Financial literacy is the knowledge and application of financial principles (budgeting, investing, saving) to improve one’s overall financial life.
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Knowledge is power and along with organizing your finances, knowing how to manage your money is not only a great skill but it will enable you to make sound financial decisions in any situation. Also, you will not have to stress about money leaving you free to live an abundant life.
Here are five practical ways to improve your financial literacy in no particular order:
1. Read books/websites on financial literacy
The first step in improving your financial literacy begins with reading solid books or blogs on personal finance. You can read a physical book or an e-book, either option works. If you prefer to listen to your books, Audiobooksnow is a great resource for e-books that you can check out with lots of personal finance books to choose from.
There is a wealth of knowledge in this space with a variety of personal finance professionals who provide practical information that can help you to educate yourself. They provide great resources that you can use and make the necessary steps to build your financial life. These are some of the best gurus that I recommend:
Tiffany Aliche – The Budgetnista has great tips on improving your financial life.
Ramit Sethi – Ramit runs I Will Teach You to be Rich with lots of great insights.
Erin Lowry – Erin runs Broke Millennial which offers solid tips especially for millennials who are just starting their adult lives.
Clever Girl Finance – Bola Sokunbi is the founder of Clever Girl Finance and is a great personal finance resource.
Annuity.org – Annuity.org is a free online financial resource featured on other prominent financial sites like Forbes and MarketWatch and provides excellent personal finance tips that can improve you finances and build wealth.
2. Listen to Personal Finance Podcasts
If reading is not your thing or you don’t have the time, another way to improve your financial literacy is through listening to Podcasts. They offer a pocket full of information on saving money, creating a budget, investing, and much more. Some of the best podcasts cover the road to financial independence and will take you through a full journey on how to retire early (if that’s your wish). This post covers some of the best personal finance podcasts right now that will get your financial literacy on track.
3. Improve financial literacy with a plan to improve your financial life
While you are becoming financially literate, it is necessary that you start applying the principles to your life. As you learn more, you will start to see the areas of your finances that are going well and the areas that need work.
Also, the best way to ensure that you are on track is to first conduct an audit of your current situation which we covered extensively in this post. After doing this, put together a plan to improve your situation. If you need to pay down debt, have a plan to attack it. If you want to invest, look at your financial situation and plan a strategy to get the ball rolling. These are some examples of ways in which you can start strategizing and become a doer, not just a dreamer.
In the end, you want to move from theory to actuality because financial literacy is not only for the sake of knowledge but becomes very powerful when put into action.
4. Start a Budget
You can be financially literate but if you do not know where your money is going, then you will not be able to know where you need help or where there are gaps. Start a simple budget by listing out all your expenses and your income. Additionally, by having a budget you will get a snapshot of your finances that will help you to figure out how to grow your finances and build wealth.
5. Talk to a Financial Professional
As you learn more, you will find that you will have more questions and possible concerns about your finances. A great place to start is by speaking with a financial professional at a financial institution. It’s very important that you vet this individual and ensure that they are a fiduciary, meaning that they will act in your best interest and put your interest first. They can also assess your financial situation and provide a solid financial plan that can get you on track. These resources are great places to start –OneEleven and Betterment.
By applying these practical steps to improve your financial literacy, you will be preparing yourself to save more money and start your journey to financial abundance. Financial literacy is life-changing and has the power to make you grow in various ways. Knowing how to manage your money will help you to take control of your money and allow you to grow in confidence.
Thanks for reading.
xoxo
