Wondering the best gift to offer this 21st century? I suggest financial literacy. It is one of the best lessons one can learn as well as offer to someone else.
Being financially prudent in your daily decisions goes a long way in preventing individuals, organisations and nations from making avoidable financial mistakes that can have negative consequences on their financial wellbeing and bring regrets in the long run.
This is why programmes geared towards promoting and educating people on finance management is organised by GoDo Hub, a Creative Space Startup initiative to raise interest in the proper management of one’s finance – which has become the main focus of many state-run programs in most countries of Africa; hence, drastically minimising uncoordinated financial engagement.
Properly understanding the basic financial concepts enables one to swiftly and knowledgeably navigate financial systems at any given point.
What is financial literacy?
Financial literacy is the ability of an individual to possess skills that guide one into making informed and effective decisions in relation to their financial resources. It also has to do with being skillful in financial principles such as budgeting, forecasting, compound interest, financial planning, debt management, profitable savings techniques, and wealth management.
Due to the increasing involvement of tech in financial activities, it is now very easy to make uncontrolled financial expenses; so financial illiterates misuse funds.
Research by the Financial Industry Regulatory Authority reveals that 63 per cent of Americans have been observed to be financially illiterate. This is to say that they lack the basic skills with which to reconcile their bank accounts, pay their bills on time, pay off debt and plan for the future.
So also are many Nigerians, who, due to lack of financial literacy, miss credible opportunities meant to improve their well-being.
One truth about being financially literate is that it helps one to easily achieve financial stability, as it helps to protect one from being affected or associated with issues such as financial fraud.
To achieve financial stability, here are ways to improve your financial literacy skills
Have a budget
Having a budget will help to track and control your expenses. This is because your budget list will include your most essential needs and how much each costs. This will help you to know when you start overspending or making unnecessary expenses.
Plan for savings
Saving first comes with a decision. Once one makes the decision of saving, it starts with having a savings goal and making sure that one has attended to their savings before embarking on any other form of expenses.
Quickly pay bills
Try as much as possible to pay bills as and when due. This will help to reduce your debt rate and therefore lead to more savings.
Invest
Investing in a productive business is one of the ways to be financially stable. This is because you earn a percentage from the business profit that you invest in without partaking in the risks.
Reach out to professional investors to get proper guidance on the type of businesses or organisations to invest in.
In conclusion, financial literacy is a skill that everyone needs to acquire to help reduce the issues of fund mismanagement that we experience today at different levels.
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