Financial literacy isn’t just important for knowing how to balance your checkbook or open an investment account, though that alone can be incredibly valuable. Financial literacy gives you the tools to make money decisions that are right for you, whether you’re saving up to buy your first car or figuring out how to pay down your debt. It also empowers you to make smart financial choices for your future, no matter what path you take in life.
Here are 10 ways financial literacy can improve your life, starting today.
1) Financial Literacy Puts You in Control
A little bit of financial literacy goes a long way towards avoiding unpleasant surprises and preventing common mistakes. It may seem like money is beyond your control, but by learning about personal finance you can better prepare yourself for bad luck and unexpected expenses. The more you know about how to handle your money, what makes it grow, and how to avoid temptation with credit cards and other tempting financial products, you will build a wealth of knowledge that puts you in charge of your finances.
2) Financial Literacy Builds Confidence
People who are financially literate tend to be more confident in managing their money and future planning. That’s because they have a solid grasp of how money works, how it flows, and where it goes. They don’t feel confused or scared about making major purchases or financial decisions. For example, people with limited finances are more likely to stress over paying for expensive medical treatments than those who know how much they can afford to spend on healthcare costs.
3) Financial Literacy Lowers Stress
Managing your money can be stressful. Not having to worry about where your next paycheque is coming from will reduce stress in your life dramatically. Once you get some savings in your bank account, you will definitely feel the difference.
4) Financial Literacy Gives Opportunity
When you’re financially literate, you understand how money works. This gives you an opportunity to not only plan for your financial future, but also to invest in that future. You can take more risks or create an even better life for yourself. It’s not enough to just have money; it’s about understanding how money works so that you can put your knowledge into action.
5) Financial Literacy Gets You What You Want
Don’t Pay Cash, When You Can Pay Smart!
Financial literacy is defined as an understanding of how to use financial products, including credit cards, bank accounts and savings accounts, in order to achieve your life goals. As you gain more financial literacy, you’ll be able to purchase items for personal fulfillment without overspending and even by taking advantage of amazing cashback programs. For example, if you want a nice handbag but are on a tight budget, you can figure out how much money you can realistically save toward that goal.
6) Financial Literacy Allows You to Move Forward
There are a number of reasons why financial literacy is important. It can help you make informed decisions, improve your personal well-being and even save money. By educating yourself about finances, you’ll be able to move forward in life with greater confidence. Below are 10 ways that financial literacy can change your life for the better.
7) Financial Literacy Makes Planning Easier
If you’re reading books like Rich Dad, Poor Dad and The Simple Path to Wealth, then you know that one of key concepts of financial literacy is controlling your own financial destiny.
If you make your own spending and saving decisions instead of relying on someone else to make them for you, then it’s much easier to make sure your future self is taken care of and all your bases are covered. You can save more money and spend less simply by making smart decisions today.
8) Financial Literacy is Important Everywhere – Even Abroad
Whether you’re traveling overseas or spending time at home, financial literacy is important. It can make your travel experiences run more smoothly and save you lots of money, too. If you want to be prepared for everything from currency exchange rates to bank fees abroad, make sure you’re familiar with these 10 ways financial literacy can improve your life!
9) Financial Literacy is Important During Difficult Times – Like Retirement
You don’t have to work forever, which means eventually you’ll reach retirement. For most people that means time for relaxation and leisure activities. Unfortunately, if you haven’t paid attention to your finances during your working years, you might find yourself in financial straits in your golden years.
10) Financial Literacy is Helpful for Your Grandchildren
Financial literacy among young people seems to be decreasing significantly with each passing generation. That’s why it’s important to gain some cash AND knowledge and pass it on to your next generation. That’s how literacy can help your family in succeeding.
It’s never too late to learn how to handle your finances in a smarter way. Being good with money may not be something that comes naturally to you, but with some work and effort, it can be learned. With better financial literacy, you’ll have more control over your income and expenses. You’ll also likely see an improvement in your credit score by handling debt more responsibly. That’s why we wrote for you 10 ways financial literacy can improve your life.