Happy Financial Literacy Month! You may have heard or come across the term financial literacy as you’ve learned how to navigate finance and make monetary decisions. But, what does Financial Literacy really mean? In its simplest form, financial literacy is the understanding of financial topics relating to personal finance, protection, borrowing, and investing. You know you’ve mastered financial literacy when you’re confident in making informed decisions about money!
Here are the five key principles of financial literacy determined by the Federal Financial Literacy and Education Commission. Having a thorough knowledge of these concepts provides to base to make sound financial decisions that lead to a secure financial future.
Earnings. It’s essential to have a detailed understanding of your entire compensation package. This includes your pay, as well as an annual bonus, health insurance, vacation days, and any other benefits that may factor into compensation.
Spending wisely and budgeting. A sound understanding of how to budget is the foundation for achieving your financial goals. Funding retirement, college tuition, even a vacation all require diligent saving over time. Your budget can tell you what you’ve earned, what you’re spending, and what’s left over each month! There are several budgeting strategies to try – see which one works for you!
Saving and investing. This includes creating an emergency fund and setting aside money for both short- and long-term goals.
Protecting yourself. Knowing what insurance to have to protect yourself and your financial situation.
Borrowing money and credit. Managing debt is an important aspect of a financial picture. Understanding the different types of debt, how to control your credit score, and keeping yourself from overwhelming debt are essential.
If you’d like to test your financial literacy knowledge, take this Financial Literacy Quiz! Don’t worry if you don’t score as high as you’d like. We’re always happy to dig into any areas you’d like to learn more about
We hope you feel like your own financial literacy has improved by working with our team. If there are any areas above that you would like to take a deeper dive into, please let us know. Also, if you have friends and family that would find these resources beneficial, please don’t hesitate to send them along.
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The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite, LLC, is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.
Securities and investment advisory services offered through SagePoint Financial, Inc. (SPF), member FINRA/SIPC. SPF is separately owned and other entities and/or marketing names, products or services referenced here are independent of SPF.