What is financial literacy and why is it important? :: Msgi online

Unfortunately, these essential topics are rarely discussed in school. It takes a bit of learning, practice and trying on your own to get good at it.

So the first question that comes to mind is “What is financial literacy?” »

Financial literacy is the ability to understand the pros and cons of money-related decisions, weigh the costs, and make confident, informed choices.

We all know that retail is facilitated by credit. It’s normal for most of us to borrow money to fund our current and longer-term needs. We borrow money in the form of student loans, credit cards and various consumer loans to cover emergency expenses or finance major investments such as land, a house or a car…

The truth is, like many other things, a healthy financial future takes time, patience, research, and some education.

For example, a financially literate person knows that if he earns P5,500 per month, he cannot spend more than P5,500 per month without going into debt. Someone with a better understanding of finance might be familiar with the 50/30/20 rule of budgeting (spend 50% on your needs, 30% on your wants, and save 20% of your income) and aim to set aside 1,100 P per month. for unforeseen expenses or vacations.

I hope you now have an idea of ​​what financial literacy is and why it is so important. Now is the time to take the first steps and start learning the skills you need to build a better financial future.

TO COMMIT

Now you know that your actions and your attitude towards money are what drive your habits. First, you need to make a realistic commitment to yourself and your family to make wise financial decisions. You should make it a habit. In other words, don’t adopt a budget and stick to it for just one month. For this to work, the commitment must be long-term.

ASSESS YOUR FINANCIAL SITUATION

Look at all of your finances — from your income and savings to your expenses and borrowings. It will help you understand your financial decisions and think about ways to take control and improve. It’s important to be as open and honest with yourself as possible. This assessment is a crucial step, consider it a fundamental building block for your financial literacy journey.

CLEAN UP YOUR FINANCIAL CLUTTER

You need to clear the clutter so you can focus on improving your financial situation. Get a notepad, create an Excel spreadsheet, or download an app where you can organize and group all your outings. Once listed, browse through all the items – you might notice that you’ve subscribed to services you don’t really use, or you’ve spent too much on nice-to-have items.

And remember, if you need help along the way, ExpressCredit is here for you!

Other articles will follow.

Sarah J. Greer