Financial literacy is a sufficient level of knowledge and skills that allows individuals to make informed and effective decisions in various areas of personal financial management, such as savings, investments, real estate, insurance, tax, and pension planning.
Improving financial literacy: where to start?
- Build an emergency fund.
- Keep a monthly budget.
- Change your attitude towards purchases.
- Protect your savings from inflation.
- Invest your funds.
- Use tax deductions.
- Take advantage of government benefits.
- Insure your property.
What should you study for financial literacy?
- The nature of money
- Planning and accounting
- Financial system
- Investing
- Financial analysis
- Financial thinking
What does financial literacy teach?
Knowledge of financial literacy allows you to control your budget, manage debts and expenses, find opportunities to increase income, and expand your business.
Signs of a financially literate person
- Number of income sources. Ideally, there should be several.
- Financial discipline.
- Planning major purchases.
- Financial goals.
- The ability to save and use discounts.
- Investments.
- Having an "emergency fund".
A financially literate person keeps track of their own income and expenses. They build both short-term and long-term financial plans. It is best to create a financial plan that includes: tracking available and spent money; optimizing expenses; planning income and expenditures.