New Year Resolution: Improving your Financial Literacy

It’s the New Year, and that means it’s time to set some goals. If you’ve been thinking about your finances, you might have come across the term “Financial Literacy” before. But what does it mean?

Financial literacy is a skill that can help you make better decisions and live a more fulfilling life. It is having a good understanding of how to manage money, from saving for retirement to paying your bills on time.

It’s also knowing how to make decisions about spending and saving based on your own needs and goals. This means you do not not have to blindly follow someone else’s advice or a one-size-fits-all solution.

So why should you care?

Financial literacy can help you better understand your finances, which means you’ll feel more confident in your ability to handle them! You’ll be able to make better decisions about things like budgeting and managing debt. This will free up more time for focusing on other important things in life.

This year, take some time to reflect on your current financial situation and then make some new year’s resolutions to improve your financial literacy. Here are some ideas to get you started:

Write down what you want out of life.

Write your dreams and aspirations. This can range from how much money you want to earn/save/spend each month, etc. Write down how much money it would take for those goals to happen and the amount of time it will take you to reach them).

Track Your Spending

It’s easy to get caught up in the excitement of spending money on things, but if you need to know exactly where your money is going, it’ll be hard to reach any of your financial goals. Make sure that every time you spend money on something, you write down how much it cost and what it was used for (so if someone asks.

Read up on the basics (and beyond).

The internet is full of great resources for learning about financial literacy. From blogs written by experts in the field to videos from people who have gone through some pretty big money problems themselves. Reading these kinds of stories can provide a solid starting point for understanding how money works and how people deal with money issues day-to-day.

Make an actual budget.

This one is a biggie, and it can be difficult to stick to if you’re not used to budgeting at all. But just make sure that you do! Sit down and figure out what money goes where on a monthly basis, then set limits for each category so that you don’t overspend in any one area.

Pay off debt!

We all have debt at some point in our lives, whether it’s from school loans or credit cards or something else entirely. But paying off that debt will give you more financial flexibility moving forward. This means less stress in day-to-day life and more free cash for vacations or other fun stuff down the line!

Make sure everyone in your family knows how to manage their money—and that includes kids!

It’s never too early for them to learn about managing their money and making good financial decisions. That way when they grow up, they’ll know what steps to take when it comes time for them to make decisions about their own finances.

Take small steps.

If you’re not used to thinking about money, it can be overwhelming to try to understand all the different aspects of personal finance. So start with one thing and then move on from there. Maybe you’ll start by learning how to set up a budget and track your spending. Or perhaps you’ll start by learning about compound interest and retirement plans. The important thing is that you focus on one thing at a time so that you don’t get overwhelmed.

Learn from others’ mistakes.

One of the best ways to learn something new is by watching other people do it first. That’s why it’s so important to talk with friends and family who have good financial habits and have successfully managed their money. Asking questions will also help clarify things in your mind when they seem confusing. I’ve found talking through things helps me figure them out more clearly than if I’m just thinking about them.

Ultimately, when it comes to your financial future, what you do with your money is largely up to you. It’s a big job, but if you take charge and take small steps every day, you can find yourself on a healthy financial path. This will be a great benefit to you and your family down the line.

Yours in Financial Independence, Temitope.

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