How Financial literacy can help you manage money more effectively

You may have heard of the term financial literacy, but what exactly does it mean? Financial literacy is a whole lot more than just making and spending money. It covers everything you need to know about money, from knowing how to read your paystub, to paying off debt to reduce your overall interest payments.  We’ll go over financial literacy, why it’s important, and what you can do to become more financially literate today.

What Is Financial Literacy?

The definition of financial literacy is the ability to understand and implement different financial skills such as budgeting, saving, and investing.  Financial literacy refers to the nature of your relationship with money. The more financially literate you are, the better relationship you may have with money, and the more you’re able to make smart financial decisions. When you’re knowledgeable about saving, spending, and building a solid financial future for yourself, you may have more confidence and overall better financial well-being.

Why Is Financial Literacy Important?

There’s a lot more to making money than just earning and spending. Deciding what you do with the money you earn can either set you up for financial success or financial ruin. If you’re more financially literate, you may be taking advantage of things like retirement accounts or savings accounts to cover unforeseen expenses. Financial literacy and education enable you to make and stick to a solid budget, save for retirement, and repay or avoid debt.

How Can I Become More Financially Literate?

Listen to Financial Podcasts

One great way to increase your financial education is to listen to personal finance podcasts. You’ll get to hear from experts about topics like how to build a budget, what to look for when choosing a retirement account, and basics about investing.

Build Strong Credit

Your credit score works as an indicator of whether you’re a trustworthy person to lend money to.  If you have a good credit score, creditors will be more likely to trust you with money and possibly lower interest rates.  If your credit score is low, you may not be eligible for credit at all. Try techniques for boosting your credit score, such as reporting rent payments to credit bureaus and getting collections accounts removed from your credit report. This will help rid your score of negative information while filling it with more positive information about your creditworthiness.

Use Credit Monitoring Services

In addition to keeping an eye on your credit score and bank account to monitor for fraud, you may want to employ credit monitoring services. These can help protect your information by actively watching for signs of identity theft and immediately alerting you to potential fraud.

Check out School of ACE Blogs

ACE has a collection of blogs on personal finance that can help you increase your financial education and improve financial literacy. Visit the School of ACE blog to learn more about the best ways to use mobile banking. The School of ACE Blog has plenty of resources on every personal finance topic you can think of to help you become financially literate.