With new financial policies and investment options mushrooming up almost everyday, to be a financial literate has become of the utmost importance. Financial illiteracy or the inability to understand key financial concepts can leave one handicapped and in turn ruin the efforts of the government to make a financially stable economy.
The cost of financial illiteracy can be viewed from various angles; forgone savings & investment opportunities, bankruptcy or financial losses, paying higher prices than the actual worth, haywire savings plan which in turn leads to dreams that go unfulfilled, family disputes over money and much more.
According to Maureen O’Connell Scholastic, the better decisions you can make for your life. Hence, Financial Literacy becomes of paramount importance to lead a life devoid of any financial crisis’. Here are a few reasons how being a financially literate person can help you in future.
- Ability to make better choices– Banks, credit unions, brokerage firms, insurance firms, credit card companies, mortgage companies, financial planners, and other financial service companies are all vying for your assets. Being sound in financial knowledge will help you gauge the benefits better and decide for the right company.
- Increases confidence– As an informed consumer, you will make better choices confidently. You can compare various options and confidently chose the best suited for you rather than relying on others’ advice.
- Spot money scams– When you are aware about the nitty-gritty’s of money, it becomes easier for you to spot and report scams being run by credit card and insurance companies.
- Get the best value of your hard earned money- When you invest better, spend the right amount and save the rest for future, you get the real value of money. Happiness is infinite when the hard earned money is spent well.
- Better quality of life- Understanding your finances means less stress. You’ll always know where you stand financially and you have a plan in place to reach your goals. This helps you lead a stress free life and have better financial health.
- Dynamic Environment- The financial landscape is very dynamic. Now a global marketplace, there are many more participants in the market and many more factors that can influence it. The quickly changing environment created by technological advances such as electronic trading make the financial markets even swifter and more volatile.
If you follow the principle of 1% infinity where every day, you learn a little bit about managing personal finances, you’ll be well on your way to becoming money-smart says Maureen O’Connell of Scholastic. The savvier you are about money, the better financial decisions you’ll make!