Financial literacy encompasses the knowledge and skills required to make wise financial decisions, empowering individuals to effectively oversee and enhance their financial resources. With financial acumen, one can allocate their income towards multiple objectives concurrently, rather than solely covering ongoing expenses that may lead to a sense of financial strain.
Being financially savvy enables you to establish savings, reduce debt, and establish an emergency fund. It also equips you with the valuable capability to navigate the financial landscape with confidence, providing you with the tools needed to thoroughly research matters such as loans, credit cards, and investment prospects.
According to MyMoney.com, optimizing your financial well-being begins with embracing five foundational principles for managing and growing your financial assets. It is advisable to keep these principles at the forefront of your mind as you make everyday decisions and plan for your financial objectives.
EARN – Make the most of what you earn by understanding your pay and benefits.
SAVE & INVEST - It’s never too early to start saving for future goals such as a house or retirement, even by saving small amounts.
PROTECT – Taking precautions about your financial situation, accumulate emergency savings, and have the right insurance.
SPEND – Be sure you are getting a good value, especially with big purchases, by shopping around and comparing prices and products.
BORROW – Borrowing money can enable some essential purchases and builds credit, but interest costs can be expenses. And, if you borrow too much, you will have a large debt to be repaid.