Based on the 2020 data of the American Psychology Association, 63% of US adults unanimously voted for the economy as the main source of their stress while 77% felt anxious about the nation’s future. With the ongoing pandemic, 8 out of 10 Americans experience amplified stress due to economic activity reduction that resultedin millions of layoffs. The data only shows that every state is facing a fiscal crisis.
Illinoisin Financial Sinkhole
According to Truth in Accounting (TIA), Illinoisranks second among the states with the worst finances having an unpaid debt of $226 billion.This fiscal crisis is stemmed from the years of unfunded retirement obligations that left the state with a deficit of $144 billion for pensionand $56.1 billion for retiree healthcare benefits. To solve this problem, Illinois’ elected officials decided to oblige its citizens to pay $52,000 tax. Comparing this to the $65,886average income of an Illinois household, this tax is ahuge financial burden. As an effect, Illinois earned an “F” grade from TIA. This even worsens as the state has an unemployment rate of 7.1%, which does not fall within the normal range of 3.5-4.5% set by the Federal Reserve,based on the U.S Bureau of Labor Statistics (July 2021).As a working individual,you must not just completely rely on thegovernment’s actions insteadyou must start planning your future finances and retirement.
Fact #1: Financial Illiteracy is the Main Cause of Fiscal Crisis
There are numerousfactors why a certain individual experiencesa financial crisis. But the main culprit is the lack of financial literacy. No matter how well you are paid or how good the state’s economy is performing, if you do not know how to manage your spending habits nor plan your finances, you are not safe from escaping the rat race—an uninterrupted cycle of getting up, going to work, paying bills. A term developed by Robert Kiyosaki, an American businessman and author renowned for his book “Rich Dad Poor Dad” that teaches financial educationwhich led thousands of individuals to financial freedom. This rat race will continue unless you dare to get out from it by acknowledging first your lacking in financial literacy and second by taking bold steps towards wealth accumulation that includes rigorous discipline.
Personal Banking at Your Service
To assess your financial literacy, you need to have an understanding of the basic concepts behind thisfinancial jargon:
- What is an interest rate? How does compound interest differ from other types?
- What is inflation? And how does it affect you?
- What is diversification? How will it help you?
If you are unable to define and differentiate them, then most likely your foundation in finance is not solid.
If you are looking for financial guidance with decades of industrial experience, Blackhawk Bank Island Lake, IL is committed to helping you towards realizingyour financial goals.