Mandell (2009) defines financial literacy as 'the ability to use knowledge and skills to manage one's financial resources effectively for lifetime financial security.' Huston (2010) explains that financial literacy is made up of two elements: understanding and use. Financial Literacy Teacher Guide Table of Contents. Mac OS X 10.6 or higher Chrome OS Monitor A Color Monitor with minimum resoluon of 1024 x 768 is required. Sound Capability The sound is oponal and may be turned off by clicking on the Audio Icon located in Program Ulies.
Here's What Financial Literacy Means and Why it's Important
'Financial literacy' has become quite the buzzword, but what does it actually mean?
In short,financial literacy means knowing how to manage money wisely. Managing your finances is a lifelong journey and the specifics can vary from person to person. That said, there are a number of basic skills that can boost anyone's financial literacy. We also recommend that you check out these hotmoney saving tipsto use daily!
Financial literacy is important because life is full of twists and turns.
Emergencies and unexpected expenses will come up. Fun opportunities that you won't want to miss will present themselves to you. As you get older, the things you want will very likely be more expensive and bigger investments (for example, buying a house, having children, etc.). And eventually, one day, you will want to retire and stop working to earn a living.
All of these things take planning, which is where financial literacy comes in. The better your financial literacy, the more money in your pocket—which means overall greater security in life.
So without further ado, let's take a look at some of the simple but powerful ways you can start improving your financial literacy!
Our Favorite Ways to Improve Your Financial Literacy
1. Know Yourself
Free casino games for iphone. In order to change or improve your financial situation, you'll have to have a strong sense of what your financial situation looks like.
The first thing to do is get really familiar with your spending habits. Especially in the age of debit cards and Venmo, most of us spend our money without actually realizing how much we're spending and what we're spending it on. Use your banking apps or print out your bank statement and go through it with multi-colored pens. How much are you spending a month on eating out? What about on gas or transportation? Once you know how much you're currently spending, you can begin assessing what needs to be adjusted. You may be really surprised about what you can trim!
The second thing you need to do (and this can be scary) is check your credit score. Your credit score is assigned to you based on your financial history and your relationship to paying off debts. A good credit score is necessary for a lot of things in life: getting a loan, buying a car, renting an apartment, and so on. Your credit report will also include bill payments you've made, outstanding balances in your name, your debt-to-income ratio, etc. Knowing your credit score is crucial for knowing what kinds of financial options you currently have (e.g. if you qualify for a loan) and for knowing where you can improve your financial patterns.
This is a solidoverview of credit scores as well as a tutorial onhow to check and monitor your credit scoreso that you best manage your public financial records. Several credit reporting agencies or your own bank will allow you to check your score for free! Just make sure to do your research so that you aren't being charged or negatively affected for checking your score.
2. Budget
If you want to be savvy with money you absolutely must, must, must (did we say must?) make a budget. What exactly IS a budget? A budget is an estimated amount of income and expenses for a given amount of time. So, for example, a monthly budget is an organized list of all incoming and outgoing money for the duration of that month.
3 Keys to budgeting:
Identify fixed and variable expenses
Fixed expenses are monthly expenses that stay the same every month: rent, your car payment, most bills, your student loan payment, etc. (Side note: you could be eligible forstudent loan forgiveness—read on!)
Variable expenses are monthly expenses that will fluctuate. For example, groceries, household supplies, gas, etc.
Track your spending for 3 months
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Since so many expenses in life are variable, it's important to study your spending habits over a longer period of time, ideally for about 3 months (you can also look back over 3 or more months of bank statements). Over this time, determine the average amount you spend per month on variable expenses, rounding up to account for months that may be a tad bit higher.
Once you've determined an amount for your average variable expenses, add this number to your fixed expenses and voila! You have your total monthly expenses.
Determine your income
If you've got a fixed income, this part is easy-peasy. If you don't (for example, if you're an independent contractor who picks up various gigs or if you work on primarily tips), you'll want to do the same thing you did for variable expenses and track your income over a period of time to determine an average. When in doubt, to play it safe, you can always round your average monthly income number down, and anything above that number is a surplus.
Set your budget
Once you have both your expenses and your income determined, you can subtract your expenses from your income. With the number you have left, deduct a portion to set aside in savings (more on this in just a moment).
The amount of money you have after you deduct your expenses should then be divided into 4, which will give you your weekly budget. You can even go on to divide that number by 7 if you'd like, determining your daily budget.
3. Save
Always set aside a portion of your income to contribute to your savings account (which you need), even if it's a small portion that varies month to month. Having money to fall back on in case of emergencies is critical. How much you put away also depends on your goals, and studies vary onhow much you should put into savings a month, but the general rule of thumb is 20% of your income.
If you can't swing 20%, just make sure to put something away, aiming for 20% whenever possible.
Here's a great resource on thedifferent types of savings accounts so you can choose which is best for you! When putting your money into savings, it's best to shop around and weigh out your options, which involvesunderstanding interest rates and how they're applied to the money in your account. The higher the interest, the more money you'll earn over time.
4. Establish Credit (But Beware of Racking it Up!)
Your credit score is generated, in large part, by your ability to pay your bills and to pay back debt on time. If you don't have any bills or any debt, it will actually be hard to establish good credit. Therefore, it can be a good idea to establish credit by taking out a line of credit on a card and then paying it back responsibly.
A credit line, in essence, is like a loan given to you up front (in the form of a credit card) that you'll need to pay back, usually at a minimum monthly fee. This is a fantastic overview ofhow to use a credit card to build credit.
If you keep your balance low and make your payment on time every month, your credit score will thrive. But if you let your balance accrue too high, or make late payments, your credit is at great risk. And remember, there's almost always an interest rate attached to your credit line, meaning that you're paying back additional money on top of what you actually owe in exchange for the advance on the money. However, you can avoid the interest by making sure you pay off your credit start statement by the due date each month!
So remember, having a credit line can be a great thing, but proceed with caution!
5. Protect Yourself
In the digital age, where most of our banking is done online, it's imperative to protect yourself against bank account hacking andidentity theft. This is a to-the-point but highly comprehensive overview ofhow to prevent identity theft, but here are some of the quickest, easiest ways you can safeguard your money from illegal access to it:
- Update your passwords frequently and follow all password parameters on sites (the more complicated the password the harder it is to hack your account).
- NEVER provide personal information like your bank account number or social security number online or over the phone unless you are CERTAIN you are dealing with a trusted source. When in doubt, don't do it!
- Be very mindful of what you click on on the internet. Pop-up ads are a huge no-no.
- Check your credit frequently.
- Set up fraud alerts or account freezes with credit bureaus (more on that here).
- Subscribe to anidentity theft protection service.
6. Seek Advice
If you're feeling overwhelmed about money, seek out the wisdom of those who have more developed financial literacy than you do right now. A trusted family member is a great place to start. Or, you can speak with afinancial advisor, whose job it is to help you manage your money safely. This is a great overview ofhow a financial advisor can help and how you can find the right one for you.
7. Self Educate
Play pompeii slot machine online free. If you're pretty good with money, but would love some additional insight or inspiration for how to save bigger and invest better, there are plenty of 'financial gurus' out there.
There are some pretty universally trustedfinancial experts, includingSuze Orman, who has many books and other resources for helping people get out and stay out of debt. Her website also very neatly breaks down money management into various, streamlined categories, so you can find information that pertains to you quickly.
8. Set Goals
It's always easier to accomplish something when you have a set goal or destination in mind! Whether you're saving up for your dream vacation, looking to pay off your student loans entirely, planning to buy a home, etc., you'll be much more inclined to manage your money better if you know what you plan to do with it. Here's a resource we like onhow to set financial goals, with some common great ideas for financial goals to get you motivated!
9. Do a Daily Check-In
Coming somewhat full-circle to #1 (knowing yourself), it's a really good idea to stay on top of your finances by taking a peek at them every day. You don't need more than 5 minutes to check all accounts so that you're exactly aware of how much money you have and what you've spend money on most recently.
It's all too easy to get busy, swipe away on that debit card as you rack up purchases, and then look at your account in shock. If you start your day by taking a quick inventory of your finances, you're much more likely to spend responsibly!
10. Be Smart About Student Loans
Last but not least, our personal favorite tip for improving your financial literacy: managing your student loan debt! One of the best ways to do so is the avoid or reduce student loan debt by winning scholarships (money you don't have to pay back) for college tuition and other expenses!
Check out our trusted guide onhow to build a scholarship toolbox in order to save BIG on college tuition. You can also check out all of ourscholarship and student debt payoff opportunities, which we update frequently!
Want to Make College Even More Affordable?
Check out Scholly Search, our adaptive, hyper-personalized scholarship-matching database that helps you find the MOST money for school possible. Here's a great overview ofScholly Search's new features that make scholarship searching even quicker and easier!
Financial Literacy Month is a celebration and a challenge. It's a chance to reflect on the state of our personal finances and an opportunity to improve those finances, one step at a time. The 30 steps of Financial Literacy Month are designed to help you identify your money weaknesses and turn them into strengths.
If you want more from your money, take the pledge and commit to completing these 30 steps in the next 30 days.
April is officially Financial Literacy Month, but you can pledge to take these 30 steps any time you're ready!
Step 1: Commit to Change
The first and most important step in developing and following a financial plan is to examine your attitudes about money. Are you ready to accept responsibility for changing your financial situation? Do you believe that you can and will change the way you make financial decisions? Can you identify at least one benefit you hope to gain by changing your money management behavior?
Read more: Member of the President's Council for Financial Literacy Talks about Commitment
Step 2: Assess Your Finances
How are you doing financially? What are your strengths? What are your areas of improvement? This is a great opportunity to be honest about your relationship with money. Write down your feelings and findings.
Read more: Gerri Detweiler Discusses the Importance of Assessing Your Financial Situation
Step 3: Clearing Out the financial clutter
You may be anxious to get started, but it is hard to get motivated when you are knee-deep in paperwork. Getting your financial house organized is a great way to begin on your path toward financial wellness. But before you bulldoze that pile, you should know that some things are worth hanging on to. The key is to know what keep and what to toss.
Read more: What to Keep and What to Toss
Read more: Karen McCall Talks about Clearing out the Clutter
Step 4: Set yourself up for success
While all members should be aware of the family's overall financial situation, choosing one person to conduct the day-to-day financial tasks is a good way to stay on top of things. The appointed individual should be organized and a good communicator. They should be given uninterrupted time to do their tasks effectively.
Read more: How to Organize Your Personal Household Finances
Read more: Time Management Expert Teaches You How to Set Yourself Up for Success
Step 5: Get copies of your credit reports
Your credit reports can provide a snapshot of your overall financial situation. Reviewing your credit reports for accuracy can also help you to identify errors or fraudulent activity. Fortunately, it is easier than ever to obtain copies of your reports.The FACT Act gives every consumer the right to a free credit report every year from each of the three major credit bureaus: Equifax, Experian and TransUnion. To get your free report, simply visit annualcreditreport.com.
Need help understanding your credit report? MMI offers one-on-one credit report reviews. Learn more today.
Read more: Adam Levin on the Importance of Financial Literacy
Step 6: Clean up your credit report
If you find an error on your credit reports, you'll need to know your rights. Your most effective weapon in dealing with the credit bureaus is the Fair Credit Reporting Act (FCRA). Legally, the FCRA protects you by requiring credit bureaus to furnish correct and complete information to companies requesting credit histories for evaluation.
Read more: How to Locate and Correct Errors on Your Credit Report
Read more: Andy Jolls on How to Clean Up Your Credit Report
Step 7: Make your money count
To develop an accurate picture of the amount of money you will have in the future, take a look back. Decide if your income will be from the same or from different sources and the amount of income you can expect to earn in the future.
Read more: Jim from Bargaineering on How to Make Your Money Count
Step 8: Identify your starting point
Calculating your net worth is as simple as comparing what you owe (liabilities) and what you own (assets).
Read more: How to Create a Personal Balance Sheet and Determine Your Net Worth
Read more: Multitasking Mommy on Calculating Your Net Worth
Step 9: Review Your Debt situation
Freedom from debt is an achievable goal for every family. The first step in regaining control is to take an honest look at your existing obligations.
Read more: PT Money Gives You 5 Great Reasons to Have Less Debt
Step 10: Set your priorities
Creating a list of needs and wants can help you establish your financial priorities.
Read more: Personal Marketer Discusses How to Set Financial Priorities.. & Remember Them!
Step 11: Set SMART financial goals
Before you think about setting goals, review the five parts of SMART goals.
S | A smart goal is specific. It pinpoints something you want to change to achieve.
M | A smart goal is measurable. You can measure or count a SMART goal.
A | A smart goal is achievable. Setting goals too high can lead to frustration.
R | A smart goal is rewarding. Reaching the goal should be a reward for your hard work.
T | A smart goal is trackable. Set milestones and schedules for your goals.
Read more: Grant Baldwin on setting SMART goals
Step 12: Set short-, mid-, and long-term goals
Personal financial goals will differ in the length of time needed to achieve them. Short-term goals are priorities that can be accomplished within two years. Be sure every goal has a specific purpose, a dollar amount that it will cost, and a realistic target date.
Mid-term goals are priorities that can be accomplished within two to five years. Make sure your goals are realistic and flexible. If you set your goals too high, frustration will keep you from reaching them.
Long-term financial goals are priorities that may take more than five years to accomplish. Most long-term goals require regular savings.
Read more: Wise Bread Blogger Linsey Knerl on Goal Setting
Step 13: Pay down your debt
There are two popular methods that people use to tackle debt.
The first is to concentrate on paying off the debt with the smallest balance first (never forgetting to make required payments to all debts, of course). After that balance is repaid, you can then apply that payment to the card with the next smallest balance and continue the process until all debts are satisfied. This method can be very rewarding because you see progress quickly.
The second popular method is to first concentrate on repaying the debt with the highest interest rate. This method will save you the most in interest charges over time. Regardless of the method you choose, be patient and persistent.
Read more: Snowball vs. Avalanche: What's the Best Way to Pay Off Your Debt?
Read more: How to Pay Off a Lot of Debt in a Hurry
Step 14: Expect the unexpected
Unfortunately, bad things sometimes happen to good people. In fact, bankruptcy filers often site an 'unforeseen' event as the cause of their financial demise.In addition to long-term savings, financial experts agree that consumers should aim to have three to six months living expenses saved for emergencies. By learning to expect the unexpected, you can keep a minor financial setback from turning into a major financial crisis.
Read more: Financial Planning Specialist on Creating a Safety Net
Step 15: Secure your financial future
Don't despair if you are behind on your retirement goals. If it is any consolation, you aren't alone; studies show many households are not adequately prepared for retirement.
Read more: Pinyo from Moolanomy talks about securing your financial future
Read more: Retirement Investment Strategies
Step 16: Make a commitment
One trick to keeping your financial goals is to remind yourself of your goals on a regular basis. At the very least, you should document your high priority goals and post them where you will see them every day.
Read more: SimplyForties Covers Commitment
Step 17: Save for your goals
Most likely, reaching your financial goals will require you to commit to saving. That is one reason saving is an essential part of any money management plan. Set money aside each month to save for your short-, mid-, and long-term goals. If you are having trouble establishing a nest-egg, don't despair.
Read more: Simple Steps to Big Savings
Read more: Green Panda on How to Save Automatically and Minimize Fuss
Step 18: Follow Where the Money Goes
For most people, financial health doesn't depend on how much they earn, but how much they spend. To help you find out where your money is going, the next three steps involve tracking expenses.
Read more: Frugal Homemaker on Where the Money Goes
Step 19: Identify and document fixed monthly expenses
Fixed expenses are those that do not vary from month to month. Examples of fixed expenses include car payments and mortgage or rent payments. Fixed expenses are the most difficult to manipulate.
Read more: Money Coach on the Proper Way to Handle Your Finances
Step 20: Identify and plan for periodics
You may have a good idea of where the money is going on a day-to-day basis, but before you start working on a spending plan or budget, it is important to call attention to the top budget breaker: periodic expenses.Periodic expenses are those that are not paid on a regular monthly basis. For example, both holiday and tax debts are periodic, meaning they are not part of regular monthly expenditures. In that regard, they join the ranks of other expenses such as auto registrations and vacations.
Read more: Mastering Your Periodic Expenses
Read more: Wide Open Wallet on Planning for Periodics
Step 21: Document your spending
It's time to record all of your expenses - fixed, periodic, and variable - on this handy worksheet and see where your income and expenses meet (or possibly fail to meet).
Read more: Doctor, Educator, & Author on Discipline & Dedication
Step 22: Identify ways to reduce spending
To create a balanced budget or increase savings, most people will have to find a way to earn more or spend less. If the idea of spending less sounds challenging, try starting small. In addition to making small changes, resolve to boost your savings by including all of your 'windfall' money. This 'free money' includes increased income from a pay increase, birthday gifts, insurance settlements, escrow overages, tax refunds, and inheritances.
Read more: Bargain Babe on 13 Ways to Reduce Spending
Read more: A Quick Guide to Step Down Spending
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Step 23: Save money on groceries
Saving money on groceries doesn't have to be hard work. Making just some small changes can net big rewards to your pocketbook. Simple changes in the way you plan and shop can help you reduce the amount you're spending on groceries.
Read more: Ultimate Guide to Reducing Your Grocery Bills
It's time to record all of your expenses - fixed, periodic, and variable - on this handy worksheet and see where your income and expenses meet (or possibly fail to meet).
Read more: Doctor, Educator, & Author on Discipline & Dedication
Step 22: Identify ways to reduce spending
To create a balanced budget or increase savings, most people will have to find a way to earn more or spend less. If the idea of spending less sounds challenging, try starting small. In addition to making small changes, resolve to boost your savings by including all of your 'windfall' money. This 'free money' includes increased income from a pay increase, birthday gifts, insurance settlements, escrow overages, tax refunds, and inheritances.
Read more: Bargain Babe on 13 Ways to Reduce Spending
Read more: A Quick Guide to Step Down Spending
Financial Literacy Mac Os 11
Step 23: Save money on groceries
Saving money on groceries doesn't have to be hard work. Making just some small changes can net big rewards to your pocketbook. Simple changes in the way you plan and shop can help you reduce the amount you're spending on groceries.
Read more: Ultimate Guide to Reducing Your Grocery Bills
Step 24: Share a tip for change
When you identify ways to reduce spending, you are being honest with yourself about your finances. Being honest with yourself and others about your finances will ensure your success.
Read more: Tips for Change eBook
Step 25: Document your desired spending
Now that you have identified some areas where you would like to make some changes, it is time to revisit your budget. Remember, this is not about sacrifice; it is about making choices to help you achieve your goals. After you have made adjustments, you can move forward using this spending plan as a road map for achieving your goals.
Read more: Lynnae of BeingFrugal.net on Documenting Your Desired Spending
Step 26: Protect yourself by performing financial check-ups
Being in charge of the family's finances is an awesome responsibility. In addition to providing your family with the basic necessities of life, you may feel responsible for their overall financial well-being. One of the best ways to care for your family is to be sure that you are prepared if something were to happen to you or another member of your family.
Read more: Give Yourself a Financial Self-Exam
Read more: The Debt Advisor on Protecting Your Financial Future
Step 27: Understand the cost of credit
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It is important to carefully weigh your options before making a credit decision. When you sign or cosign an application for credit, you are agreeing to all its terms. Moving forward, commit to understand everything to which you are agreeing.
Read more: How to Evaluate Credit Card Offers
Read more: Counting the Cost of Credit
Step 28: Assemble a financial team
Managing your finances can be like putting together a puzzle; all the pieces need to fit in order to be rewarded with the 'big picture.' Working with one or more of these financial professionals can help put the pieces in place.
Read more: The Weakonomist on Assembling a Financial Team
Step 29: Appreciate the benefits
Change may be hard, but the payoff can be priceless. In addition to improving your financial situation, you may also find your money management skills can benefit other aspects of your life.
Read more: Finally Frugal on Tools for Success
Step 30: Keep Moving Forward
Congratulations! You have given a great deal of thought to your financial situation, your spending habits, and the change process. You now have the knowledge necessary to make positive decisions that will ensure a successful financial future.
Read more: Dr. Robert Duvall on Moving Forward
