Financial literacy can be a friend and support system to help you navigate financial choices and transactions. Moreover, financial knowledge is a powerful tool that allows you to analyze and filter information and enables you to understand the nature of financial transactions.
Why it matters?
Being financially literate helps us make sound decisions regarding using credit, establishing financial goals and budgeting, saving, and investing wisely. It also teaches us about risk management (insurance), taxes, and estate planning. Learning to identify fixed, variable, and discretionary expenses enables us to develop budgets to control living expenses, leading to greater savings and wealth.
Knowing how to acquire, use, and manage credit can save you a lot of money and deplete household financial resources. The difference between a low credit score and a high credit score can be very costly.
Have a plan to manage your available financial resources. Create short-term, mid-term, and long-term financial goals that will drive each component of personal money management and produce greater lifetime financial well-being.
Have a family conversation about your and your family’s values to choose how the family’s financial resources will be used to ensure financial sustainability, resilience, and wealth.
Everyone should know that financial literacy is empowering. It equips you with the skills to take control of your life and maximize your financial resources. Through financial literacy training, every person, even those with limited means, can learn how to manage finances better and improve their financial and economic status. Learn all there is to know about personal money management concepts and their applications. Additional information can be found at www.sfepd.org.
By: Theodore R. Daniels, founder and President, Society for Financial Education and Professional Development, Inc. (SFEPD)