Being financially secure is an important part of life. Having control over your money not only provides a much-desired peace of mind and independence, but can also pave a way for growth, expansion, and opportunity. Financial literacy refers to one’s aptitude to both understand and effectively put into place various financial tools, including personal financial management, budgeting, and investing. Financial literacy will define your relationship with money and is a lifelong learning process as monetary systems, platforms and technologies evolve and change regularly.
An overarching term, ‘financial literacy’ spans a multitude of skills. For example, a financially literate person knows that if they earn $2,000 a month in wages, they cannot spend more than $2,000 each month without going into debt.
Below are the 5 principles of financial literacy:
According to the Financial Literacy and Education Commission, there are five key factors of financial literacy, namely: Earn, Spend, Save and Invest, Borrow, and Protect.
While learning to apply financial literacy doesn’t happen overnight, there are some simple steps you can take to become aware and intentional regarding your economic situation:
- Learn about money matters (i.e. the stock market, investment funds, banking options);
- Capitalize on financial management tools;
- Ask for professional advice or find a mentor;
- Tap into your network;
- Learn to budget;
- Understand credit and your credit score (if applicable);
- Open and manage a checking and savings account;
- Understand debt and loans.
These points are not only vital for personal finances but can crossover to business. Becoming financially literate will broaden your understanding about the ebb and flow of the markets, inflation, politics, and investment. A successful business starts with solid accounting, laying the framework in which to build. The same can be said about personal finance. One is likely to reduce one’s chances of becoming successful when it comes to maintaining financial stability, without knowing how to make wise decisions about their finances, and understanding if it works for them or against them.
Understanding this common setback and importance of financial literacy, GBSB Global assures the coverage of financial basics as part of every taught program, regardless of the area of specialization. For those wanting to explore a more in-depth curriculum focused on the latest trends in the financial market, we offer specialized programs across Bachelor, Master and MBA levels, including Blockchain, FinTech and Digital Finance Management, to name a few. Choose from the many available options to best suit your individual needs.
Take the reins on your finances and put your money to work today.