What do I need to have these things? Money. Not everything I want or need can be easily plucked out of a vegetable garden.
There’s no shame in wanting to earn more — it’s not about being materialistic. It’s about being financially comfortable to give yourself the basics, live the lifestyle you want, and be able to do the things that make you feel most alive. Of course, this all starts with being financially knowledgeable. The problem is, not everyone has an equal opportunity in this important life aspect.
According to an S&P report, 65% of adults in developed countries like Norway, Canada, and the United Kingdom are competent in financial literacy. Meanwhile, only 25% of adults in South Asian countries are financially literate. That’s a stark difference.
In the US, only 1 in 4 high school students get access to personal finance classes as published in Next Gen Personal Finance’s (NGPF) latest report. The demand to make finance lessons a part of the curriculum is growing, but schools still have a long way to go. More individuals are now seeing the importance of equipping themselves with financial know-how.
What does it mean to be financially literate?
Financial literacy is about understanding fundamental financial concepts. These include an understanding of interest rates, budgeting, inflation, diversification, and risk management.
When you know the basics, you can make better-informed decisions that can help you achieve and sustain an enjoyable quality of life. You can make sound choices when it comes to saving, investing, and even borrowing money.
It’s all about priorities — will you pay your rent, buy bread, or will you visit an arcade for some fun? No choice is better than the other if you know how to handle your finances.
What is National Financial Awareness Day?
National Financial Awareness Day (August 14) is a day that promotes the importance of financial literacy and also a good nudge to take a look at your own financial status. Sometimes, life doesn’t give you much time to ponder on how you can manage your finances, so this day reminds you to assess how your wealth is working for you.
What is Financial Literacy Month?
Financial Literacy Month happens in April. It’s a great time to examine where you’re currently at with your finances. Here are a few simple things to reflect on:
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- Do I need to increase my income?
- Am I saving enough for the future?
- How can I make my money work for me?
- Am I enjoying life with my current financial status?
- What changes can I make to become more financially independent?
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Why is financial literacy important?
When you have well-rounded financial knowledge, it affects the decisions you make — which job to take, what to spend on, how much to keep for retirement, and how to grow your wealth. It doesn’t matter what your current economic status is because financial knowledge isn’t supposed to be a privilege meant only for a few.
Here are the priceless benefits of financial literacy:
It gives you peace of mind
Emergencies are not something you can ever predict, but you can prepare for them financially so you’re not caught in an impossible situation when they strike. Saving or putting aside money gives you enough cushion to know you won’t be held hostage by any crises.
You won’t be fooled
Investment schemes and compounding interest rates can boggle you if you don’t understand the basic concepts of finance. You might end up paying higher amounts or more fees than you normally should — and you don’t want that! When you beef up your financial planning knowledge, you’re more confident to make solid decisions.
You can choose financial products fit for you
Financial products are growing in number and complexity. There’s an abundance of digital banks, credit card options, brokerages, and savings and investment offers. On top of that, the web is filled with financial advice, and some of it may be false, conflicting, or not right for your situation.
While there’s a lot to comprehend and choose from now more than ever, it’s empowering to not only know your choices, but that you can make informed and wise decisions.
You can make long-term plans
Being financially literate is about knowing the options you have to make your money work for you. It isn’t just about the 9-to-5 or dropping loose change in the piggy bank. When you know how to handle your finances, you give yourself the freedom to carve out a roadmap for your life. Bigger decisions like buying a house or planning a comfortable retirement become easier to aim for.
What are the best books on financial literacy?
Bookworm or not, you’ll find yourself buried in these interesting finance books once you read the first few pages. If you’re more into e-books, they’re available in that format too!
| Principles for Navigating Big Debt Crises By Ray Dalio | The 2008 financial crisis affected millions. Renowned investor Ray Dalio gives you a comprehensive look at how a debt crisis unfolds and the principles on how to approach and handle it better. He explains with clarity how history repeats itself and how by learning from patterns, people can manage them well without plummeting into failure. |
| Central Banking 101 By Joseph Wang | Want to know how the most powerful economic organization in the world works? Pick up this book and you’ll understand the weight the Federal Reserve (The Fed for short) carries. The Fed is the US central banking system and Wang makes hard-to-understand monetary concepts accessible to anyone. |
| The Intelligent Investor By Benjamin Graham | Here’s a timeless book for anyone who’s interested in the principles of value investing. First published in 1949, this masterpiece gives you indispensable stock market strategies that focus on the long-term with minimized risks. This book stays relevant after half a century because Graham approaches investing with research rather than speculation. |
Online Resources
Here are other resources you can explore to expand your knowledge and get the latest news about everything and anything finance.
YouTube Channels
- Principles by Ray Dalio
- The Financial Diet
- WhiteBoard Finance
Websites
- Investopedia
- Lyn Alden Investment Strategy
- Forbes
What are the best online forums for financial literacy?
Being part of a community with the same goal motivates you to expand your knowledge and learn how to be financially healthy. Online, there are forums you can participate in. Be careful with advice from random internet strangers though, not everyone actually knows what they’re talking about!
Personally, I’m a Reddit lurker of topics I’m interested in, including savings and investments. You can start by joining subreddits like r/economics, r/investing, r/personalfinance, and r/financialindependence. You’ll discover interesting principles like FIRE (Financial Independence, Retire Early).
Wall Street Oasis
If you already have intermediate finance knowledge, this popular forum is worth checking out. They tackle topics such as trading, hedge funds, asset management, and even crypto. The cool thing is, they’re more than just a discussion platform. Wall Street Oasis also offers courses and training that can help you launch a finance career.
Mr. Money Mustache
Here’s another active forum with discussion threads full of ripe insight. Dive into conversations about taxes, investing, and other money-growing topics like entrepreneurship and saving. Interesting fact: the site is run by a guy in his 30s — and he’s already retired! He teaches about the balance of frugality and enjoying a leisurely life.
Are there financial literacy myths?
Yes. These are limiting beliefs that hinder you from developing this essential life skill. If you have doubtful thoughts about your capability to handle finances, it’s time to get them out of your system. Here are a few common ones:
- 💰“I have to be a math expert!”
Basic math skills are required but you don’t have to be an algebraic wizard — I know I’m not, and that’s why I use a calculator. Crunching numbers is important, but just as valuable is your capability in managing your money.
- 💸“I don’t have a lot of money to invest.”
No amount is too small to start growing your money. You can always begin with what you can spare and continue adding when you have more to set aside for investing.
- 💰“I need to spend and enjoy my money because we only live once!”
There is truth in that, and no one is stopping you from enjoying your hard-earned income. Of course, remember to do it responsibly and consciously. As they say, save for a rainy day.
- 💸“It’s too complicated.”
We were all clueless once. The only way to begin your financial literacy journey is to take the first step to either learn the basics or continue learning from what you already know.
Can you save money with CyberGhost VPN?
You sure can! This benefit is a cherry on top of our goal to provide you with complete online privacy and security. You can get better deals on flights, hotel rooms, and even car rentals.
- 👎 The Dilemma: Dynamic Pricing
The prices you see when shopping online is sometimes determined by the country you’re in or even where you are in the country — it’s called geo-based pricing. Ever notice airline companies slightly jacking up the prices when you return to their site? It’s likely that they tracked you and figured out your interest…and the chance of paying higher. Sounds unfair, no?
- 👍 The Solution: Anonymity
You can bypass IP-based pricing with CyberGhost VPN. When you connect to a specific country server, we mask your IP address which changes your digital location. That means websites will show you the set prices in that region which may be slightly — or significantly — lower.
We also encrypt your data so no one can trace your online activity. That means you’re always anonymous and websites can’t tell whether or not you’ve been to their site, thereby avoiding the sly ways they try to bring costs up. You can check out actual comparisons here!
Financial literacy is a necessary skill to learn. There’s absolutely no reason to feel intimidated by a subject that’s meant for everyone.
Start Making Your Money Work for You This Financial Awareness Day!
The web has enough resources to hone your finance knowledge, regardless of the level of understanding you have. Once you educate yourself on managing finances, practicing this in your life is both empowering and enriching.
Here’s an idea: why not save on your upcoming trip with cheaper deals? Become a Ghostie today and enjoy lower-priced flights and accommodations!
FAQ
What is financial literacy?
Financial literacy is knowing the key concepts of managing finances so you can make intelligent money decisions that impact your life. It’s essential to understand the basics such as interest, inflation, investments, savings, budgeting, and diversification.
Another important aspect is knowing the tools at your disposal that will help you manage finances efficiently — expense trackers, investment apps, online brokerages, and more.
That said, you should also be careful not to fall for scams that can leave your bank account crippled. There are many fraudulent schemes online and it’s vital that you’re aware of these to avoid being victimized.
Why is financial literacy important?
Financial literacy is important because money is intertwined in your everyday life. Mastering this ability equips you to make sound decisions in managing your wealth that affects both your short-term and long-term goals. You’ll have the confidence to choose the right financial products, plan for your retirement, make money work for you, and enjoy your earnings.
If you like to travel, CyberGhost VPN can help you access your local banking apps securely. That way, you can manage your finances wherever you go!
What are the skills needed for financial literacy?
Financial literacy is a skill in itself — you don’t need specific skills but rather, an open mindset to learn! By doing so, you’ll be adept at managing your money, choosing the right financial products, knowing the risks and benefits, and planning long-term for your wealth.
When you do financial transactions online, make sure to safeguard your banking information.
What are the best books for financial literacy?
Top-rated books for financial literacy are Principles for Navigating Big Debt Crises by Ray Dalio, Central Banking 101 by Joseph Wang and The Intelligent Investor by Benjamin Graham. Books written by investor Warren Buffett are also amazing reads to beef up your finance knowledge.
If you want a glimpse of the financial industry through films based on true stories, check out The Big Short and The Wolf of Wall Street. When you stream these movies online, make sure you’re connected to the fastest VPN on the market!
Can you save money with a VPN?
Yes, you can get cheaper deals online when you use a VPN. Airline and hotel companies have prices that vary depending on where you are.
When you use CyberGhost VPN and connect to a server in another country or region, we change your IP address to one from that location. This allows you to compare prices in different locations and choose the lowest cost in your favor!
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