It is the acumen with respect to money –the aptitude that enables people to earn, spend, save and invest money to attain happiness and security for themselves and achieve a lifestyle they aspire to. As Wikipedia puts it , “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 not just a picture of the financial education of a person; it is broader in its meaning and encompasses how people live their lives, what choices they make and how they implement their desires – financially and in other ways.
Financial literacy is not just a picture of the financial education of a person; it is broader in its meaning and encompasses how people live their lives, what choices they make and how they implement their desires – financially and in other ways.
Financial freedom
Financially literate people have the financial freedom to use their money to enjoy life – spend on luxuries or donate money or help others. Their financial literacy is thus a sign of their lifestyle and life values. This could happen to people at different levels of income, not necessarily only to the rich and powerful.
The level of financial literacy determines people’s lifestyle choices – their careers, their activities, their avenues of investment, the charities they donate to, etc.
Invest and manage
Since financial literacy guides people on how to save, invest and manage their wealth, it also affects their ability to increase their income stream and grow their wealth. This in turn influences their way of living and the cycle continues.
Financial literacy is not restricted to managing your own money. Entrepreneurs and businessmen manage stakeholders’ money and use it to make profits. It helps to make people aware of how and where to deploy money so that they can lead a balanced life where finances are stable, life is morally right, and there is joy and cheer in their hearts.
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