What Is Financial Literacy 101, Exactly?

What Is Financial Literacy 101, Exactly

Do you ever wish you could press pause on life simply, so you’d finally have time to catch up on all the reading and watching you’d like to do? There’s plenty of content available in the world about every imaginable subject under the sun—but it often feels like there simply aren’t enough hours in the day to consume it all.

One subject that many consumers would like to know more about is money—beyond the basics of how to make it, that is. It’s an important presence in all of our lives, but it can be very difficult to keep up on learning about personal finance given the speed life seems to move for most of us.

Instead of getting stressed out by how much you have yet to know about money, break this broad subject into categories. Start with Financial Literacy 101: How to keep learning about money in your daily existence and convert your knowledge into positive action.

 What Is Financial Literacy?

Financial literacy is essentially the knowledge and skills that allow consumers to make educated decisions about personal finance. As you can imagine, someone with a higher level of literacy in this arena is more likely to make beneficial decisions about their finances; someone without fundamental financial literacy may not have the know-how to make wise decisions—and thus may suffer consequences like falling into debt or under-saving.

There are many different levels of financial literacy, as it’s really a never-ending journey rather than a destination. According to Investopedia, however, these are the basic steps to achieving it:

  • Learning the skills to create a budget.
  • Gaining the ability to track spending.
  • Learning techniques to pay off debt.
  • Effectively planning for retirement.

Within these broader objectives are plenty of sub-categories to explore, meaning no one is ever really finished learning about money, as everyone can benefit from a better understanding of how to effectively spend and save.

 Practical Tips for Becoming More Financially Literate

 Practical Tips for Becoming More Financial Literacy

The good news is that you can start from anywhere—and you can customize your journey toward bolstering your understanding of personal finance. Here are a few practical tips.

Find media that piques your interest. Everyone learns differently. Visual learners might enjoy YouTube tutorials, while auditory learners prefer podcasts. Others will want to read articles. Some people learn best from hands-on demonstrations. Instead of struggling through a medium that’s inaccessible or boring to you, find one that makes learning interesting.

 Follow industry leaders relevant to your journey. Industry leaders often post relevant links and offer advice of their own, making them a great source of information. For the best results, choose those relevant to your journey. Someone trying to learn more about debt relief might want to see what someone like Andrew Housser, an entrepreneur and co-founder of a leading debt settlement organization, has to say on the subject. Someone seeking more general advice could use Twitter to keep up on timely recommendations and digestible pieces of advice from these Market Watch-recommended accounts. It ultimately depends on what you want to know.

 Ask your friends and family for suggestions. Never underestimate the power of your current network. Sometimes simply taking the plunge and opening up the lines of communication can help you learn in a social setting. If you feel comfortable doing so, ask your family members and friends how they learned about a given subject, or if they have any sources for more detailed information.

So, welcome to Financial Literacy 101. Here you can learn about everything from savvy saving to debt elimination at your own pace. See, it’s not scary at all; it’s actually quite empowering.

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