Financial Literacy Month is Here!
Importance of Financial Literacy
Financial Literacy Month occurs every April and is dedicated to encouraging individuals to improve their personal financial knowledge. Becoming financially educated is one of the most useful strategies a proactive individual can implement into their lives. Many people do not understand the importance of becoming financially literate in the first place. There is a general, simple mindset that people are content with if they know there is a continuous income and it ends up in their bank account. This is the mindset Financial Literacy Month attempts to avoid. Becoming financially educated improves lifestyles and secures a safe financial future. Results of financial literacy include better budgeting skills, smarter investments, and a peace of mind that allows one to focus on other important topics. By doing this one will secure their retirement, erase unnecessary losses from personal finances, and increases your earning potential.
Budgeting and planning is one of the most important and easy tasks financial literacy can offer. It is important that people budget their weeks, months, and even years to lock down their finances. It may take a small amount of time to do so, but understanding what you spend within each increment allows more room for excess and investing money. Limiting yourself to only a certain amount per day, week, or month drastically decreases the amount of overspending that usually occurs. Keeping your spending to a strict budget and understand what fixed costs are part of your year such as taxes and bills, will allow for more stable finances. It is also important to budget a good amount of money for variable costs that may occur such as accidents that cause insurance to rise, or unfortunate hospital bills that could be a major setback. Continuously putting money away for these events will put yourself in a solidified position to save excess money for personal spending such as vacation and general shopping. This also leaves yourself with a peace of mind knowing you will never have to scramble for funds and can freely invest and spend all excess finances.
An increasing financial knowledge will also lead to a better knowledge of how to personally invest your money. Wealthy individuals generally do not have one large income, yet they spread their money out and have multiple incomes bringing money into their account. Becoming aware of investments such as bonds, stocks, and real estate that could bring in consistent payments and grow your money in the future are pivotal for an increasing income. By budgeting and putting money away for these opportunities, it will be easy when the time is right to put money into the proper investments. Having the money is one thing, but it is most important to increase awareness of these opportunities. Timing is most important and watching good, frugal investments go by is the last thing anyone wants. Be sure to increase your financial literacy to grow your number of incomes!
Retirement is one of the most important moments of an adult’s life and being unprepared or unable to retire can put a damper on the years everyone looks forward to. It is never too early or too late to begin putting money away for retirement. Learning about the best options for where your money should go is the crucial first step. Your job may offer plans such as a 401K and this may be the best option, but by increasing your financial literacy you will be able to shop around for what works best for your personal needs. The only way to be able to be this efficient with your retirement is by becoming financially literate!