According to Investopedia, “Financial literacy is the ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing. Financial literacy is the foundation of your relationship with money, and it is a life-long journey of learning…”
This definition covers quite a bit about personal finances. How can it benefit you? How can you start to be more financially literate? I’d like to discuss where to begin and how to find good resources to help you be successful. Therefore, I want to discuss 3 ways to help you improve your financial knowledge.
Start a Budget
First, list your income and then list all your monthly expenses (include debt payments). Subtract your expenses from your income. Secondly, review the results and application:
- Does it equal zero? Congrats, your income covers all your expenses.
- Application: Consider areas where the costs can be reduced. Can you apply the savings to help you with a financial goal?
- Does it result in a positive number (surplus)? Congrats, you are living below your means.
- Application: Consider how you can use the surplus to support your financial goal(s). Can you use it to fund an emergency fund or to save for a down-payment on a house. Or both?
- Does it result in a negative number (deficit)? That means you are living above your means.
- Application: You need to consider what in the budget needs to be adjusted. If nothing can be done, are your debts taking a toll on your budget? If so, consider a debt management program with potential lower interest rates, lower monthly payments & waived fees.
There are many resources to help you improve your financial knowledge. You can choose the method that suits you best. Plus, you can choose the topic you want to learn about most. For example, consider a podcast, blog, website or book. Here are some podcast recommendations:
Here are some blog recommendations:
Download An App
Apps can make our lives easier. With an app that houses all your finances, it can help you be more aware of your finances. It can help you stay on track to reach your goals. In addition, it can assist getting organized and make you aware of money habits. One helpful app is Qapital. It helps you personalize your savings, spending and financial goals. No matter what, choose an app that best meets for your personal or family needs.
In conclusion, when you think about your financial literacy, remember you don’t have to do everything at once. However, learning to handle your finances can take time. Consider starting with what’s most important or what you find the most interesting; then let your knowledge grow from there. We at Apprisen are here to help you along your journey. Finally, you can reach out to Apprisen anytime. Plus, we have resources available on Facebook, Instagram, Twitter and Pinterest.