Financial literacy is the
ability to understand how money works in the world: how someone manages to earn
or make it, how that person manages it, how he/she invests it (turn it into
more) and how that person donates it to help others.
Financial literacy
From Wikipedia, the
free encyclopedia
Financial literacy is the ability to understand how money works in the world:
how someone manages to earn or make it, how that person manages it, how he/she
invests it (turn it into more) and how that person donates it to help others.[1]
More specifically, it refers to the set of skills and knowledge that allows an
individual to make informed and effective decisions with all of their financial
resources.
Financial Literacy is the ability to understand and analyze your finances
and your financial opportunities.
In Nigeria, the Bankers’ Committee
designated March 13 as Financial Literacy Day. The day is being marked to focus
attention on children and youth in primary and secondary schools nationwide and
to empower them by enhancing their financial knowledge and planning skills. -
See more at: http://www.vanguardngr.com/2014/03/financial-literacy-crucial-nigerias-economic-growth/#sthash.tZqy4cQO.dpuf
The meaning of financial literacy and its importance
Author: Christiana MbazigweCategory: Financial Insights
Financial literacy is the ability to
understand how money works: how someone makes, manages and invests it, and also
expends it (especially when one donates to charity) to help others.
In-depth knowledge of financial
literacy is required to understand how money works and how it can work for you
– even when you’re sleeping – by investing in profitable areas like the stock
or money market. To understand money and how it works, it’s important to
understand common financial literacy principles such as; financial goals,
budgeting, investments, superannuation, contracts and employment models.
Research studies across countries on
financial literacy have shown that most individuals (including entrepreneurs)
don’t understand the concept of compound interest and some consumers don’t
actively seek out financial information before making financial decisions. Most
financial consumers lack the ability to choose and manage a credit card
efficiently, and lack of financial literacy education is responsible for lack
of money management skills and financial planning for business and retirement.
Most potential retirees lack
information about saving and investing for retirement. Many people fail to plan
ahead and they take on financial risks without realizing it. Problems of debt
are severe for a large proportion of the population because of financial
illiteracy. Youth on average are less financially capable than their elders.
Financial education can benefit
consumers of all ages and income levels. For young adults just beginning their
working lives, it can provide basic tools for budgeting and saving so that
expenses and debt can be kept controlled. Financial education can help families
acquire the discipline to save for their own home and/or for their children’s
education. It can help older workers ensure that they have enough savings for a
comfortable retirement by providing them with the information and skills to make
wise investment choices with their individual pension and savings plans.
Financial education can help low-income people make the most of what they are
able to save and help them avoid the high cost charged for financial
transactions by non-financial institutions.
Your level of financial literacy
affects your quality of life significantly. It affects your ability to provide
for yourself and family, your attitude to money and investment, as well as your
contribution to your community. Financial literacy enables people to understand
what is needed to achieve a lifestyle that is financially balanced,
sustainable, ethical and responsible. It also helps entrepreneurs leverage
other people’s money for business to generate sales and profits.
By Christiana Mbazigwe, Duric
Business Solutions, Toronto, ON, CYBF mentor
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