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What is Financial Literacy?

Financial literacy is what separates a wealthy person from a poor person. Statistics say that if a financially literate person does not have money, he will soon have it. And vice versa, if an economically illiterate person has money, he will surely lose it soon! Read on to why this is happening and how to improve your financial literacy.

Modern research shows that financially literate people are more efficient and successful in life, regardless of which country, position, and area they work. Therefore, wealth, together with knowledge, has been passed down for centuries from generation to generation. During the Soviet Union, there was also no need to teach ordinary people financial literacy. Salaries and pensions were set and guaranteed by the state, there were no risks of losing income, and you could count the number of financial instruments legally available to the people on the one hand. However, along with the arrival of a market economy in Russia, it became necessary to understand economic processes by every market participant, every person.

  1. Read unique books on the basics and principles of financial literacy

Read some books, especially on the basics of the economic study of stock markets. It is essential to have basic information, or anyone can play with your money without your knowledge LastPass – Family or Org Password Vault

  1. Read feature articles

 Many financial advisors, including yours, indeed, maintain their blogs, in which they share “secret knowledge” about personal finance with a wide range of readers. Here, you can familiarize yourself with published articles in my blog and subscribe to receive new pieces by e-mail. Increasing financial literacy is good because it does not take your time. Finding 5-10 minutes during the day to study one article will not be difficult, even for the busiest people.

  1. Play financial literacy games

 Among investment simulators, the service allows you to hone your investing and speculation skills on accurate historical charts of American stocks and compare your trading results with a passive buy-and-hold investment strategy.

Games allow you to test various assumptions and strategies in practice. At the same time, you can observe the result of your actions almost immediately, and mistakes and failures do not affect your financial well-being. Therefore, developing financial literacy through games is a relatively effective and enjoyable way of teaching financial literacy that is suitable for adults and children. ADP. Payroll – HR – Benefits

  1. Attend financial literacy workshops, webinars, and courses

In this case, you are required to pay attention to which institution or company is conducting financial literacy courses. For example, seminars with a similar name from some brokerage companies and banks have the real purpose of attracting you as a client and selling you their specific products, so they should be treated with some caution. However, financial literacy courses organized by universities and independent financial advisors can be beneficial, especially if you don’t just listen to them but start applying tips and advice in your daily life.

  1. Develop the proper financial habits

Developing just four good financial habits may be enough for many people to improve their financial situation. These four good habits are:

  • Avoid debt and loans – live within your means
  • Start keeping track of income and expenses. Plan your costs a month in advance.
  • Always save and invest at least 10% of the earned immediately after earning income. And from the remaining money, pay for your usual expenses, starting with the most important ones.
  • Be sure to ask your financial advisor before investing in any project or investment vehicle. Download A Free Financial Toolkit

What Skills Does a Financially Literate Person Have?

  1. Maintains a balance between consumption and investment

Living well today and saving and investing enough money to ensure a liveable future is not an easy task. If you do not save anything for the future, then a miserable beggarly pension from the state awaits you. If you save and invest to the maximum and now live from hand to mouth, there is a risk of not living to see that “bright future.” Therefore, it is essential to maintain a “golden mean” that will allow you to live comfortably now and not worse in the future.

  1. Manages personal finances effectively, planning income and expenses in advance

It is essential to plan expenses for the next month and analyze and compare the plan with the facts for the past period. Thirty minutes a month devoted to planning and analyzing your budget allows you to find holes in the budget, determine where exactly money is flowing, and make the right decisions to increase the amount of money in your wallet.

  1. Sets clear financial goals and successfully achieves them

We do not like to dream about an expensive sports car, a house on the seashore, a yacht, or financial independence. The goal differs from the dream because it has specific deadlines for implementation, cost, priority, and many other parameters. CorpNet. Start A New Business Now About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Complete Controller. America’s Bookkeeping Experts