Developing Financial Literacy: A Habit Worth Cultivating
You're not powerless when it comes to your finances. Financial literacy is the key to living an empowered and fulfilling life.
If one desires greater financial success, getting a handle on money management starts with being able to make informed decisions about how you spend and save your money.
Financial literacy may be the missing ingredient you need for greater financial success in life. The habit of developing financial literacy is well worth cultivating in one's daily life.
Developing financial literacy is an essential step for success in any endeavor. It is a skill you can apply to every area of your life. Having this habit will help you reach your goals and expand the possibilities for your future.
Achieving financial literacy is a result of developing a range of skills in handling money. The habit of financial literacy enables people to make informed decisions about their finances, maximize their wealth, and achieve greater levels of prosperity. In order to cultivate this habit, it takes time, effort and commitment to learn different areas of money management.
The first step in developing financial literacy is to educate yourself on what it means and how it works in your life. Take the time to learn about what finances are and how they work.
The next step is understanding where your money is going. This applies to all areas of your life. You need to know where you can cut back on expenses and where you can track your spending. For instance, knowing how to pay off debt quickly will free up several hundred dollars a month in savings that can be put toward other expenses or be used for investing in the future.
When you have an idea of what spending habits work for you and which ones do not, it will be easier to adjust those behaviors accordingly. In order to develop this habit, it takes commitment and persistence. It takes time to become financially literate.
Financial literacy is a learned behavior that applies to all areas of one's life. The key to developing this habit is discipline and planning. Setting priorities is the first step to achieving financial literacy. You need to set money goals, track spending and take action on your finances based on those goals.
Once you have developed this necessary skill, it will benefit every aspect of your life. Financial literacy will help you plan for the future, set a budget for your bills and expenses and set aside savings for emergencies or retirement. This habit will also help you improve how you manage your relationships in every area of your life as well as contribute positively toward how others view you in the community and at work.
Developing a habit of financial literacy is the key to making a positive difference in your life and creating an environment of greater prosperity. It is time to take action. Developing this habit takes time and commitment, but the rewards will be worth it.
© 2010 Mr. Dean A. Delfor, MBA, CFP, MST, CIMA Alumnae (Class of '87)
- "I think part of developing financial literacy is understanding that you can't expect people to suddenly become financially literate overnight." - "Commenting on Financial Literacy: An international perspective", by Nicolas Charles & Miriam Littman (March 2014), http://www2.warwick.ac.uk/fac/soc/economics/staff/nicolas.charles/PDFs/Charles_Littman_2014.pdf
People with either high or low financial literacy are much more likely to attempt or complete suicide, according to a new study by Washington University School of Medicine in St. Louis.
- "Are You High Or Low On Financial Literacy? It May Make A Difference In How Likely You Are To Commit Suicide", http://www.businessinsider.com/are-you-high-or-low-on-financial-literacy--2014-3#ixzz36k4xTiaJ
New research shows that financial education plays a key role in increasing both financial literacy and health.
This is the first study to examine the effect of HEDGE, a course for students taking a college level finance course designed by instructors from Duke University. The courses were compared to no instruction group in their effect on future financial decisions.
After taking the class for three years, participants' ability to effectively save for retirement increased significantly and their desire to hold higher level positions also increased. They also reported greater satisfaction with their savings and lower levels of debt than after no instruction.
- "Financial Education and Health", http://www.learnvest.com/news/1015/financial-education-and-health
Financial literacy is increasingly recognized as a useful skill for a person to obtain. The ability to manage one's finances in order to achieve financial independence is becoming an important factor for job satisfaction, financial security, etc. This book by Alpenrose Publishing will provide detailed information on the subject of financial literacy, including how it should be taught in schools and what role the private sector should play in this area.
- "Financial Literacy: A Step-by-Step Guide for Individuals and Institutions" (Paperback), by Alpenrose Publishing, Inc. (April 1, 2009), http://www.amazon.com/Financial-Literacy-Step-Institutions/dp/0973696119
The most widely cited international survey of adult financial literacy shows that the US ranks 13th out of 17 countries surveyed, far behind leading countries like Canada and Australia. The US scores particularly poorly on questions about inflation and risk diversification. It is also noteworthy that there is a great deal of variation in levels of financial literacy across ethnic groups in the US; a striking finding given that the survey population was non-Hispanic whites only.
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