The Importance of Financial Literacy

Why Do You Need Financial Literacy?

To become knowledgeable about finances, it’s crucial to sharpen your skills in financial literacy. With enhanced financial literacy skills, it becomes easier to manage money effectively. More importantly, it becomes simpler to live a lifestyle that isn’t pressured by financial constraints.

Financial Literacy Is Important for Success

People who fail to become financially literate often lack the knowledge it takes to build a foundation for success in life. There are multiple aspects to financial literacy. The core concepts learned by those who achieve success throughout tend to include investing, debt reduction/consolidation and saving.

What Does Financially Literate Mean?

When a person puts financial literacy into action, they will often:

  • Put more money toward retirement any time they get a raise at work
  • Always have three to six months’ worth of funds in a savings account that is for emergencies only
  • Continually replenish funds withdrawn from a savings account promptly
  • Compare and take advantage of promotional periods on credit cards
  • Frequently (4-12 times a year) Check and improve credit score

What Are the Best Ways to Become Financially Literate?

There are several ways for a person to expand their financial literacy. The easiest and quickest way to improve financial literacy is to go online and take advantage of free resources. Many banks and financial institutions share a plethora of financial literacy tools, most of which are accessible free of charge online through online portals or smartphone applications.

Another way to increase financial literacy is to check with your employer. Many employers make available financial wellness programs, and some will even pay employees to take part in such programs. You can always check with your employer’s HR department to see which financial literacy tools and programs are available to employees.

If you’re interested in turning to the assistance of a federal agency for help increasing financial literacy, it is highly advised to check with the Consumer Financial Protection Bureau. By visiting the agency’s website, you can download helpful guides that outline the best approaches to making life’s most important financial choices.

Does Credit Impact Financial Literacy?

Your credit score doesn’t necessarily impact financial literacy; however, your level of financial literacy will almost inevitably impact your credit score. The more knowledge you have regarding financial literacy, the easier it is to leverage that knowledge to make smart choices with money and assets. This is why financial literacy plays such a prominent role in having a good credit score and achieving success in life.

About US

Cape Coral Mortgage has been in Florida for 20 years with over 100 years of combined experience in the mortgage industry. Our team has vast experience in all phases of mortgage lending.

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