What are stocks, bonds, mutual funds? What are GDPs and GNPs? If you do not know these terms, then maybe you need to start investing in financial literacy. In this article, we will discuss what is financial literacy and its importance in our financial lives.
FINANCIAL LITERACY
In my opinion, financial literacy is the acquisition of financial knowledge to improve one's financial health. This may mean acquiring knowledge on how to manage your earnings to save for the future. This may also mean learning different financial jargons so you can make better financial decisions.
Have you ever wondered why there are so many hard-working people that end up having no savings at all? It is because they lack financial literacy. Some only know how to save in banks but they don’t know that there are more methods which give more returns than a bank.
As we broaden our knowledge about financial literacy we get to encounter more terms, methods, and techniques to help us make better decisions for our future. If applied properly, it will help us improve the way we spend, save, protect and invest our money.
I know of people who have high paying jobs but have low financial literacy. In my opinion, in 5 to 10 years’ time they will still be working on the same job and will not have any savings at all because they did not invest in financial literacy. These is because some people make the wrong financial choices, like upgrading their lifestyle quickly when they receive salary increases.
Some people have bank savings which is good, but having financial literacy will allow you to have direction in your savings. Like saving for an emergency fund, educational fund or retirement. But more than that, saving in a bank doesn’t really give you that much returns right? If you improve your financial knowledge you will be able to invest in stocks, bonds, insurance policies, managed funds and other investment vehicle which will give higher returns that will be very beneficial for you in the future.
ALWAYS REMEMBER It’s not about how much you earn but how much you keep”
The more we invest in financial literacy, the better will be the quality of the decisions we can make for ourselves and for our family.
“An Investment in knowledge pays the best Interest”
-Benjamin Franklin
