Financial literacy is having the knowledge to effectively manage and save money. This subject covers everything from budgeting to investing, and more. Indeed, the idea of improving financial literacy can be intimidating. However, this crucial set of life skills isn’t broadly taught in schools. As a result, many Americans find themselves having to take the initiative to figure it out for themselves. Anyone interested in getting started can read on to find five tips that will help.
5. Follow the experts
Those who are just getting started down the path towards getting out of debt, saving for retirement, and otherwise putting their financial lives on the right track rarely want to spend money on hiring a financial advisor. Thankfully, many experts offer valuable resources for free, or nearly free.
Start by reading the financial sections of local newspapers and following a few blogs, then practice budgeting tips and other advice offered by financial experts. Choose a few resources for learning the basics, then continue to build on that basic knowledge base.
4. Use social media
For many, social media sites like Facebook and Twitter act as distractions from their responsibilities, but they don’t have to. Social media platforms also harbor a wealth of resources for those willing to learn. Find financial experts to follow on LinkedIn, join a Facebook group for people learning financial literacy, and look for ways to incorporate learning into daily life.
3. Get serious
After getting a broad overview of how financial management works by reviewing expert advice, it’s time to get personal. By considering their current financial situations, people can get an idea of where they stand and what it will take to accomplish long-term goals.
Now is not the time to be vague. Start by writing down the exact amount of your assets and liabilities including savings accounts, and calculate your net worth. Then, start paying more attention to monthly bills. All of this information can be used to come up with a realistic budget while simultaneously allowing people learning about financial literacy to put their new skills to work.
2. Stick to a budget
All of the expert advice and studying in the world isn’t going to help if people don’t put it to good use. Keeping a monthly budget is a great way for self-taught students to take general ideas and implement them in their personal lives. Start by tracking both spending and income using a spreadsheet or a financial management tool, and stick with it. Keeping track of 100% of expenses and income can be tough at first but it will quickly become a habit, and it’s one that will pay off in the long run.
1. Stop procrastinating
Just about everyone wants to improve financial literacy, but just wanting to do something isn’t enough. The first thing procrastinators need to change is their attitudes. Putting off learning about finances, not taking stock of net worth, or waiting to come up with a budget until tomorrow only means wasting one more day before getting on track. Those days add up, so start getting organized now, and all that hard work will pay off in the future.
Sorting out how to get out of debt, starting to save for retirement, or budgeting for major purchases can be hard, especially for those who lack formal guidance. Knowledge is power, though, and the hardest part is getting started. Once people start accumulating knowledge, they’ll find that it gets easier and easier over time.