According to a 2017 Consumer Financial Literacy Survey, credit card debt is on the rise, as nearly four in 10 U.S. adults carry credit card debt month-to-month.
The survey, conducted by the National Foundation for Credit Counseling, also found that less than half (40%) of U.S. adults have a budget.
At the end of 2016, household debt climbed to $12.58 trillion, according to the Federal Reserve Bank of New York, reaching near-2008 levels. Non-housing debt, which includes auto and student loans and credit card debt, are fueling the rise in debt. Credit card debt hit $779 billion and student loans hit $1.31 trillion.
To deal with debt and still have savings, financial literacy is more important than ever. In addition to tapping into online resources provided by federal agencies such as the Consumer Financial Protection Bureau and the Small Business Administration, consider watching these finance-related TED Talks. The topics range from behavioral economics experiments that reveal fascinating insights into how people spend money to finance tips and strategies for saving.
1. Saving for Tomorrow, Tomorrow
Behavioral economist Shlomo Benartzi proposes that people aren’t saving enough due to a lack of action and an aversion to loss. “Behavioral finance is really a combination of psychology and economics trying to understand the money mistakes people make,” Benartzi says.
2. Financial Literacy
Mellody Hobson, president of a money management firm and board member of DreamWorks Animation, discusses how growing up in a single-parent family inspired her to become fiscally responsible. “I want to live in a financially literate society,” Hobson says.
3. The Battle between Your Present and Future Self
Cognitive psychologist Daniel Goldstein says that people often use commitment devices, such as locking away a credit card, to avoid negative behaviors. But these devices can be problematic by reminding people of their lack of self-discipline. “Resisting temptation is hard,” says Goldstein, a principal researcher at Microsoft Research.
4. Could Language Affect Your Ability to Save Money
Why do countries with seemingly similar economies and institutions display radically different savings behavior? Keith Chen, a UCLA professor and behavioral economist, discusses how differences in how we speak relate to differences in how we save.
5. One Life-Changing Class You Never Took
Alexa von Tobel, founder and CEO of the investment firm LearnVest, examines why Americans do not get a formal education in personal finance, even though money is the No. 1 cause of stress for young people. She also discusses how fiscally irresponsible choices can cause a domino effect. “It’s not about being rich,” von Tobel says. “It’s about living your richest life.”
6. How to Buy Happiness
Harvard Business School Professor Michael Norton says money can buy happiness – you just have to spend it right. When people are prosocial with their money, meaning they use it to benefit others, they report being happier. “Spending on other people has a bigger return for you than spending on yourself,” Norton says.
