Financial literacy is the ability to understand and use financial skills, such as managing your finances, budgeting, and investing. It is important to have basic financial literacy knowledge to make informed decisions about your money and achieve your financial goals. Here are a few key concepts to understand to improve your financial literacy:
Budgeting
This involves creating a plan for how you will spend and save your money. It is important to track your income and expenses to understand where your money is going and make adjustments as needed.
Saving and investing
Setting aside money for emergencies and future goals, such as retirement, is important. Investing is a way to grow your wealth over time by putting your money into assets that can increase in value.
Credit and debt
Credit is the ability to borrow money, it is important to manage credit responsibly to maintain a good credit score. This includes paying your bills on time and only borrowing what you can afford to repay.
Financial products and services
Many financial products and services are available, such as bank accounts, loans, and insurance. It is important to understand the terms and fees associated with these products and to choose the ones that best meet your financial needs.
Financial planning
Financial planning involves setting long-term financial goals and creating a plan to achieve them. This may include creating a budget, saving and investing, and managing debt.
By understanding these concepts, you can make informed decisions about your finances and work towards achieving your financial goals.
Financial literacy resources
The Money Advice Service
A government-funded organisation that provides free and impartial advice on financial matters, they offer a range of resources, including articles, videos, and interactive tools on budgeting, saving, borrowing, and protecting your finances.
The Personal Finance Society
A professional body for financial advisers in the UK, the PFS offers a range of financial literacy resources, including articles, videos, and interactive budgeting, saving, investing, and retirement planning tools.
The Financial Conduct Authority (FCA)
The UK’s Financial Conduct Authority offers a range of financial literacy resources, including articles, videos, and interactive tools on managing money, borrowing, and protecting your financial information.
The Citizens Advice Bureau
This charity provides free and impartial advice on financial and other issues. It offers a range of resources, including articles, videos, and interactive tools on budgeting, saving, borrowing, and protecting your finances.
