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How To Improve Your Financial Literacy

Updated: Nov 25, 2023

First of all, what is financial literacy?

Simply put, financial literacy is the ability to understand financial concepts and use the knowledge you gain to make informed decisions about earning and managing money to improve your life's quality. Financial literacy isn’t always taught in schools, so we have to maneuver as students of the game of life and take control by educating ourselves on personal finance.

How can I improve my financial literacy?

1. Create and follow a budget

One of the first major steps when taking control of your money is looking at your income vs expenses and creating a budget. A budget is a necessary tool to help you understand where your money goes every month. If you don’t know how much money is coming in and going out, it can be easy to say “FoRgeT sAviNg MoNeY” if you mismanage most of the money you earn.

To stay on track, you’ll need to make your budget both accurate and easy to follow. To prevent budget burnout, make sure that your budget is flexible but also restrictive enough that you don’t have to live paycheck to paycheck. If you’re creating a budget for the first time, try the 50/30/20 budget.

Basically, this kind of budget commits half of your income to your needs or essential purchases, 30% to wants or non-essential purchases, and 20% to your future or savings.

There are plenty of tools available to assist you with budgeting like personal finance apps. A lot of these apps are made to help you track your income, expenses, and net worth. When you input your info such as banking, income, expenses & budgeting goals into a money management app, you should start to see your financial choices and habits more clearly.