Financial Literacy | Life Insurance | Tax Prep

What Is Financial Literacy?

Financial literacy is the ability to comprehend and efficiently use various financial skills, including personal financial management, planning, and investing. The definition of financial literacy is the foundation of your relationship with money, and it is a lifelong journey of learning. The earlier you start, the better off you will be because education is the key to success when it comes to money. A solid understanding of financial literacy can help support various life goals, such as saving for education or retirement, using debt responsibly, and running a business. Important features to financial literacy include knowing how to generate a budget, plan for retirement, manage debt, and track personal spending.

Financial literacy includes a wide range of topics, including:

1. Budgeting and Money Management: Understanding how to create and stick to a budget, how to save and invest money, and how to manage debt.
2. Financial Planning: Setting financial goals, developing a plan to achieve them, and understanding the impact of financial decisions on long-term goals.
3. Investing: Understanding different investment options, assessing risk, and making informed investment decisions.
4. Insurance: Understanding different types of insurance, such as life, health, and auto insurance, and knowing how to select the appropriate coverage.
5. Retirement Planning: Understanding retirement savings options, such as 401(k)s and IRAs, and planning for retirement income needs.
6. Credit and Debt Management: Understanding credit scores, managing debt, and using credit responsibly.

To be financially literate is to know how to manage your money. This means learning how to pay your bills, how to borrow and save money responsibly, and how and why to invest and plan for retirement.