Did you know that one in three Americans has no savings at all? A large portion of the population is living paycheck to paycheck. And it’s not just because people are irresponsible with their money – there are a lot of systemic reasons why this is the case.

But regardless of the reasons, the fact remains that financial literacy is more important than ever. Without it, people find themselves struggling to make ends meet and unable to take advantage of opportunities that come their way.

Why Financial Literacy is an Issue?

One of the biggest problems with financial illiteracy is that it leads to a lot of debt. People don’t understand how credit works, so they rack up huge amounts of debt that they can’t afford to pay back. This can ruin their credit score and make it very difficult to get ahead financially.

Another reason would be financial literacy isn’t taught in schools. Students are expected to learn about math, science, English, and social studies, but there is no requirement for financial literacy education. As a result, many people graduate from high school or college without knowing the basics of personal finance.

This can lead to poor money management habits and make it difficult to make sound financial decisions later in life.

There are a lot of other reasons why financial literacy is important, including:

• Helping people save money

• Avoiding financial scams

• Making informed investment decisions

• Preparing for retirement

• Getting out of debt

• Building wealth

• And more

How Can You Become Financially Savvy?

Becoming financially savvy and taking control of your money isn’t hard as you might think. With a little bit of effort, you can learn the basics of personal finance and start making better decisions with your money.

Here are a few things you can do to get started:

1. Learn How to Budget

It is important, to begin with, a Budget. This will help you track your spending, find ways to save money, and make sure you’re not overspending. To create a Budget you will need to spend some time looking through your bank transactions and or receipts to analyze your income and expenses. It is easy to start with either pen or paper but would be better to use an Excel spreadsheet to import your activity and categorize each transaction. Otherwise, you can look for a Bookkeeper to set up Quickbooks (QBO) to be able to generate reports.

You can start by tracking your income and expenses for one month. Then, you can start finding gaps where you’re spending more money than you should. For example, you might be spending too much on eating out or buying coffee every day.

Once you have a better idea of where your money is going, you can start setting limits and creating a budget that works for you.

2. Clear Your Debts ASAP

Debt is the biggest hurdle when it comes to financial success. Unfortunately, having debt may hinder your ability to save money or invest in the future. Having too much debt can also affect your credit score making things a lot harder down the road.

Dave Ramsey emphasizes the importance of paying off debt. He uses the example of

a Gazelle running from a Lion for its survival. It would make a magnificent difference in your life by not carrying debt. You can start by making a list of all your debts and their interest rates. Then, you can focus on high-interest rates to decrease the amount of interest that will be paid to Creditors over time. 

Though there are countless ways to pay off debt. Some of the most used is the snowball method, debt avalanche method, debt refinancing, etc. Depending on your situation, you might find one method works better for you than others.

3. Create Multiple Incomes Streams

Depending on a single income stream is one of the biggest mistakes you can make. If you only have one source of income and something happens to it, you could find yourself in a difficult financial situation.

That’s why it’s important to create multiple income streams if possible. This can include things like:

• Investing in real estate

• Starting a side hustle

• Working a part-time job

• And more

Creating multiple income streams will help you diversify your earnings and protect yourself in case one of your income sources dries up.

4. Saving for the Future

There is a saying, “It’s never too late to start investing.” And it’s true, even if you’re in your 20s or 30s, it’s never too late to start investing for the future.

The sooner you start investing, the more time your money will have to grow. And the more money you have invested, the more secure your financial future will be.

If you want to make money work for you, you need to start investing as soon as possible. Whether it’s stocked, retirement plans, or real estate, find an investment that works for you and start putting your money to work.

5. Self-awareness and Patient

And lastly, one of the most important things you need for financial success is self-awareness and patience.

You need to be aware of your spending habits, your income, your debts, and your credit score. All this information will help you make better decisions with your money. It’s important not to get influenced by your friends or family when it comes to money. Just because they’re spending a lot of money doesn’t mean you have to as well.

And finally, you need to be patient. Getting out of debt or becoming financially successful takes time. You need to be diligent with your money and make smart choices day after day, month after month, and year after year.

If you’re looking for help to become financially independent, Aurei Business Innovators can help. We offer a variety of services to help you manage your finances, including budgeting, debt management, credit counseling, and more.

It’s time to take a step forward and take control of your financial future. Contact us today to learn more about our services and how we can help you achieve financial success!

Conclusion

So there you have it! Now you know the importance of financial literacy and some of the things you can do to become financially successful. Remember, it’s never too late to start taking control of your finances. It might take a while to see some results, but if you’re patient and persistent, you can achieve financial independence in no time!

Become financially savvy and take control of your finances today with our budgeting and bookkeeping services.