in five Americans have traded, invested, or used cryptocurrency.

Cryptocurrencies, decentralized financial assets built on the blockchain, are generating excitement and activity among new investors, from baby boomers to Gen Z. It has also helped shine a light on the needs of the big public in terms of financial knowledge.

The fact is, improving your financial literacy can have benefits beyond your wallet: Harvard researchers have found that increased financial literacy contributes to better mental and physical health and is associated with a lower risk of depression.

If you want to improve your financial literacy, here are three important lessons to keep in mind:

Don’t let market volatility stress you out
Between rising inflation and interest rates and continued uncertainty surrounding the war in Ukraine, financial markets have been on a rollercoaster ride over the past few months. When your portfolio is rapidly losing value, it can be tempting to exit the markets altogether. But don’t panic – carefully consider all available options, including staying diversified and not making major changes to your portfolio, especially for long-term investors.

Timing the market – knowing exactly when to enter and exit to minimize losses and maximize potential gains – is nearly impossible, even for professional investors. During the highs and lows, it’s essential to remember that when you’re in it for the long haul, daily sales shouldn’t be the focus.

Market volatility is an integral part of investing and shouldn’t cause panic or sudden changes in your investments if you take a long-term approach.

Count on your community

Developing your financial literacy can seem overwhelming if you are inexperienced in money-related topics, even though Dogecoin memes abound. But you may have access to resources that can help you get started. Programs in your local community can serve as an essential (and often overlooked) financial lifeline for people anxious about money and the future. You may find that you have more resources than you think.

Research what’s going on in your city for financial education training or classes, especially at a local college or nonprofit organization. There are also resources like Financial Health Network that can help you on your financial literacy journey. Or you can speak to your financial advisor or benefits provider for additional content or materials that can help improve your financial education.

Conversation Starters – Talk Money

While many of us grew up learning that talking about money is taboo or rude, staying silent about your financial concerns or matters can have a negative impact. Although it may seem awkward to talk about money at first, it gets easier over time.

It’s especially important to be transparent and open with your partner about money, which can prevent financial conflicts in the future. If you have children, be sure to include them in discussions about finances as well, as open conversations about finances can help them develop a healthy relationship with money as they grow.

Outside of your personal financial education, seeking advice and resources from online, virtual, or in-person financial professionals can help reaffirm your learning and be an essential tool to start, refresh, or maintain your financial security.

While cryptocurrency may have sparked your interest in financial literacy, learning more about broader financial markets is a smart move. Once you have a better understanding of how money works, you can begin to put actions and behaviors in place to improve or protect your financial situation.

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President, Retail Consulting and Solutions, Prudential

Brad Hearn is the President of Retail Advice and Solutions, which brings together the extraordinary face-to-face advisory expertise of Prudential Advisors with Prudential’s hybrid advisory team and digital advisory capabilities – creating a unique organization with a end-to-end responsibility for providing a holistic offering of financial advice and solutions across the entire advice continuum.

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