8 Simple Ways You Can Become Financially Literate On Your Own
8 Simple Ways You Can Become Financially Literate On Your Own
If you have read any finance articles or news that relates to money, you probably have come across being financially literate or “financial literacy.” These terms apply to how well you understand your finances and how educated you are in everyday financial decisions.
Unfortunately, the financial education results in America are really not that great.
“Only 28% of Americans are considered “financially healthy,” according to a CFSI survey of more than 5,000 Americans. While not a large sample size, there are tons of other statistics about low savings, high debt, etc. out there. Yet, you don’t have to be in those categories.
Below, we’ll explore everything about financial literacy and how you can become financially literate on your own.
What is Basic Financial Literacy?
Being financially literate or “having financial literacy” is not difficult to define. These terms simply mean you have a basic understanding finances and the value of money. Understanding financial basics thus allows you and others to make smarter money choices and are able to be self-sufficient in financial decisions.
The best way to define financial literacy is:
You are able to understand financial issues everybody deals with like saving money, paying bills, debt management, investing, etc.
Knowing and memorizing some finance terms is great, but it’s applying that terminology effectively that create financial stability in your life.
Financial Literacy Statistics
Now that we have a complete definition of financial literacy, it makes sense to put some stats behind it. There are tons of personal finance stats, but I’m going to keep it pretty simple here. Below are a few that I found interesting as it relates to financial literacy.
Two-thirds of American adults can’t pass a basic financial literacy test. (Fortune)
44% of Americans don’t have enough cash to cover a $400 emergency (Forbes)
The majority of US adults (61%) have had credit card debt in the past 12 months and nearly two in five (38%) carry such debt from month-to-month. (NFCC)
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