What Is Financial Literacy? Why Financial Literacy Is Important?
To understand What Is Financial Literacy? and why financial literacy is important? it refers to a variety of important financial skills and concepts.it is important to build solid foundation for success. Financial literacy is a key to economy success.
Generally Financial literacy is the ability to understand how to make sound financial choices so you can confidently manage and grow your money.
The number one problem in today’s generation and economy is the lack of financial literacy. This actually equips us with the knowledge and skills we need to manage money effectively. It’s one thing that will impact almost every aspect of your life,
Lack of financial literacy is a reason why Nearly half of Americans don’t expect to have enough money to retire comfortably. Credit card holders debt has reached its highest point ever during COVID-19 crisis is causing stress in their personal finances.
One can understand the importance of financial literacy by understanding the four pillars of financial literacy basics better. They are:
- Credit /Managing Debt
- Paying bills
most smartest way to Creating a budget and living within your means is one of the most basic aspects of staying on top of your finances. Track how much money you receive each month against how much you spend in an excel sheet, on paper, or in a budgeting app. Your budget should include income (e.g., paychecks, investments, alimony), fixed expenses (like rent/mortgage payments, utilities, loan payments) and savings.
Saving is one of the most important aspects of maintaining a healthy financial situation. Your saving increase your investment ability so you can invest and set your goal for your future.
Successful investing requires learning how to make your assets work for you to achieve your financial goals. Before invest you must understand the ways to invest (e.g., stocks, bonds commodities), the inherent risk/reward.
Credit /Managing Debt
A good credit score is your financial shadow which can help you in your future investment and people can do fare less dealing without any risk of loss .Once a year, consumers can request a free credit report from the three major credit bureaus—Experian, Equifax, and TransUnion.
Although seemingly, it’s important to have a routine to pay your bills on time. why financial literacy is important for students
digitalive team perspectives on what does financial literacy mean
To be financially literate is to know how to manage your money. This means learning how to pay your bills, how to borrow and save money responsibly, and how and why to invest and plan for retirement.