Whether you accept it or not, money plays a very vital role in your life. How you manage your money will either make or break you. You just can’t deny its importance.
People who plan and manage their finances well normally live very comfortable and less worrisome lives, but people who barely care about their finances have chaotic and troubled life.
Most problems that people face has something to do with money, whether they run short of cash or simply doesn’t earn enough. Have you experienced such dilemma? I bet you do at some point in your life.
If you analyze it closely, money problems always boil down to just two things, lack of knowledge and lack of discipline.
Knowledge is very important in managing your finances since if you don’t know what to do, you’ll definitely end up doing the wrong things. Knowledge is also the starting point of everything when straightening your finances. It even precedes the discipline issue since if you already know what you are doing, you can easily discipline and program yourself to implement a financially healthy lifestyle.
Increasing your knowledge about finances means increasing your financial IQ and making yourself financially literate. But going deeper, why is it that there is a dire need to increase your financial IQ and become more financially literate? Read on and find out.
1.) Once you become more financially literate, you can easily straighten out your finances and in the process you become more efficient in dealing with money. You can easily spot the things that should be of priority, things that you can delay, and things that you don’t need and are not worth spending upon.
2.) By becoming financially literate, you will know what kind of financial tools to use in order to achieve your goals. You’ll know when to put money in the bank, and you’ll also know when to put money in different investment tools such as stocks, mutual funds, bonds and the rest. Knowing how different financial tools work is very critical since different tools serve different purposes and fit to certain kind of goals or time horizon. If you don’t know what kind of financial tool to use, then you’re not being efficient.
3.) If you’re financially literate, you can avoid becoming scammed and you will increase your chances of success (at least financially). Scams are all over the world, and people are scammed again and again because they both lack knowledge and discipline. People want the quick buck, hence will always take the risk. Financial literacy will make you spot what’s a potential scam from a legitimate investment. If you keep yourself from being scammed, you won’t lose your money and in fact, you could even invest it into something that is much safer that will also yield potentially higher return on investment.
4.) Discipline is a by-product of knowledge, hence if you know the things that you should know, then you can easily make yourself work into it. A lot of people try to develop discipline without bothering to learn the necessary steps that improve financial planning. They then end up either nowhere or not getting what they want. Do not underestimate the power of knowledge since it can give you enormous wealth. Having the right knowledge means being financially literate, and with discipline it will help you achieve whatever you want financially.
Financial literacy is not being taught in schools, hence it is something that you should learn either out on the streets or by attending special lectures, seminars, or conventions. Strive hard to become financially literate since it is very important.