Wikipedia.org defines financial literacy as, “The ability to understand finance. More specifically, it refers to the set of skills and knowledge that allows an individual to make informed and effective decisions through their understanding of finances.” Based on that definition alone, it is clear that financial literacy and its understanding is a valuable skill to have. So when does this important education begin and where does it come from?
Possible sources of financial education are family, friends, teachers, and the people around us. These sources have the possibility of teaching us about personal finances and money management techniques, but do they? By the time a child turns 18 and becomes an adult, are they ready to make informed and effective decisions based on their financial knowledge. For many, the answer is no; countless Americans never learn the valuable skill of managing and understanding personal finances.
Luckily it is never too late to learn and educate yourself. The following is a list of tips of how and where to begin your financial education:
- Start NOW! If you are like many individuals, you were not lucky enough to be taught the importance of financial literacy as a child. Now you’re an adult and it seems like an impossible task and just too much to learn. But getting started is the best way to get it done! Use these following sources to begin your education:
- The Internet: Technology really is an amazing thing. Almost any type of knowledge can be found over the world wide web. You are already reading this blog, so you must know something about this magical device. Use google and search, read, search, and read some more about everything money related.
- Books: Have you ever heard of the public library? Well if you haven’t, it’s a place that lets you rent all sorts of books for FREE. Go there and rent books about finance and money management that appear interesting to you. Now read them!
- Family and Friends: You must know someone who is good with money and always seems to have enough. Talk with them, ask question, or even request advice. Most people who have money are financially educated and will be willing to share their secrets.
- Track Your Spending: If you track the spending of your money, you will see where it goes and begin to notice patterns. You may find that you are spending much more money than you thought on certain things; wasteful things like that $5 cup of coffee. Knowing where all your money goes will help you further understand your spending habits and control your finances.
- Begin to Save: Start small and over time your savings will grow. Do little things like making your own coffee instead of buying that expensive cup from your local shop. Make meals at home and avoid high priced restaurants. As you see your savings grow you will become more motivated and maybe even begin to enjoy it.
It’s time to stop waiting for the education to come to you! Educate yourself and be one step closer to becoming Set for Life.