What You Should, But Might Not Know About Financial Literacy
Education and Careers Each of us appreciates a support system to help us make good decisions. Savvy advice from friends allows us to analyze and filter information, which can result in beneficial outcomes.
Financial literacy can also serve as a friend and support system to help us navigate financial choices and transactions. Moreover, financial knowledge is a powerful tool to analyze and filter information.
What’s to learn?
Financial literacy helps us to make sound decisions regarding the use of credit, establishing financial goals and budgeting, saving and investing wisely. It also teaches us about risk management (insurance), taxes and estate planning. Learning how to identify fixed, variable, and discretionary expenses enables us to develop budgets to control living expenses, which leads to greater savings and wealth.
"...financial literacy is empowering; it equips you with the skills to take control of your life and maximize your financial resources."
Knowing how to acquire, use and manage credit can build assets and limit the depletion of household financial resources. Creating financial goals—short-term, mid-term and long-term—drive each component of personal money management and can produce greater lifetime financial well-being.
Start them early
Teaching financial literacy from an early age, starting in kindergarten and continuing through high school, makes sense. This training should focus on teaching children how to determine the difference between "needs" vs. "wants" and instructing high school students how to manage their credit scores to limit interest rates charged for consumer and mortgage loans.
It is important to realize that financial literacy is empowering; it equips you with the skills to take control of your life and maximize your financial resources. Every person, even those with limited means, can learn how to manage finances better and improve his or her economic status through financial literacy training.
Feeling left out?
Financial illiteracy, however, can be a devastating foe. It limits the ability to achieve economic security and promotes inequality in the marketplace. What you don’t know can hurt you. Avoid this obstacle by attending financial literacy seminars and workshops.
Learn all there is to know about personal money management concepts and their applications. Discover how to read the terms and conditions of loan agreements, use investment vehicles to create wealth, determine the opportunity cost of potential expenditures and protect your current income and assets by purchasing appropriate insurance.
You decide. Do you want financial growth at each stage of your life? Then make a commitment to becoming financially literate right now.