Financial literacy is the understanding of money. This includes understanding how checking accounts work, what a credit really is used for, and how to avoid debt - just to name a few. Financial literacy impacts the daily issues an average person makes when balancing a budget, buying a house, funding education, and income for retirement.
Lacking financial literacy is a problem across all walks of life.
Why it Matters
Financial literacy is crucial to help consumers save. This could be for retirement, for example, providing adequate income for retirement while avoiding higher levels of debt resulting in bankruptcy, foreclosures, and defaults.
It's important because it prepares us with the skills and knowledge we need to manage money wisely and effectively. Financial decisions and the actions we do or don't take need an informed foundation maximizing success.
*Nearly half of Americans don't expect to have enough money to retire, 40% of Americans can't afford a $400 emergency expense, and credit car debt has reached its highest point ever.
Having financial literacy gives you the options to improve or build your credit, purchase a home, or obtain an auto loan to purchase a car. It'll give you the chance to save money, identify where you financially slipping, and help you build a stable financial future.
Improving Your Financial Literacy has Benefits
Improving on understanding your financial literacy will have a profound impact on consumers and their ability to provide and save for his/her future. Learning how to read financially definitely isn't easy, but once mastered, it can make life easier and lift any financial burdens you might have.
Dedicating some time to research, ask for help, and identify your faults financially can turn your life around and make things better.
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