What is financial literacy?
To be financially literate is to understand the skills and ideas relating to personal money management. This ranges from budgeting and investing to concepts such as tax and mortgages.
The benefits of financial literacy
There are several benefits of financial literacy.
Firstly, those who are financially educated are more likely to have a positive relationship with money. This is because they are more conscious of the dangers of overspending and the benefits of saving.
You’ll be more aware of ways to improve your financial health, too. This might be maintaining payments on a credit card as a method to boost your credit score or utilising high-interest savings accounts like ISAs to get a good return on your earnings.
Being financially literate will also help you to understand and take advantage of supportive products on offer for significant investments. Examples include buy now, pay later schemes to help you purchase essential big-ticket items and mortgages which are often essential to buying a home.
Lastly, you’re less vulnerable to attack when you’re financially educated. Incredibly, the UK lost £1.2 billion to fraud in 2022, demonstrating that many fall victim to monetary scams and illegal schemes such as wire fraud.
Ways to improve your financial literacy
Browse trusted websites
There are many fantastic resources online. Total novices and those well-versed in money matters will find useful information when they browse trusted websites.
National banks post blogs to help customers understand their services, and this is a great place to start if you’re a beginner with banking or struggling to get a grip on your finances. Those confident in their abilities can learn a lot about advanced concepts such as investment on dedicated financial websites.
Read books and articles
Getting lost online or unsure which sources are reliable? Read books and articles written by verified experts to gain insight into how to approach your personal finances.
Look out for money-related columns in the national newspapers and leading global magazines such as the Financial Times when you visit your local supermarket. Your nearest bookshop or local library will stock popular finance books with staff on hand to help you find what you need.
Listen to relevant podcasts
Don’t like reading? The rise of audiobooks and podcasts means that it’s easy to educate yourself aurally as well. You can listen to experts and the general population discuss money management, covering everything from the basics to real-life examples of pitfalls and how to avoid them.
The best thing about utilising aural resources is that you can access them at any time, whether you’re wandering the shops, in the gym, or on the daily commute.
