Financial literacy is important for everyone, regardless of income, financial situation, background or upbringing. Financially literate people are better able to make informed financial decisions & hold a deeper grasp on topics such as investing, budgeting, credit and insurance. All of which can lead to a more secure financial future. Financial literacy can also help protect you from scams or predatory lending practices by making them easier to identify.
There are numerous benefits to improving your financial literacy, including but not limited to:
Improving your skills, knowledge and behaviours allows you to make more informed decisions regarding money. This in turn increases the likelihood of using debt responsibly and avoiding overspending. It also makes the terms of credit agreements less daunting to read and easier to understand, which is an important factor in identifying how to avoid interest and fees
Setting and reaching financial goals
Having both a broader, and deeper, understanding of money allows you to better define financial goals and also map out, and compare, the potentially different ways to reach them e.g. saving vs paying down debt
Nobody likes that feeling of not understanding something and often the self-inflicted negativity that comes with it. But when it comes to money, you have all the power to become clued up on your situation. It doesn’t mean needing to understand cryptocurrency or what blockchain is, it just means being clued up on your financial situation. This can do wonders in fighting off mental and physical fatigue the stress of not knowing can bring
Protecting yourself from fraud
A big benefit of upskilling your financial knowledge is that it becomes a shield, We’ve all likely seen something that’s set off an alarm in our head as not being quite right, with it later turning out to be a scam. This is our spidey sense and when it comes to money it’s no different. By improving this mental muscle, you strengthen the shield you have against scammers & this protection can even sometimes extend to those around you
How to improve your financial literacy?
Okay, so we know what it is and why it’s important. But how on earth do we improve it? Well, we’ve got 4 ways you can improve your financial literacy today:
1. Start taking control yourself
Whether it be a spreadsheet or using Incredible 😉 you can start today by getting a bearing on where you stand with your debts. We have a great blog on this: How to get out of credit card debt for good
2. Take a financial literacy course
There are many financial literacy courses available online and in person, all designed with the aim of teaching you the basics of personal finance, such as budgeting, saving, investing, and credit. One of our favourite examples comes from the MoneySavingExpert launching Academoney which is a free online financial education course provided by themselves and the Open University
3. Read content about personal finance
This is a topic that’s been written about for years so naturally there are many great books and articles available on personal finance. They cover a whole range of topics from investing and saving to retirement planning or even debt management.
4. Talk to a financial advisor
Sometimes we just need someone to get us started on our journey, this is where a financial advisor can help. They can help you assess your financial situation and create a plan to reach your goals. They can also answer your questions and provide guidance.