If you are just now getting serious about taking charge of your personal finance, then you need to become financially literate. What is financial literacy? It’s simply having a greater understanding of how you can control your personal finances. It’s almost like an education in finances that you tailor to your own specific situation.
What you get with this literacy is a way to plan better and not have to rely on others to think of your best interests. You are more in control of your own destiny the more you understand yourself. It can also save you thousands of dollars in fees when you are capable of looking after your own money.
It is not difficult to become financially literate, but you do need a basic guide. In this article, I will go over some of the things you can do to do this on your own.
What does financial literacy look like?
There are a few essentials that come with financial literacy. These are the core ideals that you need to have when you start on your education about your finances.
At the most basic level, your financial literacy will start with budgeting and setting goals for yourself. This means that you have a plan for your money both in the short term when it comes to your spending and the long term when it comes to what you want to happen with your money.
Next, you’ll have to then stick to the budget that you’ve created to be able to actually save money. If you are not saving yet then you are not nearly financially literate enough at this point and you are doing the right thing to find out how to get there. If you are not yet at retirement age and you’re asking yourself how much money do I need to retire then this is very important to get right as soon as possible.
Lastly, when you have everything else nailed down then you will be learning about investing and the various types you can do. There is no one size fits all approach to investing so you’ll need to explore your options to find the right fit for your personality and your needs.
Take a course
Though there are a lot of resources out there that we will also go over like apps and books, a class is one of the best ways to get started. There are a few benefits that you get out of taking a class that you won’t get from other means.
For starters, you don’t know what you don’t know which makes it hard to know where to start when you are looking for information online or an app. So, with a class for beginners you can start at the beginning and work your way forward.
Another thing that comes with a class is having access to an instructor that can answer all of your questions in real time. You don’t get that with an app or a book. When you are missing something they can help you understand. And when you have a specific issue then you can ask and get a specific answer for your situation. Again, with an app that isn’t really possible.
Sometimes these courses are offered for free by your town or city, particularly if you are a senior citizen.
Join a Facebook group
A close second to taking classes is joining a Facebook group dedicated to people that are trying to get their financial house in order. This is a good way to connect with others that have some expertise or at least have been in your shoes. Then you can ask questions in the groups and get answers right away from qualified people.
The moderators of the groups usually post helpful information like articles, or even do live streams in which they talk about a certain subject. In those streams there is usually a question and answer period at the end when you can ask questions and get help for your specific problem.
Use some apps
Once you have some education behind you and know a bit about what your needs are, you can try using some apps. There are a lot of different types that range from robo advisors that will do investing for you to simple budgeting apps.
These are all tools that can help you streamline the way you handle your finances that also makes it much easier to do yourself. In fact, not only will these tools make you more proficient, they can also be fun. Since they are not dry accounting ledgers like you would have needed in the past, you can actually enjoy using them which means that you get more out of them.
Listen to podcasts
If you are stuck in a long commute everyday then you can use this time to your advantage. Listen to some podcasts that talk about personal finance and see how much you can learn that way. You’ll get a lot of useful tips and tricks that can definitely help you get more financially literate.
Look for podcasts that are hosted by people with a solid background in economics or finance so you know they understand what they are talking about. They should also have guests that specialize in a specific area that also have the right credentials so you can trust the information they are giving out.
Understand that not everything that you get out of these podcasts are going to apply to your situation as they are going to speak about generalities. However, you should be able to at least gain some knowledge about how things work and even get some background in the terminology so you can understand what you read from other sources.
Don’t be overwhelmed by how much information is out there. Just try to zero in on eht things that you know apply to you and then dive deeper into those areas. When you have a solid grasp of things then move onto more complex matters. In any case, you’ll be ready for your retirement the more that you educate yourself on.