by True Tamplin, FinanceStrategists.com
Financial literacy is the knowledge and confidence to make smart financial decisions. It doesn’t just mean balancing a checkbook but also taking advantage of opportunities for your future self such as savings accounts and Roth IRAs that offer tax benefits over traditional checking or savings accounts. Financial literacy can help you get rid of debt and build wealth. Financial education is the key to financial literacy.
Why Is It Important? Financial literacy is about being empowered to make the best possible financial decisions for yourself, your family, and your future. It’s not just about accumulating wealth or earning a high salary—although both are nice benefits of being financially literate. It allows you to take control of money matters without relying on someone else to do it for you. Financial literacy can improve your overall quality of life. It also has the power to change the world for the better.
How to Raise Financial Literacy Levels
You can’t magically impart financial knowledge to someone. Financial literacy isn’t a simple subject. Financial decisions are emotionally laden choices about things people care most about. It’s not enough to tell someone that credit cards are expensive, for example — you have to help them see that the cost is coming out of their future and that the scars from using a credit card will last much longer than the initial thrill or relief of getting something they want. Financial education is about developing skills, not knowledge alone — it’s about helping people to think critically about money choices. Effective financial literacy programs also involve experiential learning. Here are some actionable steps that can give you an opportunity to improve your financial literacy levels:
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