Important of Financial Litracy
As young individual, retirement may seem to be years away from you. But still it is one of the best acheivement for you to beging savings for your retirement even before getting the Job.
This is because the earlier you start; the longer you can invest savings and the more money you will end up with. Below are the importants of financial literacy
BENEFITS OF FINANCIAL LITERACY
Broadly i say unto you, the benefit of financial literacy empowers young individuals to make wise and smarter decisions when it comes to their finances.
FINANCIAL LITERACY PREVENT DEVASTATING IN FINANCIAL MISTAKES
The rate of flotting loans may come in different plattforms and interest rates, while creating a fixed deposite or contributions can’t be withdrawn until the fixed date of witdrawal.
For some individuals those who are unaware of these financial facts, likely to make poor financial decisions which can cost long-term implications causing themfinancial tability or impact life plans.
Financial literacy helps n individual to avoid making terrible mistakes with their personal finances.
FINANCIAL LITERACY PREPARES PEOPLE FOR FINANCIAL EMERGENCIES
Most topices relating to financial literacy such as saving or emergency preparedness helps an individual to be aware of the uncertain times.
Losing your job or passing through a major unexpected expense can cause serious impact financiall; an individual can beanbag the blow by saving regularly.
FINANCIAL LITERACY CAN HELP INDIVIDUALS REACH THEIR GOALS
Understanding the best way on how to budget and save money, individuals can create a good saving plan.
These plans define their accoutability to their finances, have expectations, hold them accountable to their finances, and set a course for achieving the most important financial goals.
In some cases an individual might not be able to afford the dream today; they can create a plan that can help make it happen.
FINANCIAL LITERACY GIVES RISE TO CONFIDENCE
Imagine you are to make a life-changing financial agreement with yourself without all the necessary information. Having an idea about finances, you can confidently reachout to the major choices of life with stronger confidence.
You’re more likely to achieve the outcomes of your heart desire and worry less about suprises or negative impact by unsought endings
STEPS TO IMPROVE FINANCIAL LITERACY SKILLS
Financial literacy development has to do with learning and practicing skills related to debt payment and how to do your bugets handly with no fears.
Financial literacy means understanding and using credit and how to investment in products smartly and with wisdom
The good news is that, no matter stage of life you are and how financially stable or unstable, it’s never too late to start the practics of good financial habits.
Below are several practical strategies you can learn to start a good financial habit.
Important of Financial Litracy
CREATE A BUDGET
You can start by tracing the amount of money that comes into your account every month and how much you spend. You can use Excel or paper
While creating your budget plans; you should includ the following fixed expenses, investments, alimony, rent/mortgage paychecks, payments, utilities, loan payments, discretionary spending nonessentials such as eating out, shopping, and travel, and savings.
PAY YOURSELF FIRST
To master savings skill, has to do with the kind of goal you choose to save in, some might choose paying for higher education decide on how much you want to put into contribute every month, once the month has come to end set the amount aside before you dividing up the rest of your expenses.
PAY BILLS PROMPTLY
Stay ahead of your monthly bills; always make sure that your payments arrive on time. Consider to take advantage of your automatic debits from a checking account or bill-pay apps, and sign up for payment reminders.
GET YOUR CREDIT REPORT
Once in every year, a consumer is liable to request for a free credit report from each of the three major Equifax, Experian, and TransUnion through any of the federally created website.
Go through these reports and dispute any the errors by informing the credit bureau of inaccurac
Dies. Because you are eligible get three of the credit reports, and consider spacing out your requests throughout the year to monitor your credit regularly.
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CHECK YOUR CREDIT SCORE
Checking your credit score can enable you to obtain the best interest rates on loans and credit cards, among other benefits. They are several methods of monitoring your credit score.
Or, if you can afford to and want to add an extra layer of protection for your personal information, use a credit manging agent In addition, be concious of what can increase or decrease your scores, such as credit utilization and credit inquiries ratios.
MANAGE DEBT
Use your monthly earnings to stay ahead of your debts by reducing the way you spend then try to increasing repayment, such as paying down the loan with the highest interest rate first.
If your debt is excessive, contact lenders to renegotiate repayment, or find a debt counseling program.
INVEST IN YOUR FUTURE
If your employer offers a 565(k) retirement savings account, make sure you sign up and contribute the maximum to receive.
Consider opening an individual retirement account and creating various investment vessels of stocks, fixed income, and commodities.
Seek for financial advice from professional advisors to help you determine how much money you will need to retire comfortably and develop methods to reach your goal.
Important of Financial Litracy
EXAMPLE OF FINANCIAL LITERACY
Msen Joseph Ngutor is a secondary school teacher who tries to inform his pupils about financial literacy through his curriculum.
He elite his student on the basics of a range of financial topics, such as personal budgeting, debt management, saving for college and retirement, insurance, investing, and even tax planning.
His students can be able to use these strategies for things like renting an apartment, getting a first job, or even just paying for fun activities such as going to the games and movies.
WHY IS FINANCIAL LITERACY IMPORTANT?
Financial literacy provides an individual the tools and resources they need to be financially secure throughout their life.
The lack of financial literacy can lead to many individuals to fall into situatios, such as overspending and accumulating corroborated debt burdens. This, in turn, leads to poor credit, bankruptcy, housing foreclosure, or other negative consequences.
CONCLUSION
Financially literate is a most study that has to do with learning and practicing of variety of skills related to budgeting, managing and paying off debts, and understanding credit and investment products.
To the best of my knowledge i believe that you have read this article and you are ready to sit upright and make good financial saving plans.