Does your spouse seem to be running out of money his or her bills every month? Your partner’s financial literacy may need some improvement.
The good news is that there are straightforward, accessible ways to enhance it. Before doing so, your loved one will need an introduction to what financial literacy is, and why it is essential.
What is financial literacy?
Simply put, financial literacy refers to a person’s ability to understand how money works and how to manage it. It is also having the skills necessary to make effective and informed financial decisions. Many countries have state-run programs that impart these techniques to its citizens.
Financial literacy is also being able to identify your assets and liabilities. Assets refer to property that will increase in value over time. Conversely, liabilities depreciate.
A lack of money management skills is a problem, not only in emerging economies but also in developed ones. People the world over need to show a firm grasp of the principles necessary to manage their finances.
You need to understand how your money can work for you, even when you don’t try too hard to make it do so. Knowledge of fundamental financial principles like financial goals, investments, and budgeting is necessary.
Why is financial literacy essential?
There are ongoing financial trends that are making money management skills a necessity. They show why you need to make informed money decisions.
1. Consumers are bearing the burden of financial decisions
First of all, while previous generations depended on government pension plans, existing ones have to manage their finances themselves. Furthermore, governments put the burdens on companies to provide these money management avenues. People have to make wise investments and allow them to reap financial rewards.
2. Financial options are complicated
Also, consumers can now choose from an array of financial options. Investment companies offer a variety of savings plans. These allow them to choose from different interest rates and maturities.
Their complexity makes it necessary for you to be aware of the financial risks that come with them. They can affect your ability to buy a home or save for your retirement.
3. There is a lack of government aid
Furthermore, government aid isn’t always available. Governments typically offer help in the forms of social security or other grants, but these aren’t enough. They are safety nets, but not enough for survival.
4. Our life spans are long
Another for money management skills is long lifespans. People live longer than before. They would, therefore, need more money for their retirements.
5. Our environments are changing
Finally, technological advancements make financial literacy a must. There is an increasing need for computers, cellphones, tablets, and other smart devices. Managing your money will enable you to pay for these assets.
10 Ways to Improve Your Financial Literacy to Manage Your Money in a Smart Way
It’s never too late to improve your financial literacy, and it isn’t daunting. Here are ten simple ways to enhance it.
1. Begin now
First of all, don’t procrastinate. Make up your mind to increase your financial knowledge and money management skills today,
Learn about investing, estate planning, credit management, insurance, taxes, and retirement. They present opportunities to enhance your assets. Decide which interests you and build your financial foundation around it.
2. Use government resources
Most governments give their citizens chances to build their finances. They offer many programs on this topic.
For example, The Financial Literacy and Education Commission is afflated with the U.S. Treasury Department. It coordinates the efforts by the private and public sectors to improve the money management skills of U.S. citizens.
Sites like MyMoney.gov teach the fundamentals of financial education. They show you what to consider when buying your home, balancing a checkbook, and investing in stocks.
3. Read Newspapers
Another way to improve your financial literacy is to read the finance section of your daily newspaper. The Wall Street Journal and Financial Times give insights into the world of global finance and business.
4. Surf the Internet.
The internet offers a wealth of resources to improve your financial literacy. News networks like CNN have a finance tab. They present informational programs like Quest Means Business, hosted by affable and knowledgeable CNN business anchor, Richard Quest.
Indeed, financial resources on the internet are plenty. For example, it’s possible to apply for online personal installment loans. With reasonable interest rates, lower monthly payments, and accessibility, such loans offer flexibility regarding financial management.
5. Take a course
Many adult education centers offer certificate or college-level courses on financial management. You can take such classes through an online college if you prefer to work from home,
6. Listen to Talk Radio or Personal Motivational Courses
Many syndicated talk shows offer sound financial advice. Finance gurus are on hand to answer listeners’ burning questions about finance management.
Personal motivation coaches such as Anthony Robbins, Bob Proctor, Robert Kiyosaki, and Mary Morrissey provide advice on life and wealth management. They aim to help people develop mindsets that will gear them towards personal and financial success.
7. Use Financial Tools
8. Set up an investment club
Investment clubs provide lessons on, of course, investing. Organizations like The National Association of Investors Cooperation offers investment education and investment experiences.
9. Teach your children simple financial skills
Also, teach your children simple budgeting skills like saving. Get them to put a part of their allowances in their piggy banks each week. Starting them young is the key to enhancing their financial literacy as adults.
10. Watch Financial Information Programs On Television
Television programmes such as CNN Money, or CNBC’s Squawk Box point the way towards better financial management.
Note that you should be wary of get-rich-quick infomercials. As a rule, if a program offers a money-making method that seems too easy, it’s probably unreliable.
In all, financial literacy is as essential as language literacy. You can become financially literate in many ways.
By Michelle L.