Financial literacy is the ability to understand and employ a variety of financial principles such as personal finance management, investing, and budgeting. Having a strong understanding of the basics can help you reach life’s most important goals like buying a home, retirement, education, or opening a business. So let’s look at five ways to create more responsible financial habits.
1. Commit to change
One of the most overlooked parts of financial literacy, but easily the most important. Setting your financial priorities helps improve your money habits. A lot of people don’t realize that they could fund the things they want most in life- if they decided to prioritize them.
2. Live below your means
Living below your means is a great way to be in control of your money. Being able to do this ensures you have the ability to handle whatever financial obstacles life throws at you. A great way to live below your means is through the use of a budget. Don’t know where to start? The 50/30/20 rule is a good place to start for first-time budgeters.
3. Save for tomorrow
Saving for tomorrow can mean many different things. Investing for retirement, creating an emergency fund, and saving for planned expenses in advance are all great ways to prepare for the future. Saving is a crucial aspect of achieving a financially successful future.
4. Kick debt to the curb
Getting out of debt as quickly as possible is one of the most impactful things you can do on your journey towards achieving financial literacy. Creating a plan to pay down your debt is the key to gaining control over your situation. Avoid taking on debt in the first place if you can.
5. Protect yourself
Don’t forget to protect the assets you currently own. Whether it’s healthcare or homeowners insurance, protect yourself in case of a bad event. It only takes one trip to the hospital or an auto accident to put your financial future in jeopardy. Make sure you have insurance – your future self will thank you. Take these tips one step further with our new online Financial Literacy course! In this program you’ll learn ways to handle everyday financial events, so grab a cup of coffee and get ready to learn!