What is financial literacy?
Need to choose a mortgage, set up a pension, or take out a loan? If you have the knowledge and skills financial literacy gives you, then none of these things should pose a problem for you. In short, financial literacy enables you to make the right financial decisions throughout your life. When you’re financially literate, you’ll have a better relationship with money - but it's a journey of learning that never stops.
Every day thousands of WorldRemit customers make the right financial decision to send money to their loved ones with us. They use their financial literacy to choose a money transfer service that’s fast, secure and low cost. We’d like everyone to have this financial literacy, and so we’ve put together this article to explore the subject. We’ll look at everything: from what financial literacy is to how you can improve yours. We hope you find it useful.
Table of contents
WorldRemit Content Team
• 4 mins read • Updated
Why is financial literacy important?
Financial literacy is so important in helping you to manage almost every aspect of your financial life, from day-to-day expenses to long-term retirement plans. Being financially literate will help you to avoid debt that can lead to bankruptcy, default and foreclosures.
Many people are unprepared for the day they retire and no longer earn money to support themselves. Others lack an emergency fund that would cover three months’ expenses should they lose their jobs. It has been said that many of us are only two and half paychecks away from homelessness. And many millennials live in a world of debt with student loans and high mortgage payments.
And while all these may seem like individual problems, they do have a wider effect on society. The financial crisis of 2008 is a prime example - there was a huge financial impact on the entire economy that arose from a lack of understanding of mortgage products and vulnerability to predatory lending. So, financial literacy is an issue that has broad implications for everyone’s economic health.
Advantages of financial literacy
Nobody wants to have money worries. And there are many advantages that come with being financially literate. It helps you manage your money more effectively, so that you’ll be able to:
save more money - either for that rainy day or for the nice things in life, like holidays and meals out.
invest your money wisely, so that in time you see good returns.
feel more confident about your finances, which gives you overall peace of mind.
build stability for yourself and your family, who may be dependent on you.
have a sense of control over your finances. You’ll know where your money is going, and what you need to do to achieve financial well-being.
How to improve your financial literacy
Improving your financial literacy can be a lifelong exercise, but one that’s so important to do. It will ensure your economic well-being as you make important financial decisions over the years. Here are some tips on how to improve your financial literacy.
Listen to podcasts on finance
There are some great financial podcasts available such as Money Box,’ ‘In Her Financial Shoes,’ Maven Money Personal Finance Podcast, and others. The great thing is that you can listen to them while doing other things. Absorb money management tips without effort, while waiting for a bus or taking a morning walk.
Read books on finance
Books are an excellent source to help you improve your financial literacy. You can read personal finance books written by experts like: Robert Kiyosaki, Martin Lewis, Tony Robbins, to name a few. They have a collection of financial books on different topics to help readers understand how to manage money.
Learn with friends at college classes
Why not sign up for in-person finance classes? Go with a friend, and the two of you can discuss all that you’ve learned afterwards. Many community colleges and universities provide personal finance classes, and you can earn college credit.
Subscribe to financial magazines or newsletters
It’s well worth subscribing to financial newsletters and magazines, and receiving free financial news from trusted sources in your mailbox. You’ll get valuable insights throughout the financial journey and expert advice on finances and lifestyle.
What is Financial Literacy Month?
Financial Literacy Month is an annual event that seeks to educate and inform people on their financial principles and practices. In the US and UK it’s held in April; and in Canada in November. Events are held to help you assess your financial knowledge and consider tips and tricks to help manage your money more effectively. A study by the Financial Industry Regulatory Authority (FINRA) estimated that only 34% of individuals in the U.S. have a sufficient understanding of financial literacy, meaning that this month-long event is an essential learning opportunity for people of all ages.
Learn about finance from WorldRemit
At WorldRemit we’re all about helping our customers understand different financial topics, so they can make the most of their money. That’s why we’ve put together this very interesting and useful list of articles for you.
And, of course, if you need to send money abroad to family and friends, then one of the most financially literate things you can do is send with WorldRemit. Our low fees will save you money, and our service is fast and reliable – plus, it’s trusted by 5 million users (and counting).
So, why not sign up to WorldRemit, and make a money transfer today?
The contents of this blog post does not constitute legal or financial advice and is provided for general information purposes only. If you require specific legal and / or financial advice you should contact a specialist lawyer or financial advisor. Information true at time of publishing.
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