Financial literacy is the ability to understand the basics of personal finance and make good decisions about money.
It’s one of those things that’s so fundamental, you don’t even realize that you’re missing out on it until it’s too late.
But even though financial literacy seems like a basic skill, it’s also something that people often fail to develop.
The good news is that just about anyone can learn how to be more financially literate if they put in the time and effort–here are six reasons why it pays off:
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1. It’s Never Too Early to Start Learning
It’s never too early to start learning about money! In fact, it can be a good idea to start learning about money as soon as you are old enough to understand and remember the concepts.
Financial literacy is important because it helps you make better decisions throughout your life. Learning about money now will help you in college and after graduation when it’s time to buy a house or car, save for retirement, invest in stocks or bonds, budget for groceries, pay bills on time — there are so many things that require financial knowledge!
2. You Need a Handle on Your Expenses
When you are managing your money, it is important to know how much you earn, how much you spend and what is left over. You may have some other expenses that don’t fit into this equation such as student loans or car payments, but for the most part your household should be able to break down its finances into a simple equation. If not, it’s time to start planning for retirement or saving up for a big purchase like a car or house.
3. Understand That the Future Is Coming
The future is coming. But the future is not guaranteed. It’s not set in stone. The future is a choice that we make, and it’s an opportunity afforded to us by our ability to visualize it and plan for it, so that when it arrives, it can be what we want it to be.
If you’re reading this article on your phone or tablet right now—and if you are, I’m sorry for taking up so much of your time—you’re probably familiar with the feeling of being able to zoom out from whatever screen you find yourself staring at and look around at all these other screens surrounding you: those belonging to passengers around you on an airplane; the people sitting next to each other on a bus; those far away from their devices but still under their spell nonetheless—you get my point! We are surrounded by screens: TVs (even though they might not necessarily be showing anything); computer monitors; phone displays; billboards advertising products we will buy soon after seeing them advertised (or even before then).
4. A Family’s Legacy Can Help–or Hurt
When you think about your family, what do you see? What do they mean to you? Your family’s legacy is the same thing. A family’s legacy can help or hurt, but no matter what it looks like, it should be treated with care and respect.
What is a family’s legacy? The answer to this question is different for everyone because each individual has his or her own definition of what makes up a person’s heritage; however, there are some common threads that run through all definitions: traditions, values and beliefs.
An example of how a family’s legacy can help us: if we come from parents who taught us good financial habits when we were young and made sure that we understood how to manage money before they passed away so they knew we would be able to manage on our own as adults without assistance from others or having any debt problems (which is not always possible), then our legacies provide support during times when it may otherwise seem impossible because having access to funds will give them peace of mind knowing there will always be enough money available whenever needed–and this can lead directly towards happiness!
5. The More You Know, the Better Off You’ll Be
If you’re reading this, you probably already know just how important financial literacy is.
But if you aren’t sure, let us explain: Your money is your lifeblood. The better you understand it and how to use it wisely, the more successful your life will be. That’s why so many people are working hard to get a handle on their finances—to make smarter choices about where their money goes and what they do with it. Of course, one person might have a different view than another person; but in general, having financial knowledge gives us an advantage over those who don’t know how much things cost or how long we can save for something before we need to take out a loan.
With enough knowledge about personal finance basics like budgeting and saving for retirement (or whatever goal), most people find that they’re able to reach their goals more quickly than expected—and even start reaching for new ones!
6. Financial literacy is all about learning how to handle money.
Financial literacy is all about learning how to handle money. It’s one of the most important things you can do to prepare yourself for a successful and happy life, so it’s never too early to start learning. While there are many ways you can learn about finances, here are some of the basics:
- Understanding what your expenses are and how much they cost is essential in planning for your future financial security. If you don’t know how much money goes out of your paycheck every month and what it goes towards, then it will be difficult for you to make sound decisions about saving or spending money wisely.
- Understanding the future is just as important as understanding the present day because everything from retirement savings accounts to long-term investments involves thinking about what might happen years from now—sometimes decades from now! Having knowledge in this area will help guide these types of decisions so that they strengthen rather than weaken our finances when we need them most.
The bottom line is that financial literacy isn’t just important for your own well-being. It’s a skill that everyone needs to learn, from the youngest to the oldest among us. The more knowledge you have about how money works and how to handle it responsibly, the better off we’ll all be as a society.