Financial literacy is an underrated yet essential thing that we all need to know. With this, we can guarantee ourselves the best and most comfortable living situation for a lifetime. However, since not all of us have the opportunity to study and be fully aware of it, a lack of knowledge is expected. Good thing. We are looking forward to educating more people about financial literacy. Given that, here are the following things to know about financial literacy.
The main purpose of financial literacy is to unlock every door for us to gain financial success. For the benefit, it aims to empower every single one of us to produce only smart financial decisions. It also provides adequate knowledge and skills for us to manage our finances effectively, such as saving, borrowing, budgeting, and investing. Thus, financial literacy transforms us to become fully equipped individuals who can reach financial stability and goals.
Moreover, here are the things expected from having an effective and adequate financial literacy.
- Retirement Savings
Having retirement savings as a result of financial literacy is a great thing. This form of saving will help us during our later years in life wherein we are unemployed. Also, as the maximum age of employment in our country is around 60 years old, preparing enough funds for it is a must, and that can be done through the help of owning retirement savings. Another thing, retirement savings allow us to enjoy our later years. During this time, we can travel as much as we want, tolerate our wants, and live the best life without relying upon our children. Besides these, several retired individuals are also known to have spent their savings on alternative careers they wanted to have in the first place. For example, many people often opt for a writing career as they retire from their day jobs. They usually use their retirement savings to make their books a huge success. Generally, they hire proofreaders, ny book editors, cover designers, and publishers for that. This not only helps the retirees to pass their time but also monetizes their art. That said, from all the examples mentioned above, it could be understood that retirement savings are a must.
- Home Purchase
Next, another thing expected from having financial literacy is a home purchase. If we are already tired of house rentals and sleeping at a place we can’t claim ours, then purchasing our home with our financial literacy can be a huge help. Here, we can apply house loans, saving, and budgeting under financial literacy to enable ourselves to buy a dream house. The great thing here is that we aren’t going to rely upon other people, as well as there’s no need for decade-long sacrifices, as long as we are financially smart enough.
- Selecting Insurance
Following that is selecting insurance. Some of us, according to the data, have been unaware and do not have any access to insurance that can save our lives. As much as we know, insurances refer to the sort of plan from our banks that allows us to have funds whenever emergencies happen For example in the case of home insurance, major home damage that might require the need for Water and Mold Remediation Services or a roofing contractor may be covered and paid for by your insurance company. Included here are urgent hospitalization, debts’ payment, urgent need of cash, and so many more.
Next, we have here investments which are a well-known source of passive income. Investing comes from effective financial literacy, and once we have settled with this kind of income source, then we can assure ourselves that we can achieve a peaceful and comfortable living. Also, investments come in different types such as property investments, business, franchising, trade and stocks, and more. The only aim of this is to allow us to produce more income by using our funds and letting it grow in different finance platforms we choose to use. Who knows, this might even lead you to getting into the wholesale mortgage lender list wherein you could provide finance to mortgage brokers themselves! This might take a substantial amount of time for one to achieve – but as they say, nothing is impossible! Financial literacy, particularly in terms of investing though, does not happen overnight. To have a better grasp of how to handle your funds and build them for the future, you may have to watch videos and read books or blogs about money management for Canadians or anyone for that matter.
- Debt Management
Following that is debt management. If we have proper financial literacy, then we can have effective debt management. Included here are the strategies, rules, and goals we use as inspiration to become debt-free. Also, debt management teaches us to allocate our funds properly. Here, we can start with the top priorities going down to the least. After all, the main aim of this is to make us free from any debt.
- Saving for College
Lastly, financial literacy can teach us how to save for college. If we are still in high school and want to secure our college funds, such as the tuition fee, uniform, miscellaneous, and others expenses, then saving can help us out. Still, this requires adequate financial literacy for us to manage everything we need to fund college costs properly. Here, we can make it to the realization of borrowing funds from the bank, and doing business in the meantime.
So, financial literacy must be possessed by everyone to live a comfortable life.