Good day, hope l find you all well. Today will talk about financial literacy
What is Financial Literacy?
Is the ability to use knowledge and skills to make effective and informed money management decisions. It is the basic understanding of how money works, creating and achieving financial goals and managing internal and external financial challenges.
How to create financial goals:
- When you get the money make a budget of how you intend to use the money and always try to stick to the budget
- Limit debt – Avoid overspending and impulse buying try to live within your means
- Use wisely your credit cards or overdraft facilities
- Monitor your credit scoring
- Don’t borrow to cover another debt, rather cut on other wants and only stick to the needs
- Create an emergency savings account
- Learn to plan and save for retirement
- Understand the investments you choose for your money
Habits to boost your Financial Literacy
1) Read about personal finance e.g. books like Rich dad, poor dad by Robert Kiyosaki
Pick up one or two subjects which align with your goals, whether it’s budgeting, savings or debt repayment
2) Track your spending
This is a wake-up call to most. Try to track your spending for a month or two. This habit takes a little leg work but it will be a good indication to show you where money is going.
3) Invest in yourself
Personal development is always the best achievement. You have that business idea but do not know where to start. Taking a course towards that will help you embark on your business and minimizes the chances of failing.
4) Focus on what you can control
Sometimes life seems unmanageable and unpredictable. Even if you have all the knowledge about finance, they are some things we can’t control. So rather than wasting our energy on what we can’t control, lets focus on the things we have control over.
5) Track your net worth
If you focus only on your income, it’s easy to think you are getting rich. Whilst you forgetting your expenses. Net worth is your income subtracting all your expenses and your Asset less Liabilities.
“Financial literacy is just as important in life as other basics” – John W Rogers
Author: Talent T Manyonga