You might have heard the term before: Financial literacy.
And then you might have wondered what it means and whether you’ve got it. So let’s clear up some confusion….
What financial literacy doesn’t mean is that you’re qualified financial expert. It doesn’t mean you can read vast tracts on Britain’s banking reforms. And it doesn’t mean you should start serving up financial advice to your friends and relatives.
Instead, it’s a much more useful concept, designed to help you navigate the world of household budgets. Financial literacy means you’re equipped with the skills required to understand everyday finances. And being financially literate means you can then use that knowledge, and the resources around you, to make informed decisions about your economic status.
And that – essentially – should help you stay on top of your money.
So, where does financial literacy come from? You know, how can you really get started? These are our best tips for ensuring financial literacy…
One of the best ways to ensure your family is financially literate is to start young. From child bank accounts to a structured, scheduled savings regime, the more contact with finances that children have, the more financially literate they’ll be. Of course, one of the most popular ways to ensure kids are financially literate is by having them perform chores and get paid for it.
Use your life experiences
It’s not just about teaching lessons – one of the best ways to obtain a little more financial literacy is to use all those everyday life experiences. So, you’re changing your job, getting a workplace pension, getting a mortgage… Whatever it is, this offers a fantastic opportunity to further your knowledge.
One of the biggest reasons that people struggle with money is that they don’t respect it. Forgive us for getting a little philosophical here, but money is more than just the fiver in your pocket. It’s not just litter to be thrown away every time you go into your favourite store; it’s the route out of poverty; it’s what stops your family from starving. It’s incredibly powerful and demands respect.
Go beyond the basics
While there will always be constants, the financial world is constantly shifting. Rather than basing your decisions on out-dated facts, if you want to ensure your household is financially literate, thn do a little extra reading and research. Whether it’s the occasional glance at the finance pages on your news app, or a full-throated delve into a key topic, the more knowledge you possess, the more secure you’ll be, financially speaking.
Get help from trusted sources and people
No matter what your finances currently look like, we could all use a little help an advice now and then. But choosing who to take advice from is crucial. Impartial, authoritative websites that seek only to inform are an obvious choice. Likewise, rather than solely relying on friends and families, make sure you also obtain the views of qualified advisors who can offer greater detail (and help inform your decisions).
Take your time
Whatever reason why you want to boost your economic understanding, it’s important to recognise the fact that it won’t happen overnight. First, it takes a bit of dedication (just like any part of money management, like creating a budget). It also takes time to fully understand economic principles, and find the right publications and trusted sources that fit your needs. But once that’s all locked in, you’ll be well on your way to financial literacy. And it’s absolutely worth it in the end.