Working poverty affects as many as 169 million youth in the world. In 2013, 37.8% of employed youth aged 15‒24 in developing regions were poor, with 17.7% of them living in extreme poverty at less than US$1.25 per day.
Taking care of your finances the right way should be one of your top priorities. This action should drive how you earn, spend, save, and invest your money.
When you are poor or at risk of poverty, you will possess fewer financial resources. However, you can use financial literacy as a tool to eliminate poverty.
What is financial literacy?
Financial literacy is the action or process of acquiring knowledge and understanding of financial components and skills such as personal financial management, tax issues, budgeting, investing, and borrowing wisely.
The objective of teaching financial literacy is to help people develop a stronger understanding of basic financial concepts so that they can handle their finances better.
These skills allow people to make smart decisions with their money. It starts by building basic knowledge of money matters.
When you possess this skill, you can understand the major financial issues most people face such as financial planning, compound interest, debt management, efficient investment strategies, and money-time value.
Financial illiteracy can lead to poor financial choices which can have negative effects on your financial well-being.
Financially literate people know how to spend their money, they know where to keep their savings and investments as well as the difference between credit cards and debit cards.
The goal of financial literacy is to establish a feeling of control over your finances while also using money as a tool to freely make choices that build greater life satisfaction.
How to gain financial literacy.
Don’t let the fear of jumping into the financial world, or a sense that you are just not good with money, hinder you from improving your financial knowledge.
There are small steps, an array of tools and resources that can help you along the way and get a better understanding of how money works.
Many educators both online and offline are already working hard to bring this kind of understanding to millions of people worldwide.
To start, take advantage of free resources that are already available to you.
Check with your employer. Find out whether the company offers free financial counseling or an employee financial wellness program.
Also, you can seek out resources from well-regarded blogs, Authors, YouTube videos, nonprofits, and financial agencies online.
They can teach you the basics about finance on your own time.
If you have the means, expert help is also available. You can consider working with a certified financial planner. This can give you an insight into the areas you most need to focus on.
They can help with financial goal setting, tax planning, saving, retirement, and paying down debt.
Online financial courses in another place to go for beginners. Many who take personal finance courses experience awesome results with their money.
How to use it to fight poverty.
Gaining financial literacy is one of the most important things you can do to ensure prolonged financial stability.
Being financially literate is a skill that presents a lot of benefits that can improve your standard of living through an increase in financial stability.
Financially literate people not only manage money with more confidence, but they also have a better chance of handling the inevitable challenges of their financial lives.
Being financially literate allows an individual to be better prepared for specific financial roadblocks, which, in turn, decreases the chances of personal economic distress.
They have a good understanding of how to prevent and manage financial turbulence as they arise.
When you are financially literate, you understand how to allocate your income toward various goals simultaneously. You have the tools to thoroughly research and evaluate loans, expenses, and investment opportunities.
On the other hand, financial literacy can help young people save diligently for things that matter to them. Also, increasing financial literacy could transform whole families, communities and even the nation.
Achieving financial literacy is crucial in today’s society due to everyday facets. When you have the knowledge, this gives you a better chance to make informed decisions.
You can avoid going into debt or investing with too much risk. This will also help you create and pursue financial goals that will most support your vision for a happy life.
Even if you don’t have a lot of disposable income to help you reach all your financial goals, financial literacy will help you know how to prioritize them and make strides when you’re able to.
As a young person trying to build up yourself, it’s very important to learn the basics, from how to earn money, budget, save, invest to how to pay your bills on time.
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