In some cases, financial literacy may seem not important to a group of people. Perhaps, others may think that it only refers to people who are involved in the financial industry. Thankfully, this is just a MISCONCEPTION. Financial literacy is crucial in our lives and everyone needs to learn and master it, from young children to elderly people, despite their age, gender and level of education.
If we learn and elevate our financial literacy properly, indeed this will bring a huge impact to all of us. By the way, what is financial literacy? Financial literacy is the ability to understand and apply the skills set of financial knowledge in order to make wise decisions when it comes to money management.
In other words, financial literacy is having the skills and knowledge on how to manage money appropriately. Let’s have a look at the reasons why financial literacy is vital to everyone.
1. SAVES us from accumulating too much debt
If we elevate our financial literacy, we will then be able to know how to manage our financial resources effectively. At the same time, we will understand the value of money by knowing the difference between our wants and needs. In this way, we will try not to spend on unnecessary things and expensive items. As a result, being a financially literate will help us to prioritize things that are more important in our lives.
2. ENCOURAGES us to prepare better during emergency cases
It might be difficult if one never tries to save his or her financial resources. If we are financially literate, we are able to know how to make saving and budgeting in a more organized way. Most importantly, by learning and enhancing our financial literacy will save us from the risks of borrowing money and getting more debts when we confront difficult times or in times of emergency.
3. MOTIVATES us to instill financial literacy among the young generation
Financial literacy is not only meant to the working adults per se. It can be said that every parent in this nation needs to teach their children on the importance of financial literacy. For instance, guiding them to start saving. Only then, the young generation will learn and realize that they also need to respect their parents for providing them with the daily needs and they will be more responsible with the money given to them. Thus, they will aware that earning or making money is not easy. This will help the young generation to prepare for their finance years ahead and lift them to learn smartly, and finally motivate them to gain achievement in their education.
4. BOOSTS nation’s economy
Financially literate nations will create more stable communities. Financial problems such as cases of bankruptcy and debts can be reduced. Furthermore, those who are financially literate are also less likely to become a victim of identity theft, money scams and prevent the nations from falling prey to greed.
5. STIMULATES us to invest money
An individual who is financially literate will try to find ways to build wealth and create a better future not just for himself/herself but also for his/her family. Once you have learned on how to invest strategically, then only you have the confidence to grow your money and make a profit over time.
6. LEADS us to have a life without financial distress
A financially literate person will have more advantages than a person who is lack of financial knowledge and planning in terms of budgeting for monthly expenses, saving and managing debts. Let’s elevate our financial literacy everyone so that we can have a life without money-stress!
7. GUIDES us to gain a happy retirement
It is crucial to always get prepared and ready for a secure retirement while you are still working and healthy. You need to have a retirement plan in order to achieve a happy retirement. It is all about having enough money to help you pay off debts or monthly bills even after your retire. A financially literate individual will have a big picture of their retirement plan in their mind and execute this crucial plan immediately after they start working. This is to ensure that they will score debt-free without feeling worries about debts and gain a secure financial future once they reach retirement age.
8. INSPIRES us to learn and seek more knowledge
When you start learning and executing your financial knowledge and skills, you shouldn’t stop learning and seeking more knowledge about financial literacy. We should always continuously seek advice from the financial experts and have a thirst for knowledge to improve our financial status and ensure a lifelong financial stability and surely, to overcome our financial strains in our lives as well.
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