Luke Roxas

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Finance 101: Qualities to Develop to be Financially Literate

Math Kid

Aside from the knack to read and write, did you know that there’s another literacy most people are lacking? It’s called financial literacy, which is the ability to consistently make the right decisions in managing your personal finances.

In order to be financial literate, you need a set of skills and knowledge to help you make informed and effective verdicts regarding your money. Here are five qualities you need to develop in order to achieve that state of financial security.

A financially literate person is familiar with his household expenses

Keep track of how much money you have coming in, going out, and where it goes. Otherwise, you will surely make poor investments. Credit cards can be dangerous, so be sure to note how much you averagely spend on a monthly basis, them simply adjust wisely according to your spending pattern. This way, you’ll avoid, and I’m quoting “Fight Club” here, buying things you don’t need with money you don’t have to impress people you don’t like.

A financially literate person has a vision for his or her finances

It is easier to discipline yourself with your finances if you know that you’ll eventually be rewarded for it. Having a goal in mind will make you focused in money management. It can be in the form of a new car, a fruitful business, or a dream vacation with your family. Doesn’t matter really as long as the goal will give you fulfillment. So now it’s time to ask yourself: “What am I saving for?”

A financially literate person is disciplined

A person may have good track of his earnings and a clear vision for his savings, but if he doesn’t have proper discipline, financial literacy will still be out of reach. This is why you’re next step is to a budget and stick to it. Get rid of unnecessary things and highlight the essential ones. Now, construct a budget for your daily, monthly, and yearly spending. You’ll be surprised how much stress will be lifted from your shoulders once you accomplish this.

A financially literate person looks for mentors

When it comes to money management, a lot of people offer a variety of opinions. Some of them can be useful, but the majority haven’t got a clue to what they’re talking about. For the most actionable cash advice, listen to those who practice what they preach, and to those who went from rags to riches because they knew how to handle the little money that they had.

Financial literacy is something that you don’t develop in days, weeks, months, and even a year. It is a lifelong journey grounded on risks, mistakes, perseverance, and the will to succeed. Look up to great business leaders and learn from their lives. It’s time for you to take that first step on that road to security.

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