Are You Financially Literate?

Published on: Mar 13 2013 by admin

Are You Financially Literate?

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Financial literacy is, at its most basic level, understanding how money works. The teachings
in how to create and maintain healthy financial habits so you can adequately provide for
yourself (and your family), invest in products that will increase your personal wealth further,
and contribute to society in meaningful.

Unless you improve your financial literacy you may be heading for problems in the future.
Failure to plan ahead can lead to problems further down your financial path. You may end up
taking financial risks, incurring large amounts of credit card debt, loans, etc, which will only
compound your problems even further. In a nutshell, it pays to be financially literate.

It is never too early or too late to start taking control of your finances and changing the
path you are on to one of financial security. Over the past few years, teaching financial
education to youth has become a government priority. K-12 personal finance education and/
or guidelines have been put in place to start financial education early in order to instil good
financial values and habits in the next generation.

However, the young are easier to reach through education programs as a preventative
measure, however it is adults that are often most in need of financial education and help and
reaching them can prove to be more difficult. There are workplace financial literacy programs
being set up that will hopefully reach the people who need it most and those that are already
in debt or need help budgeting their income, etc.

Financial literacy programs teach people and help them to understand how to make the most
of the money they have and the salaries they earn each month. They then learn to manage that
money, plan ahead for emergencies and periods of unemployment, etc. They will also teach
you how to choose which particular financial services are right for you and your money,
allowing you to see where you are heading and how to set goals to get to where you want to
go.

There is so much financial literacy information available out there that anyone can educate
themselves on the ins and outs of personal finance. There are financial self-help guides,
downloadable spread sheets, budgeting calculators to tell you if you are budgeting correctly
for your income or if you are spending too much.

There are a range of financial calculators available online to help you calculate how long it
will take you to reach a savings goal, how long it will take you to pay off your mortgage,
how much interest you will accrue if you save for a certain amount of time with a particular
interest rate, and how much you should be saving for retirement to hit a certain savings
amount goal that you are comfortable with.

There are also extremely useful comparison websites that trawl the web and compare
financial products so you don’t have to, saving you lots of time and hassle. They compare
financial products such as car insurance for instance, in a table like form, comparing prices,
benefits of each product, etc. Taking advantage of the free resources available to you can be a
great way to start on the path towards becoming financially literate.

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