Lacking financial knowledge can result in bad money habits such as saving and investing. In this blog, we will outline what financial literacy is, why it is so important, as well as some tips to actively become more financially literate. How we spend and manage our money is crucial to our financial stability throughout every stage of our lives!
What is Financial Literacy and Why is it So Important?
Financial literacy is the ability to understand and effectively use various financial skills to better personal finance, budgeting, and investing. Essentially, financial literacy is a strong foundation you build on your relationship with money and money habits. This is an ongoing process as you continue to learn through different points in your life. The earlier you start betting on your financial education, the better you will be later in life and when you retire.
Stop waiting to prioritize your finances and start working on better habits to gain knowledge and improve all areas of finance, credit, and debt management to make financially responsible decisions—choices that are integral to our everyday lives. Evaluate your current financial situation, set goals, and learn something to become more financially aware and plan for your retirement.
Ways to Improve Your Financial Literacy
Take this as a push to gain knowledge and financial growth. How can you improve your financial literacy? Here are some ideas:
- Seek financial knowledge
- Subscribe to a financial newsletter
- Listen to financial podcasts
- Join a financial club (investments, money management, money, financial literacy, etc.)
- Read a personal finance book or blog
- Speak with a financial advisor
- Use social media to learn – join a finance group
- Make financial money moves (re-work your budget, open a savings account, open an investment account, put your money towards retirement, start an emergency fund, increase your retirement contribution)
- Consolidate high-interest debt
- Make small changes in your spending habits; acknowledge bad habits and set goals to change them
How To Become Financially Aware of Retirement Planning
Money moves you make now will affect you later in life. Ultimately, saving for your retirement is securing your financial stability later in life. Here are the top tips to incorporate into your financial habits now to best save for your retirement:
- Focus on starting ASAP if you haven’t already
- Contribute to your 401(k) routinely
- Open an IRA account
- If you are 50 or older, take advantage of catch-up contributions
- Create a spreadsheet to see where you are at and what you need to do to reach your retirement savings goal
- Rein in your spending
- Automate your savings
If you are looking to make good financial decisions and better your financial literacy, now is the perfect time to get started. Building a solid financial future is extremely important for where you are currently at in life and when you reach retirement. Take this time to reflect on your finances and educate yourself to make smart financial decisions and money moves – you will be extremely glad you did.
Peoples Bank & Trust Co.
Member FDIC
Equal Housing Lender