Are you truly financially literate? After 26+ years as a financial advisor, I’ve seen firsthand: most people aren’t. You might manage daily expenses, but long-term planning—retirement, taxes, investments—often feels daunting. That’s normal. Financial literacy is learned, not innate. I’m Elisabeth Dawson, and I’m here to guide you.
Financial literacy empowers financial independence. It’s not about knowing everything, but knowing enough to make informed choices.
Let’s explore five key questions to assess your current standing and identify growth areas.
Why Financial Literacy Matters
Understanding the Real Stakes
Financial literacy isn’t just a “nice to have.” It’s a survival skill in today’s world. Without it, you risk falling victim to bad advice, high fees, poor planning, or even running out of money in retirement.
The Confidence Gap in Financial Decision-Making
Many people tell me, “I just don’t feel confident about making money decisions.” That’s because the traditional financial system was built to benefit from your confusion. But when you understand your money, you take back control—and that’s powerful.
What Is Financial Literacy?
Beyond Balancing a Checkbook
Financial literacy includes budgeting, understanding investments, tax strategies, retirement planning, and wealth protection. It’s about seeing your financial life as a system, not a series of isolated actions.
Knowing vs. Doing
You might “know” you should save, but are you doing it intentionally? Are you investing in yourself the way you should? That’s the difference between surface-level knowledge and real literacy.
Question 1 – Do You Know Where Your Money Goes Every Month?
If you can’t answer this without opening a banking app, you’re not alone. But it’s a sign that something is off.
The Power of a Cash Flow Analysis
Tracking your spending is the first step toward making powerful financial decisions. I call this identifying your “Lost Opportunity Costs.” It’s the money you’re giving away every day—either knowing or unknowingly—on subscriptions, fees, interest payments, impulse spending, and more.
Identifying Lost Opportunity Costs
Recoveringthousands of dollars each year isn’t magic—it’s mindfulness. That money can be redirected into building your dream life. But first, you need to find it.
Question 2 – Can You Explain the Risk in Your Investments?
Most people have no idea how much risk they’re taking until it’s too late.
Why Risk Profiles Matter More Than You Think
Knowing your risk score isn’t just about peace of mind—it’s about survival in a market downturn. If you’re not aware of how a 20% drop affects your portfolio, you could be setting yourself up for a rude awakening.
Understanding Market Corrections and Recovery
In 2008, many people lost 50% of their account balances—years of hard-earned money down the drain. If that happens to you, do you know how long it would take to recover? Do you have time to wait?
Question 3 – Do You Have a Long-Term Income Plan for Retirement?
You’ve saved. Great. Now what?
Why Income Is More Important Than Accumulation
A $2 million nest egg looks great—until you start drawing from it without a plan. Without guaranteed income streams, you run the risk of outliving your money. That’s why I teach clients to create a distribution plan to generate income from their assets, not just grow them.
Transitioning from Saving to Spending
This is the hardest shift for most people. But with the right strategy, it doesn’t have to be scary. It can be liberating.
Question 4 – Are You Taking Advantage of Tax-Saving Strategies?
The IRS doesn’t send thank-you notes for overpaying in taxes.
The Hidden Cost of Tax Mistakes
I see people unknowingly lose tens of thousands of dollars every year simply because they weren’t taught to ask the right questions. Are you taking advantage of tax-loss harvesting? Timing your income? Adjusting your withholdings? If not, you’re likely paying too much.
The Power of Proactive Planning
Financial literacy means thinking ahead—not just reacting in April. Your tax plan should be an ongoing part of your wealth strategy.
Question 5 – What is Your Best Investment?
Spoiler alert: you are.
Understanding Your Human Economic Value (HEV)
Your greatest financial asset is your ability to earn. Have you protected that with the right insurance? Have you calculated your HEV and used it as a guidepost for future planning?
Protecting Your Greatest Asset—You
When structured properly, cah-value whole life insurance isn’t just about death benefits. It’s about creating living benefits you can use to fund your goals. And yes—this strategy is often overlooked by traditional financial advisors.
Bonus Insight – Do You Use a Wealth Recovery Account?
How to Set One Up
A Wealth Recovery Account (WRA) is a separate checking account used to capture and repurpose your “found money.” It’s not your spending account. It’s your future-building account.
Using It to Rebuild Wealth Intentionally
All your redirected savings—from canceled subscriptions to tax refunds—should go here. You’ll be shocked how fast it grows when it’s structured and automated. This is how we create financial velocity.
How Did You Score? Self-Assessment Recap
- Can you clearly track your spending?
- Do you know your investment risk score?
- Do you have a reliable retirement income plan?
- Are you reducing your lifetime tax burden?
- Are you investing in yourself with intention?
If you answered “no” to more than two of these, don’t panic. However, it is time to take action!
Becoming Financially Literate is a Journey, Not a Destination
Financial literacy isn’t something you achieve once and forget. It’s a mindset. It’s about asking better questions, surrounding yourself with the right advisors, and choosing to take ownership of your future. You don’t have to do it alone—our team is here to help every step of the way.
Unlock Financial Confidence: Start Learning Today
So—are you financially literate? If you’re unsure, take this as your sign to start learning, start asking questions, and start reclaiming control over your financial life. You are your greatest asset, and you deserve a future built on clarity, confidence, and freedom.
Let’s design it together.
Schedule your free consultation today by calling (619) 640-2622 or by clicking here.
