We’ve written more than once about the benefits of seeking help from a financial advisor (See our blog post “Getting Over the Financial Advisor Hurdles”, November 22, 2009. Unfortunately, for those of more modest means, affordability of help is a factor. For those with meager financial means, their biggest problem is a lack of basic financial knowledge.

A recent article in the Sarasota, Florida Herald Tribune by Humberto Cruz titled “Many Americans Get an ‘F’ in Financial Acumen”, January 16, 2010, Mr. Cruz reviews the results of a study by the Financial Industry Regulation Authority (FINRA). According to the article, seventy-five percent of Americans say they are good at dealing with day-to-day financial matters, seventy-seven percent think they are pretty good at math and seventy percent say they have a high level of financial knowledge.

The study by FINRA included five simple questions to test the respondents’ financial knowledge. The average number of correct answers by the respondents was 2.72 out of five.

Here is an example of one of the questions included in the article:

Suppose you have $100 in a savings account earning 2 percent interest a year. After five years would you have more than $102, exactly $102 or less than $102? The correct answer is: More then $102.

It is quite apparent, therefore, that the average American lacks the basic financial knowledge to make effective decisions about everyday financial matters. And, if they can’t afford professional help, what can they do?

The problem is that people must first see the need to get financial education and then take the initiative to actually do something. The good news is that there are many books available at the library or the local bookstore that can help address this issue. Many, however, may be hesitant to buy a book or go to the library. A better option for many may be self-education via the Internet.

There are a myriad of sites that offer tutorials on nearly every financial topic you can think of. Two in particular that include basic financial education are listed below:

(1) National Endowment for Financial Education (NEFE) offers a basic financial course titled “Smart About Money” where one can learn about getting out of debt and budgeting, setting financial goals and investing money to reach those goals.
(2) FINRA offers more than a dozen investor education modules and worksheets to help individual learn about budgeting, saving and investing.

The bottom line is that if you don’t feel you can afford to hire someone to help you with your finances, you can still educate yourself at little or no cost. Doing so will help you make better financial decisions and give you a feeling control over your financial destiny.