COLLEGEBUDGETING

Financial Literacy and How to Improve Yours

Financial literacy has been an increasingly popular topic among adults, college students and high school students alike for decades. Conversations about money have surged since the early 2000s thanks to financial contributors like Suze Orman, David Bach, Ramit Sethi and many others. With the rise in awareness around the subject, it’s important to understand what financial literacy means.

According to Investopedia, financial literacy is the ability to understand and effectively use various financial skills, including personal financial management, budgeting and investing. This definition is broad and doesn’t mention that it’s a lifelong journey that will change depending on your stage of life. Remember that getting started is the most important step.

Getting Started

The one tip I wish someone would have shared with me regarding finances is that it takes practice. There were times I got it wrong, went over budget, and learned that a budget can change based on the season or even the month. Through trial and error, I found a rhythm and success. Understanding you will make mistakes while having wins and setbacks will make the process easier, especially when you take the time to learn from your mistakes.

Think about something you’re good at. If you think about it, you’ll see that three things helped you get there: time, practice and patience. Finances are much like that. It will take those three things to get good with finances, which is OK! If you’re ready to start or improve your financial literacy, the next step is to find the information you need to improve.

Where to Find Financial Education

1. Ask your college resource office if they have any free opportunities like online courses, one-day seminars, or local partnerships with financial institutions.
2. Inquire at local financial institutions. They will be able to share relevant and up-to-date information that may be beneficial for you.
3. Research local community organizations to find out if financial education is something they promote. Some organizations host monthly or quarterly sessions.
4. Find financial solution companies to help walk you through the process of building a budget or paying off debt.
5. Use reputable online resources or refer to trusted mentors for courses or seminars.

The most important part of using financial education is making sure that it works best with your learning style. In addition, make sure you’re not pushing too far past your knowledge base or comfort zone. The goal is to begin changing and creating habits, so if you do something too far past your current experience, it may feel more complex, which can lead to a lack of follow through or habit building. To effectively use what you learn about personal finance in your own life, it’s vital that you create habits that work for you, even if you adapt them over time.

Sources:

https://www.investopedia.com/terms/f/financial-literacy.asp