The need for financial literacy is increasingly becoming necessary. In today’s marketplace, we have many financial services providers – you cannot afford not to be ready with knowledge. Walking around without the requisite information about the marketplace can equate to swimming in the ocean without the necessary equipment. Therefore, it is recommended we embrace financial literacy for a better understanding of the marketplace. It not only grants you a shield but could also be the cure. Follow the adage; ‘prevention is better than cure.’
Below are areas of keen interest:
Financial literacy depends on Habits
Habits weave into every area of our lives – Money included. Our money mindsets demonstrate the effects of the conditioning we undergo between childhood and adulthood, where; we pick up all beliefs about life. Likewise, when it comes to personal finance, our successes and failures are determined by our money habits. Therefore, the foundation of financial wellness rests at the core of our routines and beliefs.
The solution is to adopt a culture of breaking up old habits and installing new ones. Employing financial literacy can help you break down walls of resistance.
Tips: it takes a minimum of 21 days to destroy or install a new habit. I love Robin Sharma’s habit installation protocol: 22 days for destruction, 22 days for installation and 22 days for integration. It helps me come to terms with; lifestyle choices are financial goals. Look into your habits, and examine which ones sabotage your quest to gain mastery over money. Make learning about personal finance a habit.
Planning is Financial Literacy
Whether it’s your business or personal money, creating and following a budget always works. There’s no winging it when it comes to money! A rule of thumb is to know how stuff works – money too. A good plan outlines priorities – that’s why budgets exist. The facts become clear once you embrace financial literacy.
I have come to appreciate the power of words. As I do personal finance coaching, I ask my coachees why budget as a word sounds unpleasant. Out of the responses, I have gathered mental blocks are due to perceptions. I have also found that using different wording and approach improves perception and draws people to financial literacy.
The sense of insufficiency and restriction is perceived to bring forced control – which most people dislike. How about we bid the budget goodbye and adopt planning? A plan appears as a detailed scheme and a method that leads to accomplishment. Can we agree that we do not budget our way to success; however, we plan it?
Perceptions between a budget and a plan
Power up your Interest on Financial Literacy
The power of interest – applies both in borrowing and savings. If you borrow another entity’s money, there’s a price attached to it. On the other hand, if you save with a financial institution, advisable to find out what price they are willing to pay for having your money. This price is what is called interest. You pay interest on loans while you earn interest on savings too.
Exposure to financial literacy empowers your decision-making process. Given that it is not common in our school system, you are encouraged to learn available sources – online and people offering customised coaching.
Learn About the Impact of Debt
Servicing your debt enhances your credit worthiness. A borrower should always pay back what’s due to the lender. Keeping your promise to pay back puts you in the lender’s good book. Failure to which your good name gets in the book of those with a poor credit score! Poor debt management could also cause you to lose your assets and investments. My Money POT Financial Literacy concepts are personalised to fit your personality and style. Book here for a review.
Avoid scams
Anyone with money in their pocket is always a target – the reasons vary. The good news is that you hold the control – those who target you know this too. Being a few steps ahead of those preying on you to their advantage should be on top of your list. Further good news; financial literacy equips you to your advantage.
When pyramid schemes scammers play their music – you choose how to play. When gamblers dangle the carrot – you own the appetite. Identity theft is another risk of the millennium – guard your internet and mobile wallets. Read about: 7 Financial Scams Signs to Avoid
Take Away...
These are just tips – Financiel literacy is fast becoming a core tool of personal financial wellness. Sharpen your know-how and get those good habits going. “Personal Finance is 80% behaviour and only 20% head knowledge” – Dave Ramsey.
