Want to make money? Start by not blowing it

The best offense sometimes really is a good defense. That sports maxim can be applied to personal finances, too.

Devastating losses — whether from poor investments, excessive fees, fraud or something else — can delay reaching your financial goals by years. Yet plenty of Americans say they're having problems keeping losses at bay, including those tied to poor judgment.

For instance, the National Financial Educators Council recently asked more than 3,000 people to estimate how much money they have lost due to their own lack of financial knowledge. The average was $9,725 in losses, but some respondents estimated they had lost much more, including 25 percent estimating losses at $30,000 or above.

"People understand that financial illiteracy costs them money, yet judging from test results and research over the last few decades, there has been no significant improvement in people's financial capabilities," according to a statement by Vince Shorb, CEO of the National Financial Educators Council, a research group.

These survey results might underestimate the extent of losses, as not everyone remembers all their setbacks and others might not even recognize their problems. At any rate, Americans generally haven't kept pace with a financial landscape that has become increasingly complex, according to the report.

Productivity losses

Employers also can be hurt by the financial problems and distractions facing their workers. So says Mercer, a benefits and workplace consultancy that surveyed more than 3,000 employees to find out how much time they spent worrying about money issues while on the job. The answer: about five hours a month, using a median average, which means half of workers were above that and half below.

According to Mercer, more employers now recognize that when workers are comfortable in their ability to meet financial obligations, they're also more likely to be productive and engaged on the job. Many companies thus are establishing financial "wellness" programs that help workers gain control over their finances, absorb shocks, meet long-term goals and more. The programs often are distinct from a company 401(k) retirement programs.

For such efforts to succeed, employers should encourage workers to build financial confidence or "courage," Mercer said. Otherwise, employees might remain so paralyzed that they fail to take even simple steps that can improve their financial situation, such as checking their credit reports or signing up for 401(k) programs. To help workers build confidence on a basic level, Mercer recommends that employers offer programs centered around budgeting, student-loan refinancing, credit management, investing in retirement and non-retirement accounts and other topics.

Victim traits

One way to achieve your financial goals is to steer clear of fraud losses. That's not always easy (con artists and scams aren't necessarily easy to spot), but a recent AARP study sheds light on the types of people who make easier targets.

The organization surveyed more than 200 victims in search of common characteristics. Many victims said they often put money into unregulated investments and placed a high value on wealth accumulation as a measure of success, making them more willing to listen to sales pitches promoting esoteric, get-rich-quick schemes.

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Victims also reported that they frequently receive financially oriented phone calls and emails and, worse yet, sometimes respond to these pitches and to financially oriented television commercials. They also tend to trade and make other financial decisions more often than the general public.

Then there's demographics. Victims tend to be older, male and married, often are military veterans and typically describe themselves as politically conservative. The latter trait might make some potential victims more open to pitches centered around precious metals.

AARP's suggestions to avoid scams range from putting yourself on Do Not Call telephone lists to sticking with investments that are reasonably well regulated (such as mutual funds, annuities and large-company stocks) sold by investment advisers overseen by Finra, the Securities and Exchange Commission or other regulatory entities.

Learning the basics

If you sense gaps in your financial knowledge, check out a self-assessment and learning guide developed by Money Management International. The nonprofit credit-counseling agency compiled the free, online financial-wellness plan in recognition that April has been dubbed financial literacy month. It's thus organized in 30 steps — designed to be tackled at a pace of one topic for each day in April, though you can go through the whole program much more quickly or take longer than a month if you wish.

The format covers basic money topics including budgeting, assessing your net worth, paying down debt, saving, goal setting, ordering credit reports, understanding loans, dealing with financial-receipt clutter and assessing insurance. It doesn't delve much into investing, including the use of 401(k)-style plans or Individual Retirement Accounts. It includes easy-to-fill worksheets and short quizzes, plus references to additional information. The 30-step financial-wellness guide can be viewed at financialliteracymonth.com.

Reach the reporter at russ.wiles@arizonarepublic.com or 602-444-8616.