In honor of National Financial Literacy month, I decided to revise this list of things that you can do become financially literate. It is never too early or too late to become financially literate. NOW is the time to take control of your finances and put yourself on the road to financial security and freedom. Being financially literate allows you to earn more, spend less and obtain the things you really want.
Financial literacy is just another way to say you are financially fit. When you are financially fit, you are able to make informed choices about your finances, and you understand how those choices will impact your wallet and your life. Financially literate people plan for their future and can manage financial surprises, because they have trained for these situations by saving and planning. To enjoy the benefits of financial literacy, you have to train. You must obtain, information, knowledge and skills and apply them in order to make good choices in how you treat your money.
Do you ever think about how you treat your money? Do you save it, or spend it all the dame day you get it? Do you pay all of your bills first and hope that you have enough left over for your basic needs? No matter what you answered to these questions or what your relationship is with money, or what your level of financial literacy is, you can start right now to improve your financial situation and become more financially literate. Here are 10 things you can do to become more financially literate.
Become familiar with your household finances.
Know exactly how much money you have coming in and exactly how much you have going out. Review your online bank statements daily or weekly. Make sure to have a paper copy of that bank statement as well. Find out how much of your money goes in the bank and for what, other than your normal monthly bills, it comes out. Go through your monthly bills so you know exactly whom you pay each month for what and how much.
Set a financial goal
A while back, I wrote a post on setting financial goals. If you missed it, you can review it here. Setting a financial goal or goals, makes being financially responsible much easier. Decide on what your goal or goals may be and make sure that it is something that you want that you have to save for.
Develop a budget and stick to it
I cannot stress this enough. Once you know how much is coming in and going out and you have a financial goal, you will need to develop a budget that you can stick with.
Watch television programs offering financial advice
Read newspapers and magazines
Use government resources
Uncle Sam, is making a marked effort to see that U.S. citizens have ample opportunities to learn about personal finance. Check out these websites for more information on financial literacy. http://promotions.usa.gov/newyear.html, here you can order up to 5 packets to start managing your finances like a pro. Financial literacy and education commission is affiliated with the U.S. Treasury Department, and its mission is to improve financial literacy by coordinating efforts between the public and the private sector.MyMoney.gov is a website dedicated to teaching the basics about financial education. You can find assistance with things, such as, balancing a check book, investing in a 401(k), or purchasing a home.
Set up a wealth building system
Once you have set your financial goals, transfer money to accounts to automatically begin saving for those goals.
Purchase Financial Tools
Buy a financial calculator from HP, Texas Instruments, Sharp, Casio, or Canon. A financial calculator performs functions such as calculating loan payments, interest rates, percentages, amortization schedules, and cash flow. They also solve time-value-of-money calculations such as annuities, mortgages, leases, and savings.
Invest in a financial dictionary, such as:
- Dictionary of Finance and Investment Terms (Barron’s Financial Guides)
- Standard & Poor’s Dictionary of Financial Terms
- Webster’s New World Finance and Investment Dictionary
- Wall Street Lingo: Thousands of Investment Terms Explained Simply
Help Your Children learn
Open a savings account and teach your kids how to save. Starting to learn about money management when young is key to improving financial literacy as an adult. Organizations likeJump $tart Coalition for Personal Financial Literacy, a national coalition of organizations, tries to improve the financial literacy of K-12 and college students through advocacy, research, standards, and educational resources.
It is never too late to improve your knowledge about financial matters. Increase your knowledge about investing, estate planning, social security, how credit cards work, credit scores, saving for the future, social security, real estate, insurance, retirement, and taxes. Tackle one topic at a time. Start with the one you are most interested in learning and begin to build a solid foundation of financial know-how.
Becoming financially literate does not happen overnight, nor is it accomplished by reading just one book. It happens through education, practical experience, and life lessons.