Why You Should Increase Your Financial Literacy

Many view financial literacy as something meant for those working on Wall Street or spending their days buying and selling stocks. However, financial literacy is healthy for everyone. Those who want to learn more often thrive. Those who think finances are for the elite often struggle, or plateau financially.

Where Do Finances Affect Us?

Let’s start with budgeting. Budgeting is vital for all who look to control their financial well-being. We have many resources on budgeting, including our starter budget for those who are just looking to set their first budget. Budgeting is all about taking control of the money that comes in every week or month, and assuring yourself that it will be spent wisely. Those who budget often have money left over after they pay their bills, and can even set away money for savings and investing.

After you start a budget, you will find the areas in your life where you are wasting money, and the areas in your life where you are not putting your money to work. Imagine you are spending $250 a month on items that you do not need at the moment (or cannot afford). Reallocating that money to pay off debt and then investing can cause your savings to grow exponentially. A simple budget/reallocation of spending can help you retire years earlier than you would hope for.

Having financial literacy is more about living a life of healthy spending, it’s also about living a life that is stress-free from debt and fear of going broke. Many people feel stuck in their jobs because they feel stuck. Dreams go out the window for the paycheck. People feel as though they can’t risk the job of their dreams because the job they have now is keeping them afloat. A strong budget and a shift in spending habits give you the freedom to work towards the job of your dreams. A strong budget gives people the freedom to know their bills will be paid on time. Emergencies happen. Those with a strong budget often handle them better than those without.

How to Differentiate from the Cultural Norms

Many people today, especially millennials, are talking about their side hustles. Side hustles generally consist of ways to make money outside of your normal career, but still cost valuable time. While a side hustle can be a great thing (and potentially can help lead to a better career and financial freedom), the extra money is often spent frivolously. Instead of spending several hours a week adding to your workload, find ways to educate yourself on how to spend your income better.

You may find that investing in your 401(k) can not only save for your future but also help you with taxes next year! You may also find that when you learn to budget well you spend your money on things that make your life better. Maybe you don’t worry about changing your career or retiring early. Maybe you want to give to charity or volunteer more. A quality budget can afford you the time and resources to do so.

What Do I Do Now?

It’s time to start making changes. Take a few days and start your budget. Educate yourself regularly on finances and even expand your knowledge of the stock market! Expanding your financial knowledge will lead you to financial freedom and a happier life.