Financial Literacy - Possessing the skills and knowledge on financial matters to confidently take effective action that best fulfills an individual’s personal, family and global community goals.
It is the ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial well-being.
However it is not an easy task, it needs a long-term behavioral change initiative, multiple approach and sustaining action to notice gradual improvement.
Financial Literacy is so important no matter what age group are you belong to, whether you are just starting your high school,college, planning to start a family or even retirement - The knowledge on finance will help you archive your goal.
In today's world making thoughtful and informed decision about your finances is a vital factor, with hundreds of schemes and products available and all of them trying to get your business. If you are not careful you can easily be duped.
Many people today are feeling a high level of financial anxiety and are looking for answers, unfortunately there is no guarantees or easy answers to these questions, but there are several things you can consider to help you relieving your financial anxiety.
1. Be as informed as you can be about your finances. After all, you are the one who is going to have to live with your decisions.
2. Try to find a financial institution or financial advisor that is knowledgeable, that you can trust, and with whom you can work comfortably. They cannot make all your decisions, but they should be able to help you put your situation into perspective and help you evaluate your options.
3. Try to develop good financial habits. Just paying attention to how you spend your money will probably lead to some ideas about how to save more. Over time, your savings can make a large difference in your future financial lifestyle.
4. Do the easy things. Starting to save early for a college education, enrolling for direct deposit of your paycheck, and using some form of automatic saving plan will help you accumulate funds. In addition, you will know you are taking positive actions.
5. Try to develop a financial plan of some sort. It does not have to be complicated or extensive. In fact, you may want to tackle one part of your finances at a time, such as looking at all your insurance needs. Breaking up a financial plan into smaller, workable pieces can make it easier to create.
6. Research credible sources. Your personal relationship banker or financial advisor could be the great places to start.
Improving financial literacy can benefit anyone, regardless of age, income or background. It helps people make informed choices, day-to-day and throughout their lives.
Financial literacy is a key contributor to improving financial well-being. However, it must be supported by other complementary factors.
If individuals do become financially educated, they will be more likely to save and to challenge financial service providers to develop products that truly respond to their needs, and that should have positive effects on both investment levels and economic growth. Individuals will be able to choose the right savings or investments for themselves, and avoid being at risk of fraud, if they are financially literate.